In the various debates on the media, on twitter and on blogs like this there has been much call for specifics, for real practical suggestions on reforms that could be implemented without the need for full scale referendum debates over constitutional reform. To that end, those of us involved in making regular contributions to this blog are trying to raise the resources to arrange some events (probably starting in the autumn) to help stimulate further debate, and we will ensure to give as much notice as possible as these unfold. Continue reading
Few could argue that the regime of political finance has not had an impact on Irish politics and policy. It was the famous Tent at Ballybrit each year which symbolised the symbiotic relationship between Fianna Fáil and the property industry. Thanks to Elaine Byrne we know that the property industry accounted for more donations than ay other group. We know that the industry lobbied hard and we know it got its way. We even have an admission from government that its policies of providing tax breaks to the wealthy to facilitate more building in a building boom encouraged greater speculation, fuelled the boom and in turn made the crash so painful. Continue reading
John Considine and Theresa Reidy
University College Cork
The Department of Finance has set out its mission statement in very broad terms. Its role is ‘To support the achievement of the Government’s economic and social objectives by promoting a sound, sustainable economic and budgetary environment, continuing improvements in the efficiency of public services, and an effective framework for financial services.’
There are competing views on the role of Finance departments. The Irish Department of Finance takes the broad view for itself. The narrow view allocates a tax and expenditure role. This narrow view presumes that monetary policy and financial supervision is controlled by the Central Bank and is usually accompanied by a non-interventionist disposition on policy. The broad view is that they control tax and expenditure policy, as well as managing the economy and administering financial policy.
In evaluating the Department, whether you take a broad or narrow conception of the role of Finance, the Department has an unfavourable track record. This in itself is not particularly noteworthy, Government departments are often subject to criticism. However, the Department of Finance has long promoted itself as “first among equals”. There is a significant body of evidence which undermines this view.
The narrow view of Finance posits the Department as the “guardian of the public purse”. Hecklo and Wildavsky (1981: 40) quote a British Treasury official describing their role as “the first lesson for any new official in the Treasury is that it is the Treasury’s business to save money, not to spend it”. In this core responsibility, the Irish Department of Finance has a variable record. The first fifty years were marked by an enthusiasm for austerity, though this did not always translate into actual policy outcomes in terms of fiscal imbalance. This preference for fiscal conservatism may have led Whitaker (2009) to refer to a culture of “miserabilism” in the Department. Some looseness in current spending was planned from the 1970s and the period since 2000 marks the start of sharp increases in public spending. Recent evaluations (European Commission, Mc Carthy Report) have indicated that concern with value for money slipped sharply during this period.
In the broad view of Finance, departments are allocated wider roles in economic planning and finance policy. Economic planning is most associated with TK Whitaker’s time in the Department. This was the highpoint for the Department and economic planning in Ireland, while the low point is associated with the creation of the separate Department of Economic Planning and Development in 1977. More recently, low numbers of professional economists in the Department have pointed to the low priority given to long term economic planning and new departures in economic theory and policy.
Limited economic expertise has also been cited as an explanation for the poor forecasting record of the Department of Finance. High margins of error have long been a feature of forecasts of revenue and deficits. Poor forecasting is a feature of general Irish economic commentary and the Stability and Growth Pact update from October 2008 outlines a number of forecasts from several agencies, including the Central Bank, ESRI and private sector commentators, all of which were inaccurate, a point was made by the Secretary General of the Department to the PAC on May 6 2010. However, European evaluations have highlighted the poor forecasting record of the Department for some time. Importantly, in a comparative evaluation, the Department came second last of the 12 Eurozone countries. While there is an element of uncertainty in all forecasting, the Irish Department of Finance is amongst the worst at this inexact science.
These points are important in terms of the reputation of the Department of Finance. The myth of Finance suggests a rigorous Department, keenly focused on controlling public expenditure. The international and domestic evaluations paint a very contradictory picture to the conventional wisdom of Finance. The Department of Finance seems lax in its approach to budgetary predictions, particularly multi-annual budgetary projections and targets, and control of spending outcomes, despite their overwhelming fixation with control of the expenditure process.
The final aspect of the role of a Department of Finance is financial policy. Traditionally, this area has been delegated to the Central Bank (and the Irish Financial Service Regulatory Authority). This delegation has not always worked and has resulted in unclear lines of responsibility. A good example was the evasion of DIRT. The Department of Finance claimed the issue should have been dealt with via exchange controls (i.e. the Central Bank was responsible) while the Central Bank claimed that it was a taxation matter (i.e. the Department of Finance and the Revenue Commissioners were responsible).
Of all other policy areas, this is the one where the Irish Department has been subject to the greatest criticisms. Financial policy has been marred by scandals for many decades. The small size of the financial sector in early decades mitigated the need for a developed financial policy. As the financial sector expanded, policy and regulation have tended to lag. Scandals in relation to DIRT, the collapse of ICI and the more recent banking crisis are glaring flaws in the management of financial policy.
Inadequate performance is a growing theme in public coverage of the Department of Finance since the 2008 financial crisis. There are big questions to be addressed in the Department of Finance. The first must be whether the Department should have, or has the capacity, to achieve the broad objectives which it sets for itself. Despite, their institutional pride and view of themselves as superior, the evidence does not support this.
The Irish Times reports that Fianna Fail is completing a submission to feed into the Government’s promised White Paper on local government reform. The report indicates that there is some disagreement among the Coalition partners as to the importance of mayors with Fianna Fail preferring less executive powers. There is also some discussion on amalgamating local councils to create some metropolitan councils. There is no mention, however, of real local government reform which many believe is necessary condition for change in Irish political culture. The report does not appear to be online so it may be that there are more radial proposals than those highlighted here.
Strong stuff from Elaine Byrne and Fintan O’Toole in today’s Irish Times. The latter berates the Irish people for lacking the ‘political viagra’ necessary to push through true political reform; whereas the former throws a punch directly at blogs such as this for ‘pouring cold water’ on the question of fundamental constitutional overhaul.
Fair points? Perhaps, yes. As the previous posting (on last weekend’s UCD Law conference) observed, there are differing views in the wider academic community about whether we need change and, if so, just how much change.
I am of the view that major change is, indeed, needed as part of the general process of renewal, of making a fresh start. I know that this view is shared by some of the other colleagues who make regular postings to this blog. But perhaps we now need to express these views more forthrightly? Perhaps we need to tease out more precisely where we all stand?
David Gwynn Morgan makes the argument in today’s Irish Times that the current judicial appointments process is too loose and open to charges of party patronage.
Given the law-making functions that judges effectively exercise, should the Oireachtas have a role in judicial appointments, if only to act as a counterweight to the government? Would it be desirable to have public hearings in a joint committee where the judge would outline their legal and maybe even political philosophy?
Yesterday’s conference on constitutional reform brought together lawyers, political scientists and economists to discuss the question whther Ireland needs constitutional reform. Though the only media coverage of the even related to Michael McDowell ‘slamming’ the media, a much more interesting conclusion emerged. There was a surprising consensus on the answer to the question set – no.
While most speakers agreed that the constitution is not perfect, most agreed that the constitution was not the proximate cause of the current economic crisis and the policy failures that led to it – though some of us argued that the political system can be blamed for those policy failures. In recent months many political leaders have called for radical changes and seem to indicate that under a new constitution these policy failures would not have happened. To be fair to those calling for reform, most are not setting out specific changes they want but indicating that they’d like a debate on changes. Stephen Kinsella pointed out that economic bubbles have been happening for centuries under all types of regimes and that it might have more to do with human nature than specific constitutional forms.
Nearly all the speakers referred to the high possibility of unintended consequences of constitutional change and the audience was reminded that a new constitution, as many politicians are calling for, might lead to us to have to cast aside case law that gives our current document a degree of predictability. Under a completely new document the judiciary might have a much more free rein to make law.
Some speakers spoke about specific reforms, such as the proposal to have an explicit article on children’s rights. As well as pointing out that children’s rights are already protected under the current document, Oran Doyle pointed out that a new explicit right would have to mean that judges have the right to determine what’s in a child’s interests, and there might not be the reasonable starting assumption that parents have the interests of the child at heart.
David Farrell reiterated the point we’re generally agreed on at this site, that electoral reform is neither necessary nor desirable, and that any change may lead to a more emasculated parliament because of the likely increased power of party leaders. I argued that we could separate government and legislature and create a class of parliamentarians if we made the Dáil much more independent of the government, by 1. rewriting the standing orders to remove the executive dominance and 2. allowing ministers to be chosen from outside the Oireachtas and forcing ministers to resign their seats if made ministers.
The general consensus one would have come away with was that while reform is necessary and welcome, one should proceed cautiously when dealing with the constitution. Radical and potentially effective reforms such as the setting up of a independent economic forecasting agency, or a strengthened C&AG that evaluated policy might achieve more, and more easily.
In today’s Irish Times (http://bit.ly/azsuil) Labour leader, Eamon Gilmore provides more detail about his proposal for a Constitutional Convention:
“Labour’s proposal is that we should convene a 30-member constitutional convention with an open mandate. Ten of its members would be drawn from the Oireachtas, 10 from non-governmental associations and organisations, and 10 ordinary citizens selected rather as we select jurors today. Its mandate would be to review the Constitution and draft a new one within a year. Much of its work would be in working groups and much of that would be carried out online. The convention’s proceedings would be accessible online with the possibility for citizens to comment and make suggestions. The convention would submit its proposed constitution for adoption by the Oireachtas, and once approved, it would then be submitted to the people in a referendum. The aim would be a referendum which would take place in conjunction with the centenary of the 1916 Rising.”
There is much to welcome here — not least the fact that one of the country’s leading politicians is now leading the charge for full scale reform (which, together with Fine Gael’s New Politics document, bodes well for the possibility that serious reform might now happen).
I do, however, have a number of reservations about the details of this initiative, among them:
1.) The proposal that the Constitutional Convention should submit its report to the Oireachtas for its approval prior to a referendum being called builds in an inappropriate gate-keeping role for TDs (and Senators), the very people who are most likely to want to dilute any changes that might affect them. The beauty of the Citizens’ Assembly model (dealt with in previous postings on this site) as applied in British Columbia and Ontario was that in neither case was the parliament consulted on the details of the proposals prior to the referendum; the political elite were specifically kept out of the loop for the very reason that this citizen-inspired initiative should not in any way be seen as highjacked by anyone with a vested interest.
2.) Why the need to link to the 1916 centenary? I can see the symbolic attachment, of course, but the practical and political reality is that this date would mean holding a referendum late in the electoral cycle, by which time the government responsible for initiating it will have used up its political and moral capital (a basic fact of political life). As we all know, referendums can be used by citizens as a means of kicking governments, as mid-term tests: i.e. the vote can often be about something other than the actual issue being voted upon. The best way to minimize that risk is to try and hold the referendum as early as possible in the government’s term. I guess an alternative option — if the desire is to keep with the 1916 date — might be to have an election to coincide, but this would require political altruism by the parties in government of a scale never before witnessed in Irish politics.
3.) I’m not convinced about the proposed membership of the Constitutional Convention. Why the need for 10 members of the Oireachtas? Why so few citizens? Perhaps an alternative might be to have several parallel panels, all feeding into one larger body and each with its one area of responsibility? But certainly, if this is to be seen as a truly citizen-oriented process, then surely there should be no Oireachtas members involved.
Posted by Dan O’Brien
Electoral systems are like exchange rate regimes – none is perfect and all have downsides. I have not suggested that changing Ireland’s system is a panacea, but rather that it, and the making more normal the way the executive is formed, would be the two biggest steps in improving the effectiveness of government in Ireland.
Mixed member proportional systems, such as those in Germany and New Zealand, have single seat constituencies (elected on a FPTP basis) and (closed) national lists which ensure proportionality. I am not suggesting the first part.
I propose keeping multimember constituencies and keeping STV for them (which would not mean all these seats going to FF and FG or a number of other consequences you suggest). The only change in this aspect would be that the constituencies would be roughly twice the size, as they would return, in total, only 83 TDs. This would have the additional benefit of further reducing excessive localism as each TD would need a higher quota and would therefore need to appeal to a larger number of voters (let me be clear here: it is all about trying to get a balance between local and national focus, and not about being hostile to local focus).
As for the national list, I would suggest a closed list. I don’t see the need for this to be linked to the other half, to ensure perfect proportionality, although it could be.
Parties would have an incentive to make the list as attractive as possible and to avoid putting cronies on it. Neither Germany nor New Zealand has any real problem with parliaments packed with cronies. In addition, Ireland’s political parties appear to be trusted by voters – their pecking order in seat numbers hasn’t changed since the1930s, the longest such period of stability in any democracy – so why should there be such fear of trusting them with lists?
There is the wider issue of the relationship between political institutions and government effectiveness. As readers of this site know, there is a vast body of literature on this (as it happens UCD’s Sebastian Dellepiane-Avellaneda, has a nice review article of the literature in the January issue of the British Journal of Political Science). But the literature has focused on differences between developed and developing countries rather than the smaller differences among developed countries. There is an absence of comparative work on the relationship between electoral systems on the one hand and, on the other, parliamentarians’ calibre, how they use their time and legislative output. Despite this, it seems as if political scientists in Ireland mostly support retaining the STV because they believe it to be at least as good as other systems. If this is the case why have the dozens of countries that have considered its merits over decades not opted for it?