Why is New Zealand relatively poor?

Caroline Glass replied thru Quora

New Zealand is one of the rich countries of the world, but it is not as rich as Australia, USA and Canada, or the United Kingdom, France and Germany.

There are a number of possible reasons for this:

1. New Zealand is remote and has a small domestic population, which makes a lot of local manufacturing less competitive. A country like Denmark can export to every country in Europe more cheaply than New Zealand can export to our closest export market. One example - the Cadbury chocolate factory in New Zealand is shutting down because more of the chocolate it produces is sold in Australia than in New Zealand, and the majority of other export markets for its products are closer to Australia than to New Zealand. This means it is more profitable to shift manufacturing to Australia even though manufacturing costs are higher there.
2. New Zealand has high domestic transport costs, because it is long and thin, and mountainous. For example, the mountains you have to cross to get from one side of the South island to the other are higher and steeper than the mountains that separate Europe from Asia.
3. New Zealand has historically had a lack of checks and balances on government power, with the result that government policies don’t get moderated by the need to negotiate and compromise (for example, we don’t have an upper house of parliament, we don’t have a full separation of legislature and executive, we don’t have local or regional tiers of government with real power). New Zealand’s GDP per capita slipped behind that of Australia in the 1970s, 80s and 90s. At the start of that period we had a government which was highly protectionist, subsidised farming even though it was our largest export industry, subsidised the establishment of heavy industries which didn’t make a profit because they believed they were the future, and even tried to get rid of inflation by making it illegal. They were followed by a government which deregulated almost everything, and were such believers in free trade that they cut tariffs unilaterally, rather than using cutting our tariffs as a bargaining chip to get other countries to cut tariffs against us. The next government was keen on cost-cutting, and they cut goverment spending so much that they caused a recession which made the tax take go down by more than they had reduced spending by. People will probably never stop arguing which of those three governments was responsible for making the country poorer, but in most larger countries none of those governments would have been able to do everything they wanted, without having to compromise with powerbrokers who had different opinions.
4. the growth in the gap between rich and poor is believed by many economists to have reduced economic growth in New Zealand.

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