Home > Behavioural Economics > NZ’s new give-way rule – more rational for consumers

NZ’s new give-way rule – more rational for consumers

I liked Tim Hazeldene’s piece in the NZ Herald yesterday concerning the new turning rules in New Zealand. He relates the the current give-way rules to the shift in policy thinking by the Labour Government in 1984, but sees the changes on Sunday as being positive – see below.

It is quite interesting, with serious implications for economic policymaking. When I found out about the give-way rule, I was sure that it must be part of the Rogernomics “reform” package of the late 1980s, and was surprised to learn that the change had been made in 1977.

The point is that the give-way rule fits in to the neo-liberal ideology that animated the Rogernomes, namely, that a narrowly defined concept of economic efficiency is the only defensible goal for government policy on all matters, public or private. As one of the traffic engineers responsible for the 1977 change explained recently in the Herald, the idea was that vehicles sitting in the middle of the road waiting to turn right into a side road typically had to wait longer, whereas the kerb-hugging left-turner had greater opportunities to make their move.

The economic reforms of the 1980s made this mistake on the grand scale: radical privatisation, deregulation, liberalisation – all in the name of efficiency, but delivering instead the lowest economic growth rate of all OECD economies through the 1990s. Equal opportunity, even if achieved, is not enough. We care about actual outcomes as well, and our outcomes were bad in many dimensions, especially the widening of the distribution of income. The moral we are now struggling to take on is that efficiency and fairness cannot be separated – if people don’t feel good about the fairness, they won’t do the stuff that delivers the efficiency.

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