Dr. Daniel Mitchell
Thanks to its modest size and geographic isolation, New Zealand automatically is in a position of having to fight harder and work smarter to be competitive. The slowdown in the global economy is going to make that task more challenging, which puts considerable pressure on John Key, the new Prime Minster and leader of the National Party.
Economic theory does not necessarily tell us the proper size of government. Instead, economic theory tells us to examine costs and benefits in order to determine whether resources are allocated in a manner that increases or decreases economic growth.