The Contribution of Applied General Equilibrium Analysis to Policy Reform in Australia

Applied general equilibrium (GE) modelling is widely used by Australian federal government agencies involved in policy making. With the possible exception of Norway, this situation seems to be unique to Australia. The present paper traces the history of the IMPACT Project, an initiative of the Australian Industry (formerly Industries Assistance) Commission in association with a number of Australian universities, which has been instrumental in securing the widespread acceptance of the GE method in applied policy economics. We note, inter alia, that the largest loser from Australia's manufacturing protectionism, namely her export-oriented farm sector, has adopted the GE approach in pressing its case to government. We ask the question: 'To what extent has applied GE modelling been influential in achieving the turn around in Australia's stance to commercial policy?' We present the relevant evidence in abbreviated form, but leave the answer to the reader.