Post World War II - Wool Policy Reform in Australia, 1946-1991 Lessons for Developing Countries

Since the end of World War II, Governments in almost all developed and developing countries have pursued protectionist policies aimed at protecting their domestic economies. The agricultural sector in these countries has experienced profound changes in economic conditions and undergone considerable policy change and institutional reform. These changes are some of the key dynamic forces that have reshaped the agricultural sector. This paper seeks to explain the motivation for the growth of regulation of the Australian wool industry until the demise of the reserve price scheme in 1991. It is argued that the pace and direction of policy were driven by politics of the day and pressures from wool growers rather than economic themes. It is argued that the success of the regulatory reforms was due to the ability of the marketing authorities to enforce and monitor the production and marketing of wool. Drawing on the Australian wool industry experience, this paper outlines some policy implications for other countries.