The 2025 Boyer Lectures are set to air on ABC Radio National and ABC News Channel every Sunday starting October 19. This year’s theme boldly declares, “Australia is freaking amazing,” a sentiment that resonates with many Australians who celebrate the country’s stunning beaches, vibrant lifestyle, and unique cultural tapestry. However, the focus of the lectures is on an often-overlooked aspect of Australia’s greatness: its democratic and economic institutions.
As an Australian who has spent significant time abroad, particularly in the United States, I return with a renewed appreciation for the institutions that underpin Australia’s prosperity. These institutions, both formal and informal, are the “rules of the game” that govern political and economic life, and they are crucial to the nation’s success. In a world where such structures are increasingly under threat, Australia’s institutions stand out as rare and valuable assets worth defending.
The Foundation of Prosperity
Australia’s wealth is undeniable. While not the richest country globally, it ranks near the top, offering its citizens better health, longer lives, and a robust social safety net. The key question is, what drives this prosperity? The answer lies in the quality of Australia’s institutions. These institutions shape incentives, channeling ambition into productive work and innovation rather than conflict and competition.
Economic historian Douglass North famously highlighted the Korean peninsula as a natural experiment in the impact of institutions. Post-World War II, Korea was divided into two regions with vastly different political and economic systems. Today, the stark contrast between the prosperous South Korea and the struggling North Korea underscores the importance of institutional frameworks.
Inclusive vs. Extractive Institutions
Economists have long debated which specific institutions are most critical to prosperity. While the answer is complex, a few patterns emerge. Inclusive institutions, such as strong property rights, enforceable contracts, and open competition, foster economic growth by ensuring that individuals reap the rewards of their labor. In contrast, extractive institutions concentrate power and wealth among elites, stifling innovation and economic progress.
“Inclusive institutions reward you for baking more cake. Extractive institutions are how elites grab instead of bake cake.”
Australia’s inclusive institutions have allowed it to thrive, much like South Korea. In contrast, Argentina, once a peer of Australia in terms of potential, has struggled due to extractive institutions that have led to economic instability and political turmoil.
Australia’s Electoral Innovations
Australia’s electoral system is a testament to its institutional strength. Compulsory voting ensures high turnout, reducing the influence of money in politics and fostering a more representative democracy. The secret ballot, preferential voting, and independent electoral commissions are innovations that have contributed to the country’s stable and responsive political landscape.
These systems prevent voter intimidation, ensure privacy, and allow for a more nuanced expression of voter preferences. The result is a political environment where politicians must persuade rather than polarize, leading to more effective governance.
Responsive Political Institutions
Australia’s political institutions are designed to be responsive and adaptable. The fusion of the executive and legislative branches, strong party unity, and the ability to replace leaders efficiently contribute to a system that can quickly respond to challenges. This flexibility was evident during the global financial crisis and the COVID-19 pandemic, where Australia’s institutions facilitated swift and effective responses.
“Our institutions delivered on our values. We looked out for each other, and we looked to experts for guidance.”
The Case for Radical Conservatism
In a world where democracy is increasingly under threat, Australia’s institutions offer a model worth preserving. This “radical conservatism” is about maintaining and enhancing the inclusive nature of these institutions to ensure continued prosperity. Recent reforms, such as those to the Reserve Bank of Australia, demonstrate a commitment to evolving these structures while maintaining their core strengths.
Australia’s institutions are not without their flaws, particularly regarding inclusivity for First Nations Australians. However, the overall success of these institutions in fostering prosperity and stability is a testament to their value. As global challenges mount, the need to defend and strengthen these institutions becomes ever more urgent.
In conclusion, Australia’s institutions are indeed “freaking amazing.” They are the unsung heroes of the nation’s success, providing a foundation for prosperity, stability, and trust. As we navigate an uncertain future, these institutions will be crucial in ensuring that Australia remains a beacon of democracy and economic strength.
