Trade Policy at Work

New Zealand’s Recognised Seasonal Employer Scheme: An Object Lesson in Policy Making – But for Whom?

Since 2007 New Zealand’s Recognised Seasonal Employer (RSE) Scheme has been a successful temporary migration programme allowing Pacific island residents to work for a season in New Zealand. This paper explores the interests, ideas and institutions behind its creation. The RSE represents a high point in the design of evidence-based policy which will be difficult to repeat because the building blocks are so rarely all present at the same time and place. The scheme solved the horticulture and viticulture sector’s labour shortages, brought income to the Islands and cemented New Zealand’s influence in the Pacific region.

This study discusses the Recognised Seasonal Employer (RSE) Scheme which provides for up to eight thousand Pacific Islanders to work for the agricultural season in New Zealand. The RSE is one of very few migration policies to have been subject to formal impact assessment. This concluded that the RSE was One of the most effective development interventions for which rigorous evaluations are available. …heralded as international best practice. The large development impacts seen here should lead other countries to consider similar policies.

It discusses not the outcome of the RSE scheme, but its origins and replicability. I argue that the RSE is indeed an object lesson in policy-making – not only has it been highly successful in its own terms, but its introduction arose from a conscious and painstaking policy process. That process involved an interaction between policy makers and researchers; the intermediation of research results into a digestible format; a quiet negotiation between policy-makers, interest groups and an expert analyst; institutional support; effective implementation, and, finally, thorough evaluation. The creation of the RSE arose from such a fortuitous coincidence of interests that it will be replicable only very rarely. The analysis is designed around Jagdish Bhagwati’s three ‘I’s of political economy – Interests, Ideas and Institutions – and starts with a brief account of the RSE Scheme itself.

The direct beneficiaries of the RSE scheme were agriculture in New Zealand, which got scarce workers, and the workers of the Pacific Islands who got jobs: horticulture and viticulture are major sectors in the New Zealand economy and had a strong interest in solving their labour shortages by bringing in foreign workers; the economies of the Pacific Islands were becoming less and less viable so work in New Zealand offered big income gains. But tiny isolated countries rarely exercise any influence on policy making in larger and richer powers and so it was as much the foreign policy interest of maintaining Oceanic influence in the Pacific as the islanders’ incomes that promoted change. In addition there were interests potentially opposed to the RSE – e.g. local workers and humanitarian and human rights activists. The RSE was notable in the extent to which it assuaged their fears through careful design and a huge degree of engagement with them.

Turning to ideas, the attractions of temporary migration schemes had been evident to scholars and policy makers for some time. However, during the 1990s, there was a prevailing pessimism about their humanitarian implications and their inability to avoid turning into permanent migration. But by the early to mid-2000s, however, two strands of research had produced sound evidence of the potential advantages of temporary migration schemes. The first showed that, as the world economy became more competitive and developing countries’ preferential access to rich markets was eroded small isolated countries, whose exports had to be shipped long distances and in small consignments (and hence faced excessive costs) would never be competitive enough to generate the incomes modern peoples aspired to. The second quantified the huge benefits created by moving people from areas of low productivity to those of high productivity.

A third important idea was the passion that grew over the 2000s for formally evaluating development interventions and policies. Both the New Zealand government and World Bank, which was advising on the development aspects of the RSE, appreciated the need for evaluation and were able to set the RSE up in a way that permitted – for the first time in migration – a sound evaluation. This mattered because it re- assured New Zealand’s policy makers that the policy would not continue unless it was doing material good in the Pacific and not causing harm at home – i.e. it created some political space for what was a very sensitive policy experiment. In addition, because the evaluations turned out to be very favourable, they offered the policy political cover once it was established.

Ideas do not sell themselves to policy makers – rather, they require intermediaries able to understand and adapt academic research and to present it accessibly to policy makers as and when they need it.

This needs to be done by people with both ability and reputation and is a classic function of the technocratic end of the policy community – development institutions. Pre- eminent among such people are the international development institutions and pre-eminent among them is the World Bank.

The RSE can be traced directly back to one such effort and the temporal dimension was important within it. One of the less commonly recognised roles that institutions play in the propagation of good policy is as repositories in which ideas can lodge temporarily before being brought out at an appropriate moment. Thus the Bank’s East Asia and Pacific Region was exploring temporary migration and initiating a conversation in the Pacific before the New Zealand government knew that it needed it, and its staff was ready with ideas, evidence and practical advice.

The engagement with the New Zealand authorities to tailor the policy to their needs and fears was extensive and exhausting, and involved experts in the Bank’s Research Department and elsewhere. It was during this process that the idea of evaluating the RSE formally emerged. Such interactions depend very critically on mutual trust between the parties – especially of confidentiality. Governments need to know that they can back out of sensitive policies without repercussions if they are ever to get into discussing them.

If the World Bank played a key role in designing the RSE, the parties also had to create or use existing institutions to implement it. In fact they mostly extended existing bodies and institutions to provide the RSE’s various functions, including recruitment and initiation, pastoral care in New Zealand, checking work conditions and ensuring departure. By giving it a solid institutional foundation, policy makers not only increased the RSE’s chances of working, but they also gave it a degree of persistence – an attempt to unravel it would have to deal with custodians of several different parts of it.

Few policies in any area emerge from seven years’ experience and two formal evaluations with as clean a bill of health as has New Zealand’s Recognised Seasonal Employer (RSE) Scheme. There are many contributory reasons, but good design clearly lies at the heart of the matter. And good design reflects the careful process of analysis and engagement that preceded its implementation. This process is indeed an object lesson in making evidence-based policy. But can others repeat it? The technical challenges are large but not insurmountable; the real challenge to replication is to assemble such a coherent set of interests as New Zealand discovered or created.