Social choice in a pluralitarian democracy: The politics of market liberalization in New Zealand

Applying insights from social-choice theory to illuminate the functioning of pluralitarian Westminster institutions, this article develops a coherent political answer to four puzzling questions about the economic liberalization that transformed New Zealand in 1984-93: why an anti-statist programme was initiated (and largely accomplished) by a labour party, why restructuring was more radical in New Zealand than in other democracies, why reformers were able to prevail through two elections and a change of government, and why they committed costly policy-sequencing errors. Understanding this remarkable case has implications for empirically grounded social-choice theory, the political theory of policy reform, and the evaluation of pluralitarian democracy - which New Zealanders themselves repudiated in 1993 by adopting proportional representation.