AUSTRALIAN PUBLIC POLICY AND THE PROBLEM OF FRAGMENTATION
: Politics matters in policy. In particular, the way in which a society organises its structures for bargaining affects the extent to which it is able to solve the general problem of “externalities” resulting from private choice. Two “ideal type” societies, the corporatist and the pluralist, are contrasted. It is suggested that the apparently superior economic performance of corporatist societies may be due to the fact that they have more efficient means of making collective choices than do pluralist societies. It is argued that, as a society which is best described as fragmented rather than pluralist or corporatist, Australia may be missing out on the advantages offered by well-structured bargaining. In particular, it may be possible significantly to improve decision-making practices by means of an Accord between business and government which promotes policy-related trade-offs within an agreed general framework.