Economic consequences of globalisation: the Australian framework for reforms

This paper reviews various elements of the Australian experience of globalisation and its consequences. Australia’s experience has many positive elements, but involves challenges, and both are valuable to share in the context of the current debate about the value of international economic integration. The approach adopted in this paper is to review existing studies, rather than conduct new research. Existing work on relevant topics is synthesised and policy implications are identified. The focus of this paper is the period since the 1970s, where a significant shift out of an era of protection begins with a policy of significant tariff cuts in 1973. Section 2 outlines some of the drivers that led to this policy shift. Section 3 provides more detail on the movement across borders of goods, services, capital, and people. The evolution of Australian policy in these areas is reviewed. The broader context of microeconomic and macroeconomic reform is outlined there too. Some of this material can be put into context by reference to a much longer time period, and in other cases only more recent data are available, or even a snapshot, depending on the scope of existing studies. Section 4 identifies some of the consequences of these changes in terms of structural change (including labour market adjustment), productivity, and incomes. The final part of the paper, Section 5, reviews some of the policy lessons and identifies elements of the future reform agenda.