Public Policymaking and the Marketplace for Ideas

In a recent speech to a conference on “Transforming Public Services”, I argued that official policy-advice and decision-making processes are overly secretive and cartelised and that increased transparency and contestability would yield superior outcomes.  Good ideas would have a greater chance of driving out bad ones and the possibilities for interest-group and regulatory capture would be reduced. The paper argues for:

– clearer lines of demarcation between expert policy advice and political decision making

– a US-style Council of Economic Advisors, to allow a greater diversity of competing voices and an increased likelihood of resignations if political decisions went grossly against expert advice

– a further loosening of the traditional doctrine of “the corporation sole”, which obfuscates the assignment of responsibility

– a radically reformed and better resourced Oireachtas committee system to enhance oversight of the executive

– a relaxation of the libel laws along the lines of the 1991 Report of the Law Reform Commission (e.g. “that the prosecution should be required to show that the matter was false as well as defamatory”)

– a constitutional rebalancing from rigid protection of the “right to one’s good name” in favour of greater freedom of speech

– extending the powers of the Comptroller and Auditor General to “name and shame”

– mandating the public-sector Top Level Appointments Committee to identify and penalise blame-avoidance motivations

– reconstitution of the Special Group on Public Service Numbers and Expenditure Programmes (“An Bord Snip”) at ten-yearly intervals to check the empire-building instincts of the bureaucracy and reduce agency proliferation, which diffuses blame and helps to avoid difficult decisions.

The full paper is here.

25 thoughts on “Public Policymaking and the Marketplace for Ideas”

  1. I don’t think a Special Group meeting at 10 yearly intervals would do as a lot of damage gets done in the meantime and its also harder to undo things if they have been going on for a while. So continuous independent monitoring of public expenditure is required perhaps along the lines of the UK’s Audit Commission which has more than a conventional “audit” function.
    A CEA would be a good idea but I would expect huge opposition to it from policy makers.

  2. @KD

    could not agree more.

    10 year interval would be way too long particularily given our spectacular fall from grace over the last 24 months

  3. @Frank,

    Many thanks for this post and the link to your excellent paper. Following on from the discussion in the previous thread I think it would be great if your set of recommendations could be developed/refined/expanded/amended through engagement and debate to generate a set that would attract broad academic and practitioner support. One paper, however insightful it may be, is unlikely to change the “terms of trade”; a worked-up position with broad support might encourage the political classes to begin some engagement.

  4. Frank,

    Rather than baby steps, why not have full public spending transparency, with limited exceptions such as FDI grants, with a goal to have all public spending eventually online.

    Several US states have introduced Transparency Acts and in 2006, then Senator Obama, co-sponsored a Bill to put federal contracts online.
    What public interest is served by the biggest procurer of goods and services in the State maintaining secrecy on its contracts?

    Does it promote competition and give a chance to start-ups, competing against insiders who for example know how valuable a much sought after ticket to a sport’s event can be?

    The FOI process and PQs is hardly a credible system. Besides, it’s clear that the Dept of Finance hasn’t a full picture on public spending itself, in the current set-up.

    Sweeping away Edwardian cobwebs in Government Buildings is bound to have a big impact.

    Any other changes would likely meet with little resistance after radical reform…radical would be a departure indeed in conservative Ireland..

  5. @Frank Barry
    All of your ideas are excellent. As Paul Hunt observed we need a forum on the future of the country. To your list I would add severe anti-corruption legislation and mechanisms to enforce it as a necessity. Until we see ministers in handcuffs we will know that nothing has changed.
    The last FF austerity cabinet in 1987 contained the following ethically challenged individuals: Haughey, Burke, Flynn and Ahern. Given the vastly greater opportunities for graft in the celtic tiger era we can assume that almost all of the thirteen non-Green members are to various degrees ethically challenged. If we knew now what we will know in a few years time, let alone what we would find out if there was a thorough investigation, it is likely that most of the present members of the Cabinet would be in jail – not making decisions on the future of the country.

    @Michael Hennigan
    We can see now why the establishment hate FOI so much. It is effectively the only check on their corruption.

  6. @E65Bn plus interest and NO extra lending!

    I appreciate your support, but a witchhunt – however gratifying the outcome might be – won’t move things forward. Indeed it is likley to close off any possibility of the necessary politcial engagement. I’m not saying we should ignore the back catalogue of economic illiteracy and soft corruption, but it may be sufficient for the people to pass judgement at the next general election.

    In the context of this blog my focus, as I’ve stated previously, is on the design, scrutiny, amendment, implementation and review of policy – in particular economic policy. There is an opportunity now to implement both institutional and procedural reforms so that the next government, and its successors, will be forced to play by rules that are demonstrably in the public interest – and that will minimise the possibility of a repitition of the largely self-inflicted economic pain currently being experienced.

    Niamh Hardiman and, now, Frank Barry have made an excellent start. It is necessary to build the momentum.

  7. @Frank Barry
    It is heartening to see the growing groundswell of opinion against NAMA as is. Davis McWilliams has long been against it but now we also see it being opposed by Matt Cooper:

    “While Nama seemed to be a clever idea when introduced, swapping bank loans for state bonds that could be presented to the ECB in exchange for cash, it is not going to work now. A year has been wasted, during which the banks could have been nationalised and real work started on dealing with their problem debts. It would be politically difficult for Brian Lenihan to admit now that Nama can’t work but his, and more importantly the state’s, long-term reputation would be damaged less by admitting to honourable failure.”

    http://www.timesonline.co.uk/tol/news/world/ireland/article6945781.ece

    Both McWilliams and Cooper spoke well on TV last night. Conor Lenihan, appearing on The Front Line programme with McWilliams, must have been delighted that instead of having to defend cutting the blind to protect the insured bondholders the public versus private battle kicked off again. The FF strategy of divide and rule has succeeded beyond their wildest dreams.

    Colm McCarthy too is now indicating opposition to the government’s cover up and bail out banking strategy, as well as its refusal to touch the insured bondholders.
    http://www.thepost.ie/commentandanalysis/we-need-to-know-the-cost-of-sorting-out-the-banks-46195.html

    “The exchequer costs of the bank rescue need to be minimised ruthlessly, and any opportunities to impose cost on bond-holders exploited in full when the guarantee runs out in September next year. Compensating providers of risk capital to failing businesses infuriates taxpayers, and gives capitalism a bad name.”

    “The public are entitled to a thorough and public investigation into what went wrong.”

    I would be very sceptical about waiting until September next year though. At that stage we will be told that if we don’t continue the guarantee we will
    turn into Iceland etc etc. If Lenihan wants to prove his bona fides he should take the bondholders on NOW. He showed vigour and urgency when attacking, “office cleaners, blind people, carers and children”.
    http://www.irishtimes.com/newspaper/opinion/2009/1215/1224260710702.html

    Let’s see him take on the bondholders with the same gusto.

  8. @Paul Hunt
    The government have shown that they are entirely happy with things as they are. So we have to hope for the opposition to drive change.
    Their slogan should be, “Justice First”. We need honesty in public life. If it takes a little longer to get efficiency than so be it – it will be well worth it.

    Making say, Leo Varadkar, Minister for Justice, and giving him a target of putting most of the current cabinet behind bars should be the first step.
    With FF incapacitated transforming the country will be much easier.
    The question is whether FG, even Labour, want to take down the Irish establishment, as they will be taking down many of their own supporters too?

    None of this stops civil society from drawing up blueprints for the transformation of our nation. It just means that a new government will have to make sure that justice is done and reforms implemented simultaneously.

    It’s not about witch hunts, it’s about justice.

  9. @Frank Barry

    ‘Regulatory Capture’ – great construct – and there does appear to be a lot of it around: Sure Prof. Honohan will take notice.

    On Dail Committees – agree – but one of the few FF-ers to advocate/attempt real institutional change – Noel Dempsey – has failed on most occassions – notwithstanding the fact that ideas were good ones. With present system political patronage and geography trump expertise every time …………

    Increase powers of C&AG – this might be more doable in medium term …

    Transparency – agree – this would require cultural and institutional change that appears almost unthinkable based on evidence from past 90 years or so – dominant logics of main Irish institutions are the direct opposite : control of information, hierarchical, time serving, and conservative.

    Accountability – pls name an Irish Gov minister who resigned over an economic policy decision – or any policy. Long way to go here.

    REGULATORY CAPTURE – sing it from the rooftops – and drop it from the top of the tallest half-finished derelict piece of building folly that we can find – dat neu HQ of Seanie’s Folly springs to mind ………. (and another idea that is probably not transferred from me head through me fingers to this blog until legislation on libel and good name etc is updated! – Dail priviledge how-are-ya?)

  10. @E65Bn plus interest and NO extra lending! Says:

    Most of the present cabinet are already behind bars – public bars – and toasting their success in getting away with it once again – so they took a few coppers of the pint o plain (so they wouldn’t get barred!) and a few billion of the blind and the lame.

  11. @David O’Donnell
    Prof Honohan is a remarkable case. Curiousity alone would have almost anyone else poring through the old files in his office. Not him. Instead he tells us he spends his time wandering around the building winning friends and engaging in a leisurely induction course. It’s as if he is trying to put as much distance as possible between himself and the collapse of our banks. Several floors of a distance if he can.
    http://www.independent.ie/business/irish/tough-at-the-top-but-change-will-come-from-listening-to-the-masses-1947854.html

  12. @Frank B
    We need Irish Times or somebody similar to write an editorial on the concept of regulatory capture. It is absolutely endemic in irish society and perhaps the greatest ill in irish public policy. For all that it is a concept I only met this time last year doing a course on public sector economics and I feel it’s profile needs raising. I’m a recovering statistician and had long since left my ucd economics training behind me but I’m almost sure that my ignorance is not unique. The population need to understand that the special deal for interest group X, however seemingly trivial and inoffensive, is the bad deal for everybody else.

  13. Some weeks ago there was a vehement rejection of any change to the Senate because of its importance in providing a considered viewpoint to what was happening in the Dail. This site has totally eclipsed anything that the Senate has done for as long as I can recall. Thanks and congratulations.
    There may have been a measure of innocence among the site’s founders in expecting that its debates would be highly influential on the bank bailout. The Government ignored the main thrust of the arguments, but they were forced into substantial alterations of their own proposals largely as a result of the quality of the debates here. But the terms were those of the Government establishment.

    You are now re-entering the lists. This time you must cause change to happen.

    As a country we cannot afford to waste a major resource such as this “agora”.

    The most defining characteristics of all the financial and government collapse has been the lack of transparency. Proposals for an economic unit, or regulatory reform, or administration reform are useless without a culture of transparency because of their probable infection from an array of hidden agendas and unknown decision makers. And unfortunately, to me that includes the present opposition. Waiting for national change is soul-destroying.
    This could have wide-ranging implications: in Canada, I am told, anyone drawing more than can$100,000 (c€70,000) is listed on a national database.
    One starts with what one has and one makes that a prototype of what one wants. This site is what we have: make it open.
    Not in the identity of the posters, though that should be encouraged, but in having available for scrutiny its organisers and moderators. How it is funded.
    All politics is local and if there is to be change then that has to be local. So one needs to know where the site is capable of having an impact. Have its statistics available: a map showing where its contributors are; a map showing where its ‘hits’ are coming from.
    We are what we do, not what we say we do. If we are talking transparency, be transparent oneself.
    If it were not for its subject; how the economics of this country has been destroyed, this site would be one of the most enjoyable public education sites anywhere. Because we cared deeply about what had happened.
    Can we build on the ethos of the site to develop a ‘how’ of getting systemic change?

  14. Liberalising the libel laws is fine but I wouldn’t go as far as putting the burden on the plaintiff to prove that the alleged libel is false – proving a negative is hard. But if the newspaper can prove bona fides etc then they should be protected even if they get it wrong.

  15. Run every department on the internet.

    Exempt only some things and only for the minimum amount of time. All phone calls through dragon dictate etc and all meetings likewise.

    What is there to hide? It is our money…..

  16. a US-style Council of Economic Advisors, to allow a greater diversity of competing voices and an increased likelihood of resignations if political decisions went grossly against expert advice

    Yes, because the most important thing that the country needs right now is installing yet more free-market ideologues to tell the rest of us what to do – the last ten years having turned out so well at the end.

  17. @Conor

    “This site has totally eclipsed anything that the Senate has done for as long as I can recall. Thanks and congratulations.”

    Whereas I have some understanding of why you might make the point I think it is somewhat delusional. The site is useful in terms of making the opinion of some academic economists available (largely of a particular economic view)and for providing information.
    The debate that takes place is, however, soundbite communication, with no verification of identities or validation of the honesty of positions posited. Its influence is, I would suggest limited in terms of directly influencing policy. Its long term impact as a tool of education may be slightly more significant.

    I welcome all debate and discourse and sources of information but lets not loose the run of ourselves.

    On a more general point in relation to the discussion, here and on another thread, about reform of policy making and institutional reform, let us not forget the underlying issue of democracy and legitimacy in making reform proposals.

  18. @Michael Hennigan
    “Rather than baby steps, why not have full public spending transparency, with limited exceptions such as FDI grants, with a goal to have all public spending eventually online.”

    Why make an exception of FDI grants?

    For years, IDA (when it was one organization) published these details, as a matter of routine, as part of it Annual Reports.
    Subject to checking the reports, memory says that the details given covered
    1) each grant paid to each company during the year being reported
    2) the type of grant eg. Re-Equipment, New Industry, Small Industry, R&D, Feasibility Study, Service Industry
    3) the total amount approved to each firm under the particular grant programme
    4) the total amount paid to date under each grant programme.

    Over the years, we have lost a lot.

  19. @ George,
    I submitted an article based on this material to the Irish Times a couple of weeks ago and they didn’t seem to find it of sufficient interest to publish it! It is particularly frustrating that they never give a reason for rejection (or even tell you that it’s rejected).

    @ Conor O’Brien,
    Re openness of the site, I’ve passed your suggestions on. But details of contributors are available under the “contributors” heading on the right-hand side of the page.

  20. While I accept that I may seem somewhat delusional to you, it may also be that I see a different reality to you.
    As you say the site is useful in making the opinions of some academic economists available. However there also seems to be people who are involved in construction, in the financial markets, ex civil servants and at least two farmers. All of whom seem quite confident in teasing out the ideas of the academics. For all I know there may well be current civil servants commenting as well, but as you know they are precluded from public stances on issues of policy.
    Philip Lane kindly directed me to what was under my nose and I will use the details from the sitemeter to suggest that the site is more than being a forum for some “academic economists”
    The locations for the last 100 viewers range from a substantial number in Dublin to Wexford, Cork, Roscommon, Mayo, Greece, Belgium, Australia, New York, and the UK. I could not find any Chinese involvement though that may have been because of the time difference. Let sleeping Chinamen lie.
    While I would prefer to have no anonymity this is not always possible. Nevertheless it is possible to take a view on a posters rationales and motives after a reasonable number of posts.
    I understand sound bites to be succinct pieces of opinion, generally from politicians which are usually intended to escape immediate challenge. Everything here is open to challenge and as far as I can recall each thread has been opened by a significant opinion piece or a link to one by a named author.
    I accept your point that its influence has been limited in directly influencing policy. I understood that the point of the thread was how increased transparence for citizens could be achieved.
    “official policy-advice and decision-making processes are overly secretive and cartelised and that increased transparency and contestability would yield superior outcomes”.
    I agreed with the point and emphasised that transparency like politics is local.
    BTW, what is “the underlying issue of democracy and legitimacy in making reform proposals.”, and how is it deflected by calls for more transparency.

  21. @Frank: on the CEA. I think that the positive side to this is that it would incentivise good economists to get involved in policy debates. Why spend time away from the day job writing stuff on policy if it is going to be completely ignored and will distract you from the activities you are paid to do and which determine your promotion prospects? A CEA would rebalance peoples’ incentives.

    The negative side is that you wonder if it would be possible to keep such a thing serious and apolitical. You can certainly envisage a scenario where it was stuffed with mediocre political hacks of the sort who currently pop up regularly to provide government with ‘expert advice’. Why give such people any extra status?

    If it worked properly, I think one principle should be that it replace peoples’ salaries, but did no more than that, so that if people felt the need to resign and go back to their universities there would be no financial penalty for doing so. This would help keep everyone honest.

  22. In the spirit of promoting discussion on some of Frank Barry’s ideas, I refer back to some work I was involved in from the 1980s on – prompted by the last economic crisis also brought on by bad government.

    In his paper Frank Barry states “The present paper has focused on reforms to the Oireachtas committee system which would be far easier to implement. Extending the investigative and compellability powers of Oireachtas committees and biasing membership and the allocation of chairs towards the Opposition would enhance Oireachtas oversight of the executive, as in the case of the Public Accounts Committee……”

    I suggest that will not work unless the executive side of government is completely separated from the representative side of government, as I argued in 1987 “Need Government Fail?” Business &Finance May 1987 (http://irishpoliticalreform.wordpress.com/resources/donal-obrolchain-paper)
    “Our basis of government
    In our system we, the people, elect a group (Dáil deputies) which in turn, elects a Taoiseach who then picks a smaller group (Cabinet) to govern for a period not greater than five years. We, who as citizens own the authority to govern, pass this authority to successively smaller groups.
    There is only one path to government power in our system. This path must act as a route for the transfer of our democratic power which authorises the government to act. At the same time, this path must also serve to gather the actual know-how needed to carry out the tasks of government. These two aspects may be equated with the distinction between the words “may” and “can”, ie the ability to do something and permission to do it…

    Ministers are always members of the majority grouping in the Dáil. This means that the examining role of the Dáil (as the Representative Branch) is very closely tied to the executive role of the Minister as option-maker. It seems inevitable that one or both roles will suffer from this link as appears to be the case in our present system. For example, Ministers often comment that their reduced poll (even loss of Dáil seat) at general elections results from being too taken up with government affairs to look after their constituencies.”

    Frank’s paper does not propose to do anything about this link. In the last few months, we have seen another Commission on Taxation Report dismissed – apart from the uneven application of a carbon tax. The same thing happened during the 1980s and I referred explicitly to it in “Need Government Fail?”

    “Another example of the effect of this tie is the tax system — which the vast majority agrees on the need for reform. A detailed solution, good or bad, has been put forward by the Commission on Taxation, but nothing seems to be happening. Why? No one really knows and the government system resists giving any indication of the possibilities for change.

    This lack of debate is caused by the link between the Minister for Finance and the majority grouping in the Dáil. Tax reform is not easy and is fraught with pitfalls. If the Minister takes a position, he is certain to upset some party colleagues. In addition, the opposition will highlight all the disadvantages (and none of the advantages!) of any proposal. It is much easier for the Government to suppress the matter by simply side-stepping the proposals which are already on the table.

    Perhaps it was this type of situation that led Montesquieu, a pre-revolutionary French political commentator, to note that “When the legislative and executive powers are united in the same person, there can be no liberty”.

    The tax example shows the tendency to inertia, compounded by secrecy, which is built into the structure of the present government machine. It seems that the work of the elected representative has overwhelmed the executive/managerial function of the option-makers.”

    Frank also refers to another 1980s paper of which I was a joint author – in which we “argued for a shift towards a US-style separation of powers in which the legislature represents a more effective check on the executive. Such systems can easily become gridlocked however, such as when the US Congress in 1995 refused to pass temporary spending measures needed to pay federal workers and fund government programmes.” the full paper is here http://193.120.95.144/politics/design-for-democracy.pdf

    Our 1980s idea
    “In summary, a new form of organisation for the core of the government is proposed. It would consist of two main elements: the Active (Initiating) Branch and the Representative (Moderating) Branch. As in other countries, whose governments are based on the separation of powers, the Judiciary would form a third branch which would oversee the
    relationship between the other two. This arrangement does not reflect the standard view of the separation of the powers. We have emphasised the role of the Active Branch in the initiation of new law — a role which is usually attributed to the representative assembly under the title of ‘legislative branch’.

    In practice, the American concept of ‘partial agency’, which gives each branch the duty to make up for the temporary deficiency of another branch, should be incorporated in any new system. The most important power of interference between the branches would be the right of the assembly to put forward new initiatives and the right of any branch to remove another branch from power under carefully defined circumstances.”

    Gridlock
    Writing our 1980s paper, we were aware of the possibility of gridlock and thus proposed some measures to reduce the possibility. One such measure was to give the executive side equal right to propose legislation. While we did not claim to be complete in coming up with other means of minimising the possibility of gridlock and the possibility of tyranny arising from an over-active or comatose government , we proposed other measures eg.

    “The ultimate power of the Active and Representative Branches over each other would be to force the other to submit to a popular vote in certain circumstances. The resulting election would appoint the members of both branches so that the electorate could make it plain which side it favoured. This would also avoid overhasty resort to this form of test. This power would be a combination of the present ability of the Dáil to dismiss a government by means of a vote of ‘no confidence’, the power of the President to dismiss the Cabinet and the ability of the government of the day to call a general election.

    It is necessary to protect the public from excessive or unjust use of power on one hand and from an inactive government on the other. The permissible circumstances of a dismissal need careful consideration; there should be a procedure which would be explicitly invoked so that the public could be clear about the nature of the disagreement. For example, the Representative Branch might be able to dismiss the Active Branch or a member of the Judiciary by a formal vote with a majority of (say) three-quarters of the house. This would also lead to an election on the same terms as above, or, in the case of the Judiciary, to the appointment of a new judge. “

    In any of these cases the Representative Branch should have a formal opportunity to investigate the circumstances under the This leads us to the view that the Active and Moderating Branches must be legally separated to ensure that the public is always well served. Any transactions between them must be fully public so that proposals are not rejected without public knowledge. The Active Branch would be very much more powerful than the present executive and it would be essential to take steps to prevent any form of executive tyranny. The main requirement here is that all action on the part of this branch which affects the public would have to be subject to veto by the Representative or Moderating Branch. “

    As I have said, we did not claim to cover all the details checks and balances on the exercise of government power. Surely, the US has many examples of how to prevent gridlock and ensure checks/balances on the exercise of government power. Being a federation, I fully expect that there is much experience of doing just that – in practice and in theory!

    Challenge
    I am still convinced that we need to change those articles of our constitution that specify the mechanism of government. In 1996, I made a submission to the All-Party Oireachtas Committee on the Constitution, advocating a complete separation between the Dáil (as the representative branch of government) and the Rialtas (as the executive branch of government) together with some checks and balances eg. constitutional measures covering powers of Dáil committees, Freedom of Information, citizens’ initiative on Swiss lines. Note I also advocated keeping the existing STV for all elections to both branches, but did propose to do away with by-elections. I have not changed my mind on these aspects of how we govern ourselves.

    To get a discussion going, I actually proposed wordings for Articles and clauses covering these aspects. I challenge others to propose similar wordings for those parts of the constitution that they think need change.

    Let me warn anyone who decides to take this challenge that one would not want to hold one’s breath. All I ever got was a letter acknowledging receipt of the submission.

    I offer some quotations that I used to guide my thinking for the 1996 submission.

    “How do we construct a state that provides its people with the power of adapting to the changes that constantly descend upon it? “ Ivor Kenny.

    “Providence never intended to make the management of public affairs a mystery to be comprehended by a few persons of sublime genius. “ Swift

    “Although only a few may originate a policy, we are all able to judge it. “ Pericles of Athens

    “Men in power are short of new ideas; they lack time and the information; and they want to do good as long as they get credit for it. “ Jean Monnet.

    “Ambition must be made to counteract ambition. In framing a government which is to be administered by men over men the great difficulty lies in this: first you must enable the government to control the governed and in the next place, you must oblige it to control itself” Madison

    Plus ça change, plus c’est la meme chose
    Conclusion from Need Government Fail? 1987
    “Our present structure is like a see-saw, with the elected representative function at one end and the Minister/executive role at the other. Any rise in the effectiveness of one implies a drop in the other. A new structure is needed which would cut the tie so that each can be improved without weakening the other equally necessary activity.

    There are very few useful changes that can be made without constitutional amendment to those articles which specify the form of government.

    It would be a pity to waste energy by attempting to fine-tune the 1920’s-based system by, for example, changing the electoral system or restructuring the Senate.

    Without much more effort, we could have a completely new model that will bring us to the year 2000 and beyond, by giving our government system the means to be successful while increasing democratic accountability. Only thus can our skills and energies be mobilised to open the paths to better standards of living and greater justice for all who wish to live and work here.”

    On with the motley!

  23. @Donal O’Brolchain.
    Its too late (and too much of a good night) to read thoroughly, but at first runthrough you make a lot of sense. Tomorrow I will think on it, for what my tuppence is worth.
    Thanks

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