‘Economic rationalism’ in Canberra and Canada: Public sector reorganisation, politics, and power

Abstract

Australian public sector institutions and public sector labour relations experienced intense change during the 1980s and 1990s. Proponents of restructuring sought to insert market‐like pressures into areas formerly governed by bureaucratic mechanisms. This reversed a trend towards continual growth in state provision of non‐market based social protection and social welfare, and continual growth in the public sector's share of the economy. The politics and content of Australian public sector restructuring under Labor and then the Liberals substantially resembled restructuring efforts in two Canadian provinces. In all three examples, political pacts between unions in the exposed and non‐exposed sectors, and between organised labour and capital, determined the direction of change. But the level of institutional robustness of these various actors determined both the pace and effectiveness of change. Weak employer organisations and unions incapable of sustaining pacts in Canada produced wider oscillations in policy content that attained less substantive success than in Australia.