Exploring the Application of Institutional Theory to Tax Policy for Retirement Savings in New Zealand and Australia

Institutional theory is widely employed in disciplines ranging from history and sociology through to economics and political science. This article investigates the application of institutional theory to the topic of tax policy development. Authors such as Peters (1991), Steinmo (1993), Hale (2002) and Eccleston (2004) have successfully utilised institutional theory to explain the development of tax policy and differences in tax policy evolution across countries. This article adopts a case study perspective and investigates the potential for historical institutionalism to explain the different approaches adopted by New Zealand and Australia in their respective tax treatment of retirement savings. It is hypothesised that institutional theory will be challenged in explaining the different approaches adopted in two countries that are similar politically, economically and culturally and that face common social problems, in particular that of an ageing population.