Breaking up is hard to do: Lessons from the strange case of New Zealand

Kevin B. Grier and Michael C Munger

Social Science Quarterly, 2021, vol. 102, issue 6, 2565-2577

Abstract: Objective To investigate historical antecedents for the likely effects of Brexit, the “breaking up” of the Commonwealth is considered. In particular, the effects on New Zealand in the period following “Brentry,” or the entry of the UK into the EU, are measured and used to forecast the pattern of impacts the UK may encounter. Methods The technique of Synthetic Control. This quasi‐experimental method takes conscious advantage of features of endogenous selection that enable the comparison of predicted growth against an explicit counterfactual, allowing for dynamic changes in each. Results We find that NZ's loss of preferential trade status after “Brentry” in 1973 created a lost decade for NZ. Using the synthetic control model, we find that current estimates understate, perhaps substantially, the negative effect of a hard Brexit on the U.K. economy. Conclusion NZ's famous “liberal” reforms in the 1980s did put the country back on a path parallel to its pre‐1973 path. But contrary to the conventional wisdom, these reforms did not come close to restoring NZ's income to its level had Brentry not occurred. In fact, NZ is still almost 20 percent poorer even post reforms, compared to its synthetic control.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ssqu.13047

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:socsci:v:102:y:2021:i:6:p:2565-2577

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0038-4941

Access Statistics for this article

Social Science Quarterly is currently edited by Robert L. Lineberry

More articles in Social Science Quarterly from Southwestern Social Science Association
Bibliographic data for series maintained by Wiley Content Delivery ().