Biology of Business

New Zealand

By Alex Denne

New Zealand's Mixed Member Proportional electoral system, adopted in 1996 after a binding referendum, produces coalition governments that closely reflect the popular vote — eliminating the majority-from-minority distortions common in first-past-the-post systems. The political culture emphasises pragmatic reform: New Zealand was the first country to grant women's suffrage (1893), pioneered comprehensive welfare state legislation, and introduced a nuclear-free policy that cost it the ANZUS alliance with the United States. The economy depends heavily on agricultural exports — dairy alone accounts for roughly 25% of export revenue — creating a commodity dependency that the country manages through a floating exchange rate and independent central bank. New Zealand's geographic isolation (2,000 km from Australia, its nearest significant neighbour) imposes structural trade costs but also provided a COVID-19 advantage, enabling border closures that eliminated community transmission for extended periods. The governance model favours experimentation: reforms are implemented rapidly in a small, cohesive population and rolled back if they fail.

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