Australian Politics and Policy - Senior, 2019a

Australian Politics and Policy
procedures that influence behaviour through what is considered by a given society
to be ‘appropriate’. 8 Hall and Soskice 9 differentiate between two main types of
capitalism: liberal market economies and co-ordinated market economies. In
liberal market economies, such as Australia, Canada, the USA, the UK and New
Zealand, firms tend to operate at arm’s length from other firms and governments,
and interact through competition and formal contracting. In many ways, the
‘invisible hand’ of the market is left to guide the equilibrium of supply and demand
of goods and services. 10 In co-ordinated market economies, such as Germany,
Japan and Sweden, on the other hand, firms tend to be more collaborative in their
relationships, and interactions with other firms and governments tend to be more
strategic in attaining equilibrium in supply and demand.
While the macro level is useful in understanding comparative differences
between countries in general, it is inherently weak in analysing what occurs at the
meso or industry level, where practices within both liberal and co-ordinated market
economies tend to be more diverse. For example, Australia’s market economy is
relatively young, in comparison to the market economy of the USA, with many
Australian industries either entirely owned by governments (such as the postal,
telecommunications and energy industries) or heavily subsidised by governments
(such as the agricultural, mining, textiles and automotive manufacturing industries)
until market reforms were introduced in the 1970s and 1980s in line with
international trends. Further, Australia’s health and education sectors, although
increasingly subject to competitive pressures, remain predominantly governmentowned
or controlled, underpinned by social expectations that governments will
continue to provide or fund these services. If we take the two extremes at either end
of the varieties of capitalism spectrum – the competitive market economy of the
USA on the right and Sweden’s co-ordinated market economy on the left – Australia
tends to fit somewhere in the middle, with competition occurring in some sectors
of the economy and greater co-ordination occurring in others. 11
The micro or firm level of analysis is typically adopted to examine the behaviour
of firms in the political economy, such as participation by firms in business
associations, strategic choices by firms in different policy environments, or to assess
the extent of political activism by firms. 12
While the scholarly study of government–business relations in the Australian
context has been largely situated as a sub-field of policy studies, it is inherently
multidisciplinary. 13 The different levels of analysis place greater emphasis on
different aspects of the government–business relationship, encompassing international
political economy at the macro level, policy studies at the meso level and
8 March and Olsen 1989; Peters 2005, 30.
9 Hall and Soskice 2001, 8.
10 Smith 2003 [1776].
11 Chaudhri, Samson and Kerin 2000, 21.
12 Arnold and Hussinger 2004; Bell and Warhurst 1993; Sen and te Velde 2008.
13 Bell and Wanna 1992, 5; Wanna 2003, 420.
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