The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

The 1990s was a long decade in Canada. It was a period of transitions and turbulence, of seismic shifts in the Canadian economy and dramatic changes in many longstanding public programs. It was also a decade in which Canadians' attitudes toward their economic future and their expectations of government seemed to evolve in new and uncharted directions. The decade began with a deep, prolonged recession yet it ended with the return of strong economic growth. The basic structure of the Canadian economy was being reshaped by forces felt around the world, such as trade liberalization, globalization and technological change. The 1990s also saw major changes in public policy. Most importantly, the basic strategy guiding macroeconomic policy shifted dramatically. Monetary authorities adopted price stability as their primary objective, producing restrictive inflation targets and high interest rates compared to many other countries. Fiscal policy was also tightened sharply, as federal and provincial governments moved aggressively to eliminate longstanding deficits, mainly through deep cuts to public expenditures. The purpose of this introduction is twofold. First, it provides a synthesis of what the editors see as the main themes that emerge from the different chapters, including a discussion of the implications for public policy and second, it provides a detailed overview of the main findings of all chapters in the volume. The chapters are written by leading experts in the field and provide more detailed views of specific dimensions of the economic and social developments of the 1990s. The chapters are organized into four sections dealing with basic concepts, the public view of economic and social trends, changes in key public policies, and the outcomes in terms of the economic, social and environmental record of the 1990s.

The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity

The issue of sustainability of natural capital and implications for economic growth ranks high in the interests of both policy makers and the general public, as manifested by the intense debate on Canada's ratification of the Kyoto accord. In this chapter, Nancy Olewiler makes an important contribution to the debate on natural resource sustainability by exploring the crucial, but often ignored, role of productivity in the maintenance of natural capital sustainability. Olewiler defines sustainability as the ability of the economy to maintain the flow of production necessary to ensure non-decreasing per capita consumption indefinitely, so future generations can have a standard of living equal to or better than that of the present generation. She makes a critical distinction between the concepts of strong and weak sustainability.Natural Resources, Resources, Non-renewable, Renewable, Productivity, Sustainability, Growth, Labour Productivity, Labor Productivity, Technology, Technological Change, Environment, Environmental, Environmental Services, Multifactor Productivity, Multi-factor Productivity, Total Factor Productivity, Pollution, Emissions

The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity

This chapter by Emile Tompa provides a comprehensive review of the theoretical underpinnings and empirical evidence of the health-productivity relationship with an emphasis on the public policy implications. This relationship goes well beyond the obvious effect of health on capacity to work both in terms of energy level and working time. Focusing on the Grossman model, the author describes three additional pathways through which health can affect productivity at an aggregate level. For instance, individuals with a longer life expectancy may choose to invest more in education as they receive greater returns from their investment. They may also be motivated to save more for retirement, which would lead to greater accumulation of physical capital. Finally, improvement in the survival and health of young children may provide incentives for reduced fertility and may result in increased labour-force participation.Health, Safety, Human Capital, Nutrition, Longevity, Disability, Sickness, Productivity, Labour Productivity, Labor Productivity, Growth, Life Expectancy, Healthcare, Health Care, Health Spending, Investment, Childcare, Child Care

The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity

In this chapter, William Watson challenges Heath's interpretation of the benefits of productivity growth, but agrees with Richard Harris' views on the state of our knowledge about the potential contribution of social programs to productivity growth. Watson tackles Heath's assessment of the social benefits of productivity growth directly, starting with the issues of social inequality and poverty. He argues that there has been no flagging in redistributive effort in Canada and he challenges what he sees as Heath's preference for enhancing public expenditures, emphasizing the scope for government failures and of the possibility that higher tax rates in the contemporary period have increased the marginal cost of public funds. Even if one were able to resolve the question of the appropriate balance between the public and private sectors, Watson believes that the case for higher productivity would remain compelling. Without powerful analytical guidance, Watson concludes that reform of social policy will inevitably be guided primarily by intuition, politics and hunches. In these circumstances, he counsels modesty in aspirations.Equity, Efficiency, Productivity, Labour Productivity, Labor Productivity, Growth, Income, Inequality, Equality, Social Policy, Happiness, Poverty, Leisure, Government, Investment, Fairness, Spending, Government Spending, Government Expenditure, Expenditure, Taxes, Tax, Quality of Life

The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

In this chapter, Lars Osberg has the daunting task of examining the conceptual issues involved in defining and measuring social progress. As he highlights in his introduction, while much had been made of the fact that Canada in 2000 earned first place in the United Nations' Human Development Index, other indices have produced much less brilliant results. Modern pluralist societies, however, have no common benchmark from which to define the "good" society. As a result, Osberg argues, "social progress" in a liberal society must be measured in the "enabling" sense that a society progresses when it enables more of its citizens to achieve the kind of life they personally value. Some of the empirical difficulties involved in constructing a measure of the attainment of social and economic rights are discussed and several quantitative indices of social progress are examined using the prism of human rights.Well-being, Wellbeing, Well Being, Social Progress, Social, Societal, Society, Values, Rights, Economic Rights, Social Rights, Human Rights, Index, Indexes, Indices, Indicator, Indicators

The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

In this chapter, John Helliwell sets the scene for many of the papers that follow by providing an up-to-date and lucid survey of the literature on the impact of social capital on both the economy or economic performance and well-being. This latter term is closely related to the concept of social progress used in this volume. He begins by defining social capital as the networks and norms that facilitate cooperative activities within groups (bonding social capital) and between groups (bridging social capital). Helliwell documents a number of studies that show that social capital actually saves lives. He surveys the literature on subjective well-being, pointing out that unemployment lowers subjective well-being by more than the usual measure of economic cost and certainly more than inflation.Well-being, Wellbeing, Well Being, Social Progress, Social, Societal, Society, Values, Index, Indexes, Indices, Indicator, Indicators, Social Capital, Happiness, Life Satisfaction, Subjective Well-being, Subjective

The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

In this chapter, Daniel Schwanen addresses the impact of the major trade liberalization efforts undertaken by Canada and its trading partners beginning with the Canada-U.S. Free Trade Agreement (FTA) in 1989. The author focuses in particular on the question of whether liberalized trade could have been a factor behind the emergence of greater inequalities in Canada in the 1990s. The author divides Canadian manufacturing industries into five groups according to their sensitivity to trade liberalization in the 1990s and to the direction taken by exports and imports following the opening of trade. Schwanen concludes from this exercise that more open trade may have contributed to inequalities in Canada, by favoring certain groups already doing relatively well, while being unfavourable to many less-skilled and lesser-paid groups.Trade, Inequality, Manufacturing, Canada, FTA, NAFTA, Free Trade, Free-trade, Trade Liberalization, Free Trade Agreements, United States, US, U.S.

The Review of Economic Performance and Social Progress 2002: Towards a Social Understanding of Productivity

Skills, innovation and human capital as they feature prominently on the policy agenda of industrialized countries concerned with productivity and competitiveness issues. Not surprisingly, formal education is the preferred and most conventional policy instrument of governments in pursuing these objectives. Indeed, "more is better" is often the guiding principle here. The actual linkages, however, are not as straightforward as they may appear. Certainly, there are gains to be achieved through a better understanding of the relationship between the skills developed through formal education and their causal impact on productivity, as well as a more nuanced approach to policy in this area. In this chapter, Arthur Sweetman points out, "the issue is not whether education has benefits but, rather, the magnitude of its 'true' benefits, the benefits relative to costs, and the distribution of costs and benefits. Sweetman examines three different sets of evidence, focusing on the impact of education on earnings at the individual level and on productivity at the macroeconomic level, and on issues related to the operation of the Canadian educational system.Education, Skills, Growth, Productivity, Labour Productivity, Labor Productivity, Educational Attainment, Human Capital, Knowledge, Quality, Education Quality, Private Benefit, Social Benefit, Value, Investment

The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

In this chapter, Don Drummond makes the case that with large deficits there was little room for the Bank of Canada to reduce interest rates to stimulate the economy and generate revenues. It was imperative that the deficit be eliminated. Tax rates were already high so the government had no choice but to cut program spending. Drummond recognizes that the cuts caused hardship for some Canadians, but feels that the suffering was relatively limited and temporary in nature. Drummond argues that the elimination of the deficit has reduced risk premia and allowed the Bank of Canada to bring interest rates down.Monetary Policy, Inflation, Inflation Reduction, Inflation Policy, Growth, Recession, Well-being, Wellbeing, Well Being, Unemployment, Expenditure, Taxation, Fiscal Policy, Deficit, Canada

The Review of Economic Performance and Social Progress 2001: The Longest Decade: Canada in the 1990s

One of the most (if not the most) highly charged public debates in this country over the past decade has been about the role of economic imperatives in dismantling the foundations of the welfare state set out in the universalist model adopted in the post-war years. Ken Battle in his chapter is critical of the ongoing public discourse on this issue, which he considers as lacking both in substance and subtlety. He argues that this has led to a polarization of views and produced persistent mythologies which in his estimation have served to insulate government from effective criticism and prevented the occurrence of a truly needed, open and informed public debate on the present and future course of social policy. Battle describes the overall process of reform and developments in social policy in the last two decades as one of "relentless incrementalism" where cumulative, purposeful and patterned change has produced a substantial shift in the structure of the Canadian income security system. He concludes that on the whole the emerging post-welfare state will better serve Canada's evolving social, economic and political needs and sees little cause for continuing nostalgia over the fading universalist welfare state, which in his estimation never worked all that well.Social Policy, Income Support, Income Security, Economic Security, Welfare State, Welfare System, Social Safet Net, Welfare Policy, Social Security, Canada