Characteristics of Economic Growth in the Netherlands During the Post-war Period

This paper provides a description of the economic growth process and its major characteristics in the Netherlands from the 1930s up to the present. The first part presents some main characteristics of the long-run growth performance of the Dutch economy. It is shown that the Netherlands has gradually fallen behind the rest of northwestern Europe in terms of per capita income, whereas its labour productivity level -- notably in manufacturing -- remained relatively high. The Dutch economy is characterized as very capital intensive. The second part of the paper provides a chronological account of post-war growth.The final part of the paper deals in detail with three specific aspects of the Dutch economy: (1) the labour market; (2) the dependency on the performance of the external sector; and (3) the relatively high level of public spending and taxation. It is shown that the centralized wage policy in the Netherlands of the 1950s and the 1960s gradually evolved into a system in which free wage negotiations prevailed. Exports are shown to be an important source of growth throughout the period under consideration. The evidence of a negative effect of a large government sector on economic growth is weak in terms of its effect on the supply of labour and capital in the Netherlands.