Alan E. Bollard CNZM, PhD, LLD(hon), D Com(hon), FRSNZ
At the end of the school year in 1968, Mr Murray Nairn, the then Headmaster at Mt Albert Grammar School, wrote a testimonial for one of the senior leaving students. In that testimonial he stated:
“He has a tremendous capacity for independent work, and is thoroughly reliable. He is a boy of good appearance, well mannered and well spoken. He is of the soundest character and will develop exceptionally well.”
While Headmaster Nairn was clearly an astute judge of character, little did know just how exceptionally well that boy would in fact develop. But 54 years on, we have the benefit of hindsight, and we can attest to the accuracy of the forecast made by Headmaster Nairn. Who today could ever doubt that Alan Bollard did in fact proceed to “develop exceptionally well;” arguably an understatement given Alan’s career and contributions.
Of course, the headmaster’s prediction was grounded in some solid empirical evidence. Alan had been dux of the school, as had his father before him. Much later when Alan was inducted into the school’s Hall of Distinction, he joined his father as the only father and son to have been both dux and inductees in the Hall of Distinction.
Alan’s studies at the University of Auckland culminated in his PhD thesis on the responses of agricultural producers to technical change on Atiu in the Cook Islands. While PhD theses are typically seldom read by more than the academic supervisor and the external examiners, Alan’s 1977 thesis presages much of what is to characterise his subsequent career. It is a rich blend of economics and anthropology, with sensitive treatment of the historical, social and cultural context. The most advanced and relevant analytical frameworks of the time for individual decision making and risk modelling are applied to a rich data set, collected after months of careful and detailed survey work on the island. A 135 page technical appendix attests to Alan’s solid grounding in mathematics and econometrics. Current students of technological change would do well to read this thesis.
After a spell at the South Pacific Commission in New Caledonia, Alan ventured further, and drawing on his background in technical change, worked in London at the Intermediate Technology Development Group (currently named Practical Action). Much of his work focused on the role for appropriate technology to enhance employment. But there were two important additional themes addressed by Alan. Notably, a concern that economic analysis should encompass distributional consequences; in short, people matter. And long before it was fashionable, he was writing on the importance of energy conservation.
1984 saw Alan repatriate and join the New Zealand Institute of Economic Research where he was subsequently appointed the Director. A key activity of the Institute was the long running Quarterly Survey of Business Opinion, and Alan served as its editor for this key cornerstone product of the Institute for over five years.
The years immediately following his return saw economic policy in New Zealand go through one of the most substantial transformations in the country’s history. This provided fertile ground for the work of the Institute. Through Alan’s leadership and his own research and writings, there followed a substantial series of reports and books covering many aspects of the reforms: changes in the labour market, reductions in the tariff regime and import licensing, the regulation of industry, the restructuring of the telecommunications, gas and electricity sectors. Alan paid particular attention to the impact of reforms and regulation the business sector. Given much overseas interest in the economic liberalisation undertaken by New Zealand, the work of the Institute, and in particular books authored, co-authored and edited by Alan, provided a wide international audience with a broad understanding of the processes and outcomes of the economic reforms.
This work, in part, laid the ground for Alan’s appointment in 1994 as Chairperson of the Commerce Commission. As the Commission was established under the Commerce Act only in 1986, Alan arrived to lead an organisation that was still in its relatively early years. The Commission has a wide-ranging mandate to ensure markets are competitive; to regulate selected markets where there is limited competition (including gas, telecommunications, electricity); and to protect consumers from unfair trading practices. The Commission needed to achieve a balance between its regulatory and compliance roles while not impeding efficiency and economies of scale. Alan was acutely aware of the trade-offs.
There were a number of important, high profile cases, not the least being the acquisition of Ansett Airlines by Air New Zealand. The health sector had been restructured, separating purchasers from providers. The Commission, focusing on education, ran a series of seminars to explain the application of the Commerce Act to the health sector, and to promote awareness of compliance.
The Commission had just under 70 staff and a prodigious workload of enforcement of both the Commerce and Fair Trading Acts. To ensure the Commission was operating efficiently, Alan introduced a series of output and quality indicators, and initiated systems for monitoring awareness, acceptance and compliance with the Acts, so enhancing the ability of the Commission to, in Alan’s own words: “assess its own performance more effectively.”
For five years from 1998, Alan was the Secretary of the Treasury. His appointment marked an important change. Until that time, all previous Secretaries had been appointed from within the department. The appointment of an outsider was seen as a healthy development and one supported by Ministers. Soon after his appointment, the Fourth Labour government was elected. Their leadership had made no secret of their somewhat disparaging view of the Treasury. Alan undertook the task of rebuilding the government’s confidence in its principal economic advisor. In time, a much closer relation with the government was restored.
At the same time Alan recognised two aspects of the Treasury that he viewed as shortcomings. He felt that the Treasury should have more cooperation with the academic community. To this end he established an Academic Linkages Programme involving, scholarships, internships and visiting academics who would spend time working in the Treasury on topics of mutual interest. An important element in the linkages programme was the Guest Lecture Series which continues after more than two decades, and has seen leading academics from New Zealand and overseas deliver an invited lecture at the Treasury.
Furthermore, he was concerned that the Treasury’s own capacities in economic research were not at a level commensurate with keeping the organisation at the frontier of good practice. To address this, he appointed a number of former academics to provide a more solid foundation for the Treasury’s policy work in taxation, macroeconomics and productivity. It should also be noted that Alan commissioned a major history of the Treasury: 1840-2000, an important legacy of his tenure.
In 2002, Alan accepted the position as Governor of the Reserve Bank, a position he was to hold for the next 10 years. Alan’s contributions during his time as Governor extended well beyond the basic mandate of achieving price stability. In fact, by the time of his appointment the inflation rate was down to around 2%, a factor contributing to enhanced credibility of monetary policy. Alan saw this as an opportunity to provide greater scope for a somewhat more flexible approach. With this, the Bank could “look through” short term volatility and achieve the mandated level of price stability over the medium term. This was encapsulated in the 2002 Policy Target Agreement signed by Alan. At the same time, continued attention was given to output and employment in the formulation of monetary policy.
While the OCR system had been adopted in 1999 as a central mechanism of monetary policy, during Alan’s tenure it was firmly embedded. Furthermore, Alan emphasised the importance of communicating with, and providing forward guidance to the markets. An important feature of Alan’s tenure was the increased role for prudential supervision of the banking and financial sector. He gave particular attention to the governance of local banks operating in New Zealand which were part of their large Australian parent banks. The dividends arising from these moves were amply demonstrated in the resilience of the banking system at the time of the Global Financial Crisis.
In yet another major appointment to a senior leadership role, in 2012 Alan was named Executive Director of the Secretariat for the Asia Pacific Economic Cooperation (APEC) based in Singapore. He would go on to be the first Director of APEC to serve two terms. Traditionally APEC had focussed on a range of impediments to trade in the region including border barriers, tariff barriers and non-tariff barriers at the border. But new challenges and opportunities arose throughout Alan’s directorship. While earlier APEC sessions had identified behind-the-border barriers, additional emphasis was sustained during Alan’s term together with a concomitant new focus on regulatory harmonisation. Furthermore, additional new policies were needed to promote great integration in the fast growing trade in services.
Currently Alan is a Professor of Practice at the School of Government, Wellington School of Business and Government, and the inaugural holder of the Chair for Pacific Region Business. He is the Chairperson of the Advisory Board for the Centres for Asia-Pacific Excellence and Chair of the Pacific Economic Cooperation Council (PECC). In addition, he chairs the New Zealand Infrastructure Commission. He is a Director of China Construction Bank. Allied to his keen interest in painting, he Chairs the New Zealand Portrait Gallery.
No synopsis of Alan’s career and contribution would be complete without reference to his efforts to highlight the life and work of New Zealand born economist, A.W.H. (Bill) Phillips. Phillips, in the immediate post WWII years invented an hydraulic machine to solve a set of economic relationships, then beyond the analytical capacity of any existing computer. A small number of the so-called MONIAC (Monetary National Income Analogue Computer) machines were made. An important legacy of Alan’s efforts is that New Zealand now has a working machine, originally housed at NZIER, and currently installed in the Museum of the Reserve Bank, another contribution of Alan’s time as Governor.
Despite holding a succession of senior leadership roles, Alan has always found time to write: at last count some 14 books authored or co-authored, and numerous essays. What is remarkable is the breadth of his writings, covering economic history, a personal saga of the global financial collapse, the life and times of Bill Phillips, numerous essays and novels. These writings, and his continuing contribution to economic debate in New Zealand attest to his role as a communicator.
Few if any, could match the extraordinary breadth of his contributions to economic policy, both in New Zealand and more widely. This award is made in recognition of his outstanding contributions to a wide range of economic policies, for his leadership of all of New Zealand’s major economic institutions, for his focus on governance, and for his role in fostering trade, economic growth and cooperation in the Asia-Pacific region. The New Zealand Association of Economists is pleased to make the award of Distinguished Fellow to Dr Alan Bollard.
Grant M Scobie
Bibliography: A Selection of works by Alan Bollard and co-authors.
Small Beginnings: New roles for British businesses, 1983: Intermediate Technology Publications.
Industrial Employment through Appropriate Technology, 1983: Intermediate Technology Publications.
Just for Starters: A Handbook of Small-Scale Business Opportunities, 1984: Intermediate Technology Publications.
Less Fuel More Jobs: Promotion of Energy Conservation in Buildings 1985: Policy Studies Institute (with Mayer Hillman).
Markets, Regulation, and Pricing, 1985: New Zealand Institute of Economic Research, Research Paper 31 (Co-edited with B. Easton).
As Though People Mattered: A prospect for Britain, 1986: Practical Action Publishing (with John Davis) Revised edition 2013.
Economic Liberalisation in New Zealand, 1987: Allen & Unwin/Port Nicholson Press. (Co-edited with R.A. Buckle).
Research and development in New Zealand : a public policy framework, 1987: New Zealand Institute of Economic Research, Research Monograph 39 (with David Harper and Margriet Theron).
The Economics of the Commerce Act, 1989: New Zealand Institute of Economic Research, Research Monograph 52 (Editor).
Productivity and quality in New Zealand firms: Effects of deregulation, 1989: New Zealand Institute of Economic Research, Research Monograph 46 (with C.Campbell and J.Savage)
Turning It Around: Closure and Revitalization in New Zealand Industry, 1991: Oxford University Press (Co-edited with John Savage).
Dismantling the Barriers: Tariff Policy in New Zealand, 1992: New Zealand Institute of Economic Research, Research Monograph 57 (with R.G. Lattimore and I. Duncan)
How Economically Stressed Firms Adjust, 1992: NZIER Working Paper 92/11(with L. Fraser Jackson).
Economic Stress in the New Zealand Business Sector: 1975-1992, 1992: NZIER Working Paper 92/12
An Analysis of Change at the Level of the Firm: A Prelude to a Definition of Stress, 1992: NZIER Working Paper 92/23 (with L. Fraser Jackson).
New Zealand: Economic Reforms, 1984-1991 (Country Studies) 1992: Ics Pr Publishers.
A Study of Economic Reform: The Case of New Zealand (Contributions to Economic Analysis) 1996: North Holland (Co-edited with B. Silverstone and R.G. Lattimore).
Chapter 6: pp. 69-84 in The Coming of Age of Competition Law in New Zealand. (1996) Commerce Commission, Wellington.
The Structure and Dynamics of New Zealand Industries, 1998: Dunmore Press (Co-edited with M. Pickford)
Succeeding in the world economy: New Zealand outward direct investment: causes, patterns and effects, 1999: Dunmore Press.
Flexibility and the limits to inflation targeting, 2008: Reserve Bank of New Zealand Bulletin, 71:3 (with T. Ng)
Crisis: One Central Bank Governor and the Global Financial Collapse, 2010: Auckland University Press (with Sarah Gaitanos).
What I have learned from the Global Financial Crisis, 2012: 11th Annual Sir Leslie Melville Lecture, Australian National University, Canberra. https://crawford.anu.edu.au/news-events/events/1169/11th-annual-sir-leslie-melville-lecture-what-i-have-learned-global-financial.
The Rough Mechanical: The Man who Could, 2012: Xlibris.
Economic Disruptions in The Asia-Pacific, 2016: Public Lecture, Centre for Banking and Finance Law, National University of Singapore,
Changes Afoot in the APEC Economy, 2016: Guest lecture, The Treasury.
A Few Hares to Chase: The Life and Times of Bill Phillips, 2016: Oxford University Press.
Globalisation Challenges and New Zealand’s Upcoming APEC Hosting 2021, 2017: Guest lecture, The Treasury.
The Code-Cracker and the Tai-Chi Dancer, 2018: Xlibris.
New Zealand as a Leaky Economy: Are we responding to changes in globalisation? 2019: Guest lecture, The Treasury.
Economists at War: How a Handful of Economists Helped Win and Lose the World Wars, 2020: Oxford University Press.
Who wants to be an economic policymaker in a crisis? 2020: Institute of Public Administration,https://ipanz.org.nz/Story?Action=View&Story_id=150595
Weaponization of Money: Could this be the First Economic World War? 2022: https://iai.tv/articles/the-weaponization-of-money-auid-2077
Economists in the Cold War: How a handful of Economists Fought the Cold War of Ideas, forthcoming, Oxford University Press.
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McKinnon, M. (2003) The New Zealand Treasury: 1840-2000. Auckland University Press.