State transformation and resource politics: Australia and the regional political economy

Abstract

The fundamental research question we seek to answer is this: why has this resource boom, say in contrast with the Korean War and post Second World War booms, not produced long-term political and policy reforms to accommodate the distribution and uneven impact which are the inevitable consequences of the rise in commodity prices? In answering this question, the argument we advance is that the political and policy responses to the current boom must be located in the context of shifts in power and interests in the domestic political economy and in the broader regionalisation of the political economy that have entrenched new transnational and regional forms of capital. An important dimension of this state transformation is the transformation of subnational state institutions and the emergence of what we call the local regulatory state – and its reflection in the territorial politics between resource-rich Australian states and the Federal government. The recent boom in Australia has seen some subnational states engage in activities that have been, until recently, the preserve of the Federal government, namely a complex of diplomacy and international trade. These recent moves have gone well beyond the past symbolic state/federal tensions based on party politics and the creation of sister cities. The Australian case – a resource boom in a developed country with well-developed and capable institutions – provides us with an analytical framework to move beyond the resource curse arguments.