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The catalysts of small town economic development in a free market economy: A case study of New Zealand

Along with most of the Organisation of Economic Cooperation and Development, New Zealand has experienced significant changes in local and regional development policy and practice since the wide-spread adoption of neoliberal reforms in the 1980s. Policy interventions have restricted the powers of local governments, rationalised state support for more marginal areas and ultimately led to a scenario in which local communities are obliged to become more pro-active in the determination of their local economic futures. This paper discusses how neoliberal changes have impacted on New Zealand government policy and spatial development. In the second part of this paper, based on field research, the implications of these changes on smaller, more marginal urban centres less well positioned to adapt to a context of neoliberalism and change are investigated. Evidence is drawn from statistical indicators of change and from a study of 68 small towns to identify common catalysts and barriers to economic development and diversification. The study reveals the key role which entrepreneurs, in particular those who desire to encourage others to come and locate in their town, can play in the economic wellbeing of their towns in an era of reduced state support.