Melbourne Institute celebrates half a century of insight

In 1961 consensus emerged around the need to establish a permanent group of academic economists to provide views on the Australian economy to complement those of government, the Treasury, the Reserve Bank and the private sector. 

Fortuitously, Ronald Henderson, a Cambridge graduate, was a visitor to the Reserve Bank in 1960-61 but for much of the period was located at the University of Melbourne. Henderson’s interests at this stage lay in the study of financial markets, informed by having spent time in the City of London. 

Henderson had family connections to Australia: his mother was a Melburnian and he enjoyed three childhood visits to Australia. He made his fourth visit in 1950 for his marriage to Mary Steel who came from Melbourne. Henderson returned to Australia in 1953-54 as a visiting fellow at the Australian National University but spent much time in Melbourne where his wife was living.

At the University of Melbourne, Henderson was approached by two members of the Department of Economics, Ken Blakey and Max Corden, who were concerned about the limited amount of research being undertaken. Henderson wrote a brief document setting out the aims and objectives of an applied economics research centre. He drew on his connection with the Department of Applied Economics (DAE) at Cambridge University and his knowledge of the National Institute for Economic and Social Research in London (NIESR), believing a new Australian institute should combine the attributes of both the English groups. 

Richard Downing, an influential force in university politics, acted as an intermediary to progress the concept of an institute of applied economic research at the University of Melbourne. At a meeting in September 1961, chaired by the Vice-Chancellor, Sir George Paton, it was agreed in principle to establish an economic institute at the University of Melbourne. The other members of the committee were Professor Edwin Sherbon Hills, chair of the professorial board, Professor Wilfred Prest, head of the Department of Economics, Professor Richard Downing, and business leaders and council members Sir John Alison and Sir Ian Potter. Although a federal institute in Canberra had been proposed, it was finally agreed Melbourne should go forward with its own plans. 

Henderson felt he had performed a useful function and returned to Cambridge from his sabbatical, assuming the foundation director of the new institute would be the Ritchie Professor of Economic Research, Richard Downing. But Downing preferred the independent existence of researching in a ‘department’ of his own. Instead, he convinced the University to offer Henderson the first directorship, and a readership in economics. At the age of 45, Henderson accepted the Melbourne offer, taking up his appointment on 15 December 1962. The Melbourne Institute was the first economics research institute in an Australian university and since its formation has been providing powerful economic and social policy insights. 

In its early years the Institute conducted research in a wide range of fields, including macroeconomic forecasting, financial economics and social economics, and is best remembered for its work on poverty and the development of the Henderson Poverty Line. 

Following Professor Henderson, successive directors of the Institute including Professors Peter Dixon, Richard Blandy, Peter Dawkins, John Freebairn, Stephen Sedgwick and today’s Director, Professor Deborah Cobb-Clark, have led the Institute in creating research that informs policy and enlightens debate on pertinent issues facing Australia’s society and economy.

A regular series of financial and economic reports is produced within the Institute allowing Australia to plot an informed economic course. Australia’s knowledge capital on issues such as education, health, employment, childcare and homelessness has expanded due to data collected through the Household, Income and Labour Dynamics in Australia (HILDA) Survey, the Journey’s Home Survey, and the Medicine in Australia: Balancing Employment and Life Survey (MABEL). 

Furthermore every year since 2002 the Institute jointly hosts, with The Australian newspaper, Australia’s premier economic and social public policy public platform, the Economic and Social Outlook Conference. This year’s conference (1-2 November) will focus on Australia’s future and survival in a volatile world. Speakers include Deputy Prime Minister and Treasurer Wayne Swan, Malcolm Turnbull, and Professor Judith Sloan. During the conference a book, The Policy Providers: A History of the Melbourne Institute 1962-2012 authored by Professor Ross Williams will be launched. 

Institute Director Deborah Cobb-Clark, says: “In the past fifty years the Institute has made a substantial contribution to Australia’s economic and social knowledge. Through this book and the creation of a dedicated conference we believe that fifty years of social and economics insights will be suitably celebrated.”

The Melbourne Institute will be holding a conference on 6 December to celebrate and recognise the major achievements of the Institute in the past 50 years. For further details on this and the 2012 Economic and Social Outlook conference:

http://www.melbourneinstitute.com