Divergent Paths of State-Society Relations in European and Trans-Tasman Economic Integration

Abstract:

Observers of transnational market integration in Europe and elsewhere tend to assume a direct relationship between economic complementarity — high levels of economic transactions between countries — and depth of integration. Economic complementarity provides greater opportunities for private actors to capture the benefits of integration and is therefore assumed to be a source of social ‘demand’ required for integration. This article challenges this conventional wisdom. Australia and New Zealand have achieved a level of market integration that is comparable to that in Europe. Yet, the two countries lack economic complementarity, suggesting an alternative mechanism to the one outlined above. Rather than social groups ‘demanding’ integration vis-à-vis policy-makers’ reluctance to ‘supply’ it, in the trans-Tasman case, policy-makers led integration as the source of both ‘supply’ and ‘demand’. This observation suggests the need to question, rather than assume, the empirical sources of supply of, and demand for, efforts to coordinate economic markets transnationally.