'The provincial reflex', Peter Hartcher's coinage in The Adolescent Country, a Lowy Institute Paper released today, is a neat way of describing the chronic parochialism that has infected Australia public life for much of the past decade.

It is a period, paradoxically, when the shift in global economic activity has made Australia more central to the world. Yet an inward-looking parliament has taken the maxim 'all politics is local' to the point of absurdity. The party room has trumped the halls of international summitry. In setting national priorities, the latest polling from the western suburbs of Sydney appears to hold sway over diplomatic dispatches from Washington or Beijing.

Foreign policy has been subjugated to domestic politics. Just witness the unseemly search for a 'Malaysia Solution,' an 'East Timor Solution' or a 'Cambodia Solution' to staunch the flow of asylum seekers. All were intended to find a political solution, more so than a practical one, whatever the diplomatic fall-out.

This has been a sorry phase in Australian politics. As I argue in The Rise and Fall of Australia: How a Great Nation Lost Its Way, the 'political parochialism' of its blinkered leaders is partly the reason why: 'At the very moment when the rest of the world has shown more interest in Australia, the present crop of Australian leaders has displayed a bewildering indifference to the rest of the world.'

During this ugly era, Peter Hartcher has ploughed a lonely furrow as one of the few commentators to regularly view domestic politics through the prism of world events.

Occupying a dual role as the Political and International Editor of the Sydney Morning Herald, he has never looked on these posts as the journalistic equivalent of raising twins with markedly different personalities. Rather, he looks for the common traits in both. No one writes about Canberra in a more worldly way. So when Hartcher argues that 'Australia is seriously underperforming and it is underperforming because of the pathology of parochialism,' people should take note.

What makes this parochialism all the more inexplicable is the frequency with which external events have impacted upon domestic politics.

Ahead of the 2001 election, it was the 11 September attacks and the Tampa controversy that changed the dynamic of the race. In 2007, John Howard suffered from the unpopularity of the war in Iraq, his refusal to ratify Kyoto and the incarceration of David Hicks. In 2010, the failure of the Copenhagen global warming summit set in motion a chain of events that led to the ouster of Kevin Rudd.

As Peter Hartcher deftly chronicles, two dramatic external events, the shooting down of MH17 and the threat posed by Islamic State in Iraq, have transformed Tony Abbott's prime ministership. Hamstrung by the provincial reflex, he started off arguing that Australia should not have 'ideas above our station.' His response to MH17 in particular turned him into a more noticeable figure on the world stage and heightened his international impulses.

Abbott has ended up making just as many foreign trips in his first year as Kevin '747' Rudd – eleven. As Hartcher notes, he also realised Australia had important diplomatic tools at its disposal: chairmanship of the G20 and membership of the UN Security Council. 'In the course of a year, Abbott has been transformed,' Hartcher concludes. 'His provincial reflex has been replaced by an international inclination.'

What's striking about Hartcher's book, however, is the strength with which Abbott refutes the idea of a makeover. 'He resists the idea he has changed in any way,' notes Hartcher, who then quotes from an interview with the Prime Minister. 'The point I keep making today,' Abbott says, 'is that Australia can't change the world singlehandedly, and we shouldn't try.'

Abbott's speech to the UN General Assembly in September was punctuated by the same spasms of the provincial reflex. For a start, he trotted out the same line: 'We have never believed that we can save the world single-handedly.' But he added 'nor have we shrunk from shouldering our responsibilities.'

He also came up with what struck me as an ambitionless assertion of Australia's influence. 'We're strong enough to be useful but pragmatic enough to know our limits.' Should not Australia aspire to be something more than useful?

There were also lines in the speech, such as his celebration of the abolition of the carbon tax, that seemed aimed at a domestic audience. And the timing of Abbott's arrival in New York was telling. It came a day after more than 120 heads of government, including Barack Obama, had attended a UN climate change summit.

Abbott took no credit for the impressive work of the Australian mission in New York, a ripe example of Aussie internationalism. No one has worked harder to push humanitarian resolutions on Syria through the council than Australia's permanent representative Gary Quinlan, but the Prime Minister did not even mention of his efforts. Overall, it felt like a Small Australia speech.

My sense is that in the aftermath of MH17, Abbott had the chance to recast his global image, and in some ways he did. Here in New York, many diplomats admired his scolding remarks directed towards Vladimir Putin. Also impressive was the speed with which Australia moved in the Security Council to set up an international investigation.

But what we have seen in recent weeks sounds like a retrenchment. His absence from the climate change summit did not go down well in New York. Nor did his recent remarks that 'coal is good for humanity.' As for his comments about 'shirtfronting' Putin in Brisbane, even Australia's closest diplomatic friends thought they were hilarious. After the statesmanship displayed in the aftermath of MH17, he sounds again like a backwoodsman.

Much of this political provincialism stems from the mistaken belief that Australian voters are themselves parochial. In the same vein, politicians also exaggerate levels of xenophobia and racism of the Australian electorate. But there is an internationalist stream that prime ministers could tap. Just witness the wanderlust of young Australians, who roam the planet with their rucksacks embroidered with Australian flags, or the million-strong rolling Australian diaspora that Michael Fullilove spoke of in a previous Lowy Institute paper. Australia, with its polyglot population, is also one of the world's most successfully multicultural countries, which automatically gives it an international outlook.

That 'shirtfront' moment was telling. An Australian leader seemed to be speaking to Australia in fluent Australian, when in the run-up to the G20 he could have been addressing the world.