Voltaire's satirical 1759 novella, Candide, contrasted ‘head-in-the-clouds’ complacency about this being the best of all possible worlds, despite its blemishes, with ‘feet-on-the-ground’ realism.

Viewed loftily, New Zealand’s regulations look blissfully benign. New Zealand ranked 2^nd best in the world for the quality of its laws and regulations in the Fraser Institute’s recently-released 2017 Economic Freedom of the World Index. Hong Kong was top, Singapore 3^rd. No policy problems there apparently, move on.

Yet, at ground level, poor quality, ill-justified restrictive laws and regulations abound in New Zealand. Seek and ye shall find.

This week’s article on science by DomPost columnist Bob Brockie highlighted New Zealand’s genetic modification regulations. He described them colourfully as the “most comprehensive, restrictive, antiquated and labyrinth laws in the world”.

More generally, a report in 2015 by The New Zealand Initiative identified 14 Acts of parliament that its members saw as unnecessarily troublesome.

Other Initiative reports have identified failings in the Overseas Investment Act, education regulation and land use regulation (which is behind extreme Auckland land values). Our articles on over-zealous scaffolding regulation point to a systemic weakness in value-for-money disciplines within and across regulatory silos.

So what gives? How can New Zealand be 2^nd best in the world overall for regulation, yet exhibit low regard for regulatory quality case-by-case?

A big part of the answer is that New Zealand scores 10 out of 10 for freedom of bank ownership and the absence of credit or interest rate controls.

Equally weighted with that category is labour market regulation. Here four countries outscore us (they include Fiji!). Our hiring and firing regulations and minimum wage laws are more restrictive than in many countries, but we make up ground on some other aspects. 

The remaining category is business regulation. We do poorly on licensing restrictions, the burden of tax compliance and other government administrative compliance (permits, regulations, reporting). We make up ground on bureaucracy costs and the ease of starting a business. Overall, five countries have a higher score. They include Hong Kong, Singapore and Ireland.

The bottom line is that New Zealand could be doing a lot worse in some areas and could and should be doing materially better in some others. Voltaire was right. Self-satisfaction about the overall view does not justify suffering the blemishes.