Sunday 27 December 2009

The usefulness of the 'Buy New Zealand Made' campaign

Both AntiDismal and NotPC have it wrong, says me. Both of them correctly note that the 'Buy New Zealand Made' campaign - an ad campaign put in place by Labour as a sop to the Greens - was completely useless in affecting folks' consumption decisions.

But that didn't make it useless.

The biggest problem with MMP is the costly bargains main parties have to make with support partners. The more efficient that main parties are at creating symbols to placate support parties that have zero real world effect, the better. Yes, they can cost a bit of money in the budget; NotPC says the Buy NZ campaign cost somewhere around $10 million. But that's insanely cheap compared to other anti-trade policies. I cannot imagine a better piece of policy that buys off the Greens and the nationalists while having trivial deadweight costs. Yeah, so every tax dollar has a deadweight cost somewhere around thirty cents. So the policy cost $13 million all up, pure loss. But compared to hiking tariffs or abandoning the free trade deal with China? Priceless.

Always remind yourself how much worse things could be.


  1. Yes, things could be a lot worse.

    But the costs of this piece of nonsense have the potential to be a lot higher than the government expenditure: Both the current government, when it canned the programme, and the MED report cited by anti-dismal and NotPC, consider the failure of the programme to be that it didn't achieve anything. This implicitly gives credence to the notion that it would have been a good programme if it had been effective. This leaves both the NATs and MED poorly positioned when someone comes along with a bright protectionist idea that would work.

  2. So, Seamus, your worst case is that we wind up nevertheless with the kinds of effective anti-trade stuff that the symbol may have temporarily forestalled?

    I put non-trivial odds on that getting BuyNZ in place was at least moderately important for Labour in keeping the unions and greens from screaming too loudly while they went for the China deal.