Hey I have a question to ask. I have been in Melbourne drinking all week at this point (I wrote this prior to the trip) and when I get back I’d like to know what NZ’s “productivity paradox” is. I was not at the conference sadly, but I saw the text of this speech from Gabs Makhlouf (Treasury Secretary). Here the paradox was stated as:
But that brings us to the so-called paradox: in view of those settings, what are the explanations for New Zealand’s persistently low productivity growth compared with many other OECD countries?
So although we have pro-growth policy settings and “New Zealand does particularly well on OECD quality of life measures such as health, civic engagement, education, safety, environment and life satisfaction”, measured productivity is lagging the rest of the developed world. Is that the paradox?
And is our interest in asking whether this difference is due to policy actually being poor (we are wrong about economics) or due to NZ being different to other countries (being a million miles from nowhere and having low population density has not meshed well with improvements in technology).
That is my interpretation – but I find the use of “paradox” fascinating, as it makes the issue sound like it is incredibly complicated at a fundamental level.
However, let us say that it is a paradox if we make a series of assumptions about NZ being just like the rest of the world, in which case our arguments look logically inconsistent. We solve the paradox by weakening those assumptions – so essentially the symposium is not so much about the paradox, but about whether the “more realistic” assumption satisfy the facts. In essence, rather than it being a focus on the paradox we are simply asking how NZ is unique – a narrower set of questions.
Or is this a misinterpretation of the true question. Is it actually impossible to really look at “counterfactual New Zealand’s” and appropriately split what is going on in New Zealand into fundamental causes. Is the very concept of trying to understand how NZ is unique a hefty, maybe unsolvable, paradox. In other words is it a situation where, even with “realistic” assumptions we end up with multiple compelling, and contridactory, results that satisfy the data. In that case, the weight of the term paradox does seem appropriate.
Or, am I just being weirdly pedantic, and should accept that all sets of data offer “paradoxes we are trying to unpack”?