Olli Rehn’s proverbial kick up the behind

Posted by Elaine Byrne

Will Oli Rehn’s call for long-term Irish economic planning at long last give the government the proverbial kick up the behind to get the Irish decision making process in order?

The short-termism that dominates Irish decision making was best demonstrated by the myopic and stupid decision in 1977 to abolish rates which has ever since undermined local government capability. I have written before how policy debate in Ireland involves whipping up emotions rather than cogent debate.

The OECD have continuously criticised Ireland for not fully introducing regulatory impact analysis (RIA) into decision making processes. RIA’s deter the crisis-led approach or kite-flying that characterises how decisions tend to be made in Ireland. Instead we we need to embrace evidence-based policymaking which allows for a systematic early consideration of the benefits, costs and compliance issues of new legislation. Effective public sector reform would open up decision-making to interested stakeholders and the wider public rather than our traditional Civil Service-led policy approach. For outline on how RIA’s work, see here:

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14 thoughts on “Olli Rehn’s proverbial kick up the behind

  1. Personally, I’m disgusted that RTe reported this idea of long term budgetary planning as if it was new to Ireland when in fact Richard Bruton had outlined the idea in detail in the context of shifting away from this big bang of a budget day towards multi-annual budgets and a proper consultative process as part of a budgetary process instead of just a budget day a good number of years ago long before the crisis of 2007/8 started. But I guess this sort of thing is news to RTe and thus it is presented as radically new to the public who least face it aren’t policy wonks.

    This is part of the problem with the political situation that the media do no research and have a memory capacity that would embarrass the dimwitted goldfish.

    Capping this was another report on RTe news tonight about penalties for landlords who don’t give people their rents back. That sort of thing has been announced about every 18 months to two years for a decade at this point but each time it’s treated as if it is new and is actually going to happen. At no stage was the junior minister Michael Finneran challenged on why the previous announcements had lead to nothing happening.

  2. Anyone interested in the RIA system would do well to look at the response to a series of PQs back in December 2008 on how the system operates.

    http://www.kildarestreet.com/search/?s=section%3Awrans+%22regulatory+impact+analysis%22&pid=267

    As you’ll see if you go through the detail of the answers, the practice surrounding RIAs is fairly erratic – some bills are inexplicably excluded most obviously the Employment Compliance Bill at the time which will clearly (if it ever gets through committee) impost a significant regulatory burden on employers.

    • Even when they are carried out, they are often pretty amateurish. In fact RIAs are not what is needed – these were invented as a ‘minimise the impact of government regulation on business’ exercise, and is treated as a box-ticking exercise. What is needed is a Policy Impact Assessment, where government must set out what it thinks the impact of the policy will be, how much it will costs, what effects it should have after 6 months, 12 months, two years, five years etc. Then it will be easier to judge the success of a policy and government will be forced to be much more careful in the way it introduces legislation.

      • They are amateurish Eoin because we have never done them correctly in Ireland. They are extremely successful in other countries.

        The premise of a RIA is the same as a Policy Impact Assessment. If the shortcomings of our current crisis are a failure within policy-making, then one would assume, that as a matter of urgency, this would be corrected by putting into place structures which address this.
        Apart from TASC, interest groups and various academic outputs, political parties have limited opportunities to draw on evidence based research which would contribute to policy making. Perhaps one way of addressing this is to establish an independent think tank, which could draw upon many of those well trained (but for the most part unemployed or about to emigrate) PhD researchers.

        Such an organisation could be funded by using existing funds already disbursed to political parties for research purposes. On that note, I would like to see a cost-benefit analysis of money spent by each political party on research since exchequer funding was allocated to them for that purpose under the 1997 Electoral Act.

  3. Thank you for that link John.

    As I understood it, the point of a well executed RIA is to eliminate excessive regulatory burdens on employers by identifying unnecessary regulatory duplication. This is turn introduces inclusiveness, transparency and public scrutiny into the legislative process ensures that we put our best policy foot forward. Higher-quality regulation is a win-win situation. It instigates red tape on red tape, cutting down on wasteful bureaucracy.

    The Canadian and British regulatory system http://www.regulation.gc.ca and http://www.berr.gov.uk are regarded as model international good practice.
    I’ve asked a RIA expert from another jurisdiction to offer his comments on this post and perhaps he will outline how the attributes of such a process will benefit and promote long-term decision making.

  4. We could couple this effort with a crowd sourcing of the citizen proofing of the legislation where actual people (pseudonymous if they liked) could ask proper questions of what the impact would be on them or those like them of legislation by giving details about themselves and how they thought it might work. We pass too much legislation that hasn’t been tested against reality, the ban on any under 16s in any licenses premises after 9pm leading to the curb on youth discos in sports clubs during the holidays being one example. The solution, from the minister for Justice himself, have the Gardai just ignore the law!

    Let the public in to outline scenarios where the legislation might fail, use the capacity that exists to make the law more robust and considered.

  5. ~I tend to agree with Eoin. Policy Impact Anlaysis is crucial and very often ignored. Policymakers need to think through what the outcomes (and indeed outputs) of their decisions are for citizens and for broader policy objectives over the short to long term. Also agree with Elaine that we need to embrace evidence-based policymaking but unless it is far wider than merely allowing for a systematic early consideration of the benefits, costs and compliance issues of new legislation, it is missing an opportunity. It may be owrth remembering that RIAs as used here were conceived in the days of light touch regulation.

  6. I have just seen Elaine’s reply calling for the establishment of an independent think tank. I would like to add my voice to taht, set up in the right way it could be an excellent innovation.

  7. In relation to Elaine’s comments above about political research and the need for an independent think tank, the Oireachtas Library Research facility is in its design very close to what I think you are envisage. A non-partisan, independent resource providing research for members of the Oireachtas.

    With regard to the comments about RIA’s, its about two years since I looked at them, but the approach to them seemed very dependent on the department. Despite the Taoiseach’s department (if memory serves) having a role in overseeing the whole agenda, there seemed to be a complete absence of consistency in their usage, never mind their implementation across government.

  8. Oh please, not another quango type beast. The problem with these impact assessments – and that includes Canadian or British perceived ‘best practice’ ones – is that they are performed by some part of the government machine. I’ve seen a few woeful ones in my time. It would be far better to resource and empower Oireachtas Cttees to retain the expertise and capability to give all government-initiated policy proposals a thorough going-over – and for them to have a US style permanent investigation sub-committee of the General Affairs Cttee with the necessary sleuths attached.

  9. NESC is an effectively independent body which has been charged with producing regular macro-political reviews. Brigid Laffan’s critique of the work of herself and her colleagues on the board which she delivered at McGill was devastating. The political and economic consensus which preceded the bust was very wide indeed and there is no credible indication that more independent reviews would have stopped the core thrust of policy.

    Let’s also not forget that all three of the major parties produced manifestos based on similar growth assumptions for the economy – with Richard Bruton a leader in those arguing for further cuts in taxation.

    We’re in the middle of an enormous crisis and the alternative government refuses to have discussions about a programme until after an election when there is no time and no chance of having to be specific with the public.

    You get short-term policymaking when the electorate, interest groups and media all operate in a short-term mindset. The political response to these is entirely rational.

    Good RIA’s would be nice, but how would they play in the Dail or on the nightly news (or indeed on Liveline)?

    • “Let’s also not forget that all three of the major parties produced manifestos based on similar growth assumptions for the economy – with Richard Bruton a leader in those arguing for further cuts in taxation.”

      Those were party manifesto assumptions based on the figures supplied by the civil servants in the department of Finance, are you suggest the parties should employ their own equivalently sized financial departments to act as information sources and how would they get access to tax and current expenditure data I wonder?

      The parties did argue for reductions in tax on the premise that growth was going to continue, no one said that we should cut taxation if there was a downturn. And it is also the case that the parties had different tax areas that they felt should be the focus of reform. FF proposed the halving of PRSI from 4 to 2!

      “We’re in the middle of an enormous crisis and the alternative government refuses to have discussions about a programme until after an election when there is no time and no chance of having to be specific with the public.”

      I’m not aware that the opposition parties are refusing to outline their programmes in advance of an election, they’re simply not doing it before the government reveals in full the state of the public finances. As for any discussions that might take place as to a coalition surely that has to be on the basis of which party has the larger mandate from the electorate.

      but this is all off the main point which would appear to me to be that decisions are made without the range of potential consequences being thought through and without anyone taking responsibility for any problems that might arise from them.

  10. This is not intended as a partisan exchange.

    Actually, the 2007 projections of the parties were based on consensus estimates not those of the DoF and this, as Brigid Laffan pointed out, is the problem. Warnings were noted by bodies such as NESC and then ignored when it came to the business of concrete projections and policy recommendations. As things stand, RIAs would just be nice background material for ploughing ahead with the consensus of the moment.

    As an aside, while it is now de rigour to beat up on Finance, they were very rarely significantly different on macro projections from independent forecasters. We have a rapid expansion which they struggled and clearly failed to fully understand – which can be said for many others too.

    Evidence-based policy making is indeed much to be desired, but let’s also realise that the tendency here is to accept only the evidence which supports the consensus or avoids conflict with interest groups. Teachers, nurses and other powerful public sector interests have been especially good at cherry-picking evidence – often aided and abetted by an academic community either eager not to have a fight or ideologically predisposed to not looking for conflicting evidence (re nurse numbers or class size for example).

    Re the alternative government – FG & Lab know they will be in government together at some point soon. Before the 2007 election they agreed a common fiscal framework and set of priorities. Wouldn’t it be in the national interest for them to do the same now?

  11. This issue needs to be addressed from a different angle. Fianna Fáil is not a policy driven party (whether or not the others have policies you agree with isn’t the point) so it is simply incomprehensible to image a single FF person, be they in the cabinet or a civil servant, making a decision along policy lines. It’s like asking a carpenter to build a high performance sports car. They just don’t have the ability.

    Fianna Fáil’s evoltion in terms of governance stopped in 1979.

    There is also no acceptance that the situation in Ireland is now so out of control that it calls for an entirely new way of thinking. I don’t think there is a single person in the Oireacthas who can provide that.

    Is the civil service capable of running things honestly and properly after – give or take – 25 years of FF government?

    It simply beggars belief that Fine Gael and Labour are not allowed free access to the Dept of Finance and that they still have to base their policies on 3rd party info from the likes of the flawed ESRI.

    The civil service must be riddled with cronies from FF who will simply not be able to provide the sort of professional and impartiality the new government will need. We also need a sort of de-Fianna Fáilisation of the public sector – all the middle managers reeducated and the resignations of the top brass accepted enmasse – there isn’t a single area of the civil service that can be considered best practice.

    If SWOT and RIAs are to be implemented and run professionally and correctly – a whole new class of person needs to be doing it – I’m sure there are plenty in the 450,000 unemployed who can replace those let go and will go for less.

    Changing a career in the public sector from one of greed to one of service needs to be entrenched.

    Will a FG/L government with the largest majority in the history of the state prove to be less corrupt than what went before? We can only hope.

    People emote when they vote, there is little evidence FG or L understand the scale of reform needed – the policies from FG don’t go anywhere near far enough.

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