Richard Holden & Steven Hamilton — How Australia Gets It Done [Aus. Policy Series - LIVE]
Mar 4, 2025
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Richard Holden, a UNSW economics professor, and Steven Hamilton, an assistant professor at GWU, delve into Australia’s impressive state capacity. They discuss the effective economic interventions during COVID-19, examining the successes and failures of vaccine procurement. The conversation shifts to the complexities of federalism and housing challenges, as well as the need for reforms in unemployment insurance. Holden and Hamilton also highlight the role of local governance in crisis response, advocating for improved strategies to enhance public trust and accountability.
Australia's effective pandemic response highlighted its high state capacity through rapid economic support measures like JobKeeper.
The criticism of Australia's vaccine procurement revealed the importance of flexibility and risk management in future health crises.
Public expectations for efficient government services in Australia drive accountability, yet lapses can quickly erode trust in policymakers.
The challenge of balancing localized council governance with efficiency underscores the need for optimized service delivery at all levels.
Deep dives
Australia's State Capacity During the Pandemic
Australia's response to the pandemic showcased its high level of state capacity, particularly through swift economic interventions. The government implemented significant financial support measures, such as JobKeeper, which preserved employment and kept businesses afloat. By comparison, Australia ranked favorably against countries like the United States in terms of unemployment recovery and overall health outcomes. The quick and effective mobilization of resources evidenced the government's ability to meet urgent policy goals amidst a crisis.
Vaccine Procurement Failures
Despite successes in economic interventions, Australia's vaccine procurement strategy faced significant criticism and was deemed one of the worst globally. The government initially focused on a limited number of vaccine candidates, which backfired when one candidate failed to deliver as expected. This led to Australia falling behind in vaccination rates, creating a disparity with other OECD nations. The discussion highlighted the need for greater flexibility and a broader approach to risk management in future health crises.
Expectations of Government Performance
Public expectations for government service delivery are notably higher in Australia compared to other countries. Citizens expect systems like Medicare to operate effectively, which fosters accountability among policymakers. The alignment of public sentiment and political leadership encourages continuous improvement in state services, leading to an overall perception of high capacity. However, if performance lapses occur, such as in the vaccine rollout, public trust can diminish rapidly.
The Role of Bureaucracy in Governance
Australia's administrative processes are noted for their efficiency, which is often attributed to its capable bureaucracies. Investments in public service salaries enable the attraction of skilled personnel who are dedicated to delivering quality services. This structure allows for quicker responses to both routine governance and crises, making the administrative state more effective under pressure. Additionally, there is a culture of accountability that pressures public servants to perform well.
Federalism and Local Governance
The structure of councils in Australia fosters competition, but raises questions about the efficiency of localized governance. Some argue that more consolidation among councils could improve service delivery and reduce administrative burdens. However, maintaining smaller councils allows for greater responsiveness to local needs and preferences. The challenge lies in balancing these competing interests to optimize governance at both local and national levels.
Public Sentiment and Health Policy
Public health discussions often become polarized, impacting the implementation of effective health policies such as vaping regulations. Conflicting expert opinions can lead to misguided policies based on fear rather than evidence-based outcomes. Addressing public health issues requires transparency and trust between the government and citizens to ensure effective health measures. Policymakers must engage in open dialogue and carefully communicate trade-offs to gain public support.
Management of Future Crises
Preparing for potential future crises includes establishing robust systems for health crises and ensuring adequate resources are available. There is a call for dedicated facilities to handle quarantines rather than relying on hotels, which proved problematic during the pandemic. Building mRNA and vaccine manufacturing capabilities locally is crucial for future preparedness. Additionally, practice drills and training for government officials could improve readiness to tackle public health emergencies.
Trade-Offs in Policy Decision Making
The current political climate often sidesteps necessary discussions about policy trade-offs, affecting decision-making processes. The ability to engage the public in conversations about the trade-offs associated with various policies is essential for effective governance. Without these discussions, it becomes easier to mismanage expectations and create policies that may not align with economic realities. Politicians must prioritize transparency and express the complexities of policy decisions to foster informed public support.
This episode is the third of my live policy salons. It was recorded in Sydney on February 5, 2025.
We explore the concept of state capacity—the ability of governments to achieve their policy goals—and ask why Australia outperforms almost every other country in the world in this domain.
For the conversation, I'm joined by two of Australia's great public policy economists.
Richard Holden is professor of economics at UNSW Business School and president of the Academy of the Social Sciences in Australia.
Steven Hamilton is assistant professor of economics at The George Washington University in Washington DC, and a former Australian Treasury official.
If you’d like to attend an upcoming salon, you can get tickets here.
