Path dependence, policy learning and Australian manufacturing since the 1970s

Abstract

ABSTRACTThe impending demise of passenger motor vehicle manufacturing in Australia provides a good opportunity to view the trajectory of industry policy since the Whitlam government commenced the process of tariff cuts in 1973. It is argued that industry policy over this period demonstrates the effects of path dependence and a lack of policy learning. In the industry policy context, the path dependence perspective suggests three key factors in explaining policy effects: the importance of initial conditions; the role of cumulative causation in the interaction between policy settings, actors and firms; and the shaping role of networks. While political or electoral factors could, on occasion, generate support for threatened industries, overall, neo-liberal policy ideas guided decision-making. An examination of Australian defence industry, and a comparison of the Australian and New Zealand dairy and milk processing industries reinforces the importance of institutionally shaped path dependency.