Friday, 31 July 2015

29th isn't good enough

This tweet from the World Economic Forum just caught my eye...

...and, as you do, you wonder where New Zealand is. The WEF's article on the countries with the best infrastructure has a link to its Global Competitiveness Report site and the associated competitiveness database, which you can play around with. Here's our ranking on infrastructure: a global 29th.

Not so good. If you unpick the details behind the infrastructure rating, you'll find it's largely down to relatively poor roads (a global 35th) and rail (a global 39th): on the other hand our ports (11th) and air transport (14th) are pretty good, and electricity and telecoms okay though not great (24th).

So there you have it: we're aiming for the productivity and income levels of a UK or a Germany, and we're trying to do it with the infrastructure of a Malaysia or a Saudi Arabia.

Ain't gonna happen.


  1. Michael Reddell1 August 2015 at 13:41

    But which way does the causation run? Perhaps countries that are rich and highly productive spend more on better infrastructure (as they do on R&D) but with no necessary reason to think that it is the infrastructure that gets them rich and productive. Surely we need to ask what makes investing in businesses that generate a highly productive economy, and all the things that go with it, not that attractive.

  2. Michael Reddell1 August 2015 at 13:45

    (not that it is necessarily causative either but) I was interested to look at where we rank in exports/GDP: 103rd, with the two countries just above us El Salvador and the Philippines, and the two below us Russia and Iran....

  3. Re causation, it could (just possibly) be the case that infrastructure is entirely a backward linkage from GDP, but it's unlikely. It's probably not wholly a forward linkage, either. Most likely (and I've just been reading Joel Mokyr's book on the Industrial Revolution, The Enlightened Economy) they're an inextricable symbiosis, with each facilitating/stimulating the other, or it could even be that both infrastructure and GDP are symptoms of something else (an inquiring society with flexible institutions, Mokyr p205). But from all perspectives except entirely backward linkage, inadequate infrastructure is a problem

  4. Michael Reddell3 August 2015 at 09:45

    Yes, I buy that, but I suppose my point is that it is a probably in large part a symptom of whatever makes overall business investment more generally relatively unattractive in New Zealand.