Month: October 2010

Regulating knowledge monopolies

I have a post on VoxEU (backed up by a paper) on the regulation of knowledge monopolies in general and the IPCC in particular.

Other countries have carefully prepared their positions for next week’s meeting in Busan. The Netherlands will call for substantial reform of the IPCC along the lines of the IAC and PBL reports. The United Kingdom will not call for Pachauri’s resignation as cordial relationships with India are deemed more important than effective leadership of the IPCC. I was met with a stunned silence when I recently asked two senior civil servants about the Busan position of Ireland, the Country That Leads The World in the Fight Against Climate Change.

We are used to thinking about market structures for goods and services, and there is a considerable body of theoretical and empirical work on how to keep market power in check. Policy advice is a service too, and relying on a single source of knowledge can have detrimental effects. The IPCC is one example, but there are examples closer to home too.

Meanwhile, Brian Lenihan wishes there was a single source of advice, and again. Cosy groupthink was one of the things that got the Irish economy into the current mess.

More on Ireland from the FT

There is a long analysis piece by David Gardner and John Murray Brown: you can read it here.

Wolfgang Munchau is gloomy about Ireland in this article.

Chelsea Billionaire Upset About Losing on INBS Subdebt

A regular source of debate on this website has been the question of who exactly holds the subdebt of insolvent Irish financial institutions. Widow and orphan funds? Credit unions?

How about Russian billionaires who own English football clubs?

Oct 1 (Reuters) – Russian billionaire Roman Abramovich may take legal action against the Irish government over its decision to make subordinated bondholders in Irish Nationwide (INBS) [IRNBS.UL] pay part of the bill for dealing with the building society’s huge property losses.

“We urge Irish authorities to re-consider their position on INBS subordinated bonds and come out with a detailed plan on what is going to happen to this institution,” a statement from Abramovich’s investment vehicle Millhouse said in a statement.

“In the meantime, we are fully prepared to vigorously defend our position using all possible legal means.”

I’m sure all right-thinking people will be wishing Roman well in his quest to take money from Irish taxpayers to free up extra funds for him to spend on Frank Lampard’s wages.

Submission to An Bord Strip

We made a submission to the Review Group on State Assets and Liabilities.

We argue for privatisation of everything that is not a natural monopoly, but not without proper regulation first. We also say that the government should stop giving away intangible assets. We cast the net a bit wider than the interim mandate of An Bord Strip.

Submission to waste consultation

We made a submission to the public consultations on waste policy. It refers back to our earlier work.

The proposed waste policy is roughly equal to the Eunomia report (available on the consultation site), ignoring all the critique raised. Our submission therefore just repeats points made earlier. We also emphasize the procedural lapses in policy formulation.

Here’s our conclusion:

Waste policy development in Ireland is essentially on hold. In the past three years there have been a number of consultations, but, by and large, no definitive decisions by government. The development of waste policy in Ireland appears to have imposed costs with no discernable benefits in terms of policy development. It is a
case study in how not to go about consultation. Instead of being driven by a desire to set and meet environmental goals in a cost-effective manner, the proposals are to a considerable extent based on a predetermined view that incineration, especially large incinerators, should be discouraged but with no coherent economic or environmental rationale as to why policy should have as its goal this technology-specific bias. It is not supported by the government’s own international review.

Submissions received by the DoEHLG in this area have neither been published nor responded to, even where there has been ample opportunity and time to do so. There is no sign that this paralysis will come to an end shortly. The Draft Waste Statement promises that there will be an RIA undertaken as part of “further significant consultation and engagement”. This is likely to defer any decisions until 2011 and beyond. The reputational damage to Ireland, which is likely to spread to sectors of the economy beyond waste, as well as the likely failure to reach landfill targets in 2013 and 2016, is something that should not be contemplated lightly. It is somewhat ironic that a Draft Waste Statement that talks about sustainability and moving away from landfill may well end producing a less sustainable policy and more extensive use of landfill than anticipated.