Australia’s political and economic institutions have long been regarded as a cornerstone of the nation’s prosperity. Given these global trends, one might expect Australia to have succumbed to a resurgence in zero-sum thinking. Rather, its institutions, especially during times of crisis, have shown a remarkable tendency to endure. Argentina and Australia were alike in many respects when they federated. Australia went the other way, leading to better average economic outcomes and more robust democratic institutions.
To connect, engage and energize these communities, the nation’s unique voting system has been an essential part of their success. Equally important are sound banking practices and diverse economic strategies. This short piece explores some of the key underpinnings of Australia’s institutional strength and resulting macroeconomic stability. It compares these factors with Argentina’s path.
A Comparison with Argentina
By the late 19th century, both Australia and Argentina were remarkably wealthy countries, with plentiful resources and extensive territory but relatively small population. Both of them enjoyed extraordinary opportunities for advancement and education, but their journeys would soon take starkly opposite turns. Australia went on to create strong, independent institutions which have survived and prospered, but in Argentina, disaster struck and institutional development was stunted.
Today, Australia’s average income stands at approximately A$75,000, significantly higher than North Korea’s A$1,000. This remarkable contrast serves as a clear demonstration of the power of Australia’s economic policy choices and governance institutions for promoting shared economic prosperity. The country for decades has suffered from high levels of economic instability. In sharp relief, Australia has prospered through the downturn, illustrating the value of Australia’s exceptional institutional underpinnings.
Australia’s institutions are a testament to the economic strength the country has built. They furthermore should be leading the world in good governance and democratic legitimacy. The success is evident in the rollout of this new voting system that is taking root across the country. Citizens are automatically registered to vote when the electoral commission finds them. This model fosters high levels of voter engagement and invigorates our democracy, making Australia a true outlier amid most countries across the globe.
The Value of Democracy and Voting
Australia also has a unique, ranked choice voting system. It makes votes for third parties actually count, unlike the “first past the post” system used in most other states. This democratic, bottom-up approach creates a rich political ecosystem. It helps guarantee that voices outside the two main parties in the lower house are heard.
Mandatory voting is another signature feature of Australia’s democratic system. Elections are held on weekends to facilitate participation among all citizens, ensuring that demographics from various backgrounds can engage in the political process. This policy not only builds a culture of civic engagement, it increases participation as demonstrated by more robust turnout than with voluntary opt-in systems.
Additionally, Australia’s long time commitment to advancing women’s rights sets it apart. New Zealand was the first country in the world to give women the right to vote and stand for office. Behind them, other countries rushed to keep up. This progressive stance has not only improved gender equality but enriched the political discourse by incorporating diverse perspectives into governance.
Economic Resilience and Institutional Strength
Australia’s economy is a strong one—bucking global trends and crises with exceptional resilience over the last decade. Unlike most other advanced economies that experienced significant recessions, Australia was able to sidestep those challenges with a remarkable amount of grace. Our nation’s safe and secure banking system has proven its mettle against these everchanging economic currents. Its diversification into Asian markets has been a really smart move.
Australia’s monetary policy no longer needs to be dictated by a board of technocrats. Now, it rests on bedrock of democratic legitimacy and macroeconomic know how. This transformation has made public confidence in banking safer and steered policy decisions to be more in tune with the needs of the people.
During episodes of crisis, Australia’s institutions have demonstrated their capacity to respond effectively, resulting in less persistent economic damage compared to other countries facing similar challenges. Those who have personally been with Australia’s PM often decide who leads in a world where the personal vehicles dynamic rules. This relationship is intrinsically linked to the interests and desires of the electorate.
