The Polish Shipyard: Myth,Economic History and Economic Policy Reform in New Zealand*

The New Zealand economy before the election of the Fourth Labour Government in 1984 is often portrayed as something not only highly regulated — but as something uniquely so amongst developed nations, with a stagnant economy declining in the post‐war era and nearing collapse by the 1984 election — the Polish shipyard. We show that New Zealand was not overly‐regulated by the standards of the time, with many of its policies reflecting development elsewhere; it was generally liberalising in the post‐war era and its economic decline and supposed collapse have been considerably overstated. This invented history gave impetus to radical economic reform after 1984 by framing the apparently failed and bizarre past as forcing inevitable solutions. It is an important constraint on policy‐making in New Zealand, allowing policy to develop only along certain “appropriate” paths. It provided cohesion for policy makers in the face of less than certain results and harnessed emotional and intellectual energy towards the free‐market quest, while legitimating certain policy directions and de‐legitimating others.