Emigrants, tax rates, and debt

Paul Krugman has an interesting piece here, and I can’t resist posting a link to something similar I wrote back in 2010.

PK’s piece also gives me an excuse to post a link to this piece by Oxford Economic & Social History graduate Christopher Kissane on incentivising emigrants to come home, which makes several good points IMO.

Comments

comments

54 thoughts on “Emigrants, tax rates, and debt”

  1. If one were to try and sum up Portugal’s problems in one word, it would not be the euro, but education, or rather the failure to invest in the latter.

    https://www.bertelsmann-stiftung.de/fileadmin/files/user_upload/policy_brief_The_Portuguese_Economic_Crisis_2015.pdf

    The tenacity of those with an education, and a job, in attempting to hang on to their share of the diminishing national cake, has been truly remarkable.

    http://www.ft.com/intl/cms/s/0/b5c9a802-f48d-11e3-a143-00144feabdc0.html#axzz3uCtHQnpb

    As in the case of Ireland, the country is no stranger to emigration as a result.

    As in the case of Greece, the painful discovery that changing a government does not change the facts of a country’s economic situation is, apparently, sinking home; only faster.

  2. Maybe the West will just end up like Japan with debt to gdp iterating away towards 300% and mostly zombie companies while interest rates stay on the floor.

  3. Maybe the West will just end up like Japan with low or no growth , debt to gdp iterating away towards 300% and mostly zombie companies while interest rates stay on the floor and the Financial sector lives in fairyland.

  4. A careful reading of that Bertelsmann document shows that while Portugal has a history of low investment in education that has resulted in a low stock of education in the working population, it has done a lot since 2000 to remedy the lack of investment. A 10 percentage point increase over 12 years in the percentage of the working age population with tertiary education implies that the share of those newly entering the labour market that have tertiary education must be high.

    Hats off to the Portuguese constitutional court for its commitment to the rule of law.

  5. A more nuanced piece on Portuguese demographics is available here:
    http://www.voxeurop.eu/en/content/article/2364411-will-portuguese-be-extinct-2204
    The conclusion is worth quoting in full:

    A demographic crisis is bad news for all economies. First because a lasting declining trend will lead, in time, if nothing is done, to a total disappearance of the population. This should happen in 2204, according to a simple projection based on: a continued negative migration balance as projected for this year; the expected birth rate; a stable mortality rate; and the same average migration balance as in the past two years. . .

    This is also bad news because the fall in the birth rate and the rise in emigration add to the aging of an already elderly population, with all the consequences that ensue in terms of health care, public spending, productivity and economic growth.

    Unfortunately, this threat, although serious for Portugal, has not been given the attention it deserves by political leaders. This is not a problem due to the [austerity] programme imposed by the Troika [European Commission, International Monetary Fund and European Central Bank]. It is a trend that tends to get worse and that is self-sustaining. A country without inhabitants is a desert – yet, with few exceptions, no one dreams of living in a desert.

  6. @KPR
    re: the equation w(1-t) + b + P = E in your 2010 article.

    I would make the point that the P (the premium we enjoy as a result of living in Ireland) may have a minus value, particularly for young people renting the Dublin.

    From the Kissane article:

    “Tax cuts are a political issue at home in Ireland, and emigrants are being used to score domestic political points for an election in which we will have no votes. ”

    There is no limit to the duplicity or neck of the Irish politician.

    Great article by Kissane.

  7. @DOCM

    The French prime minister does not share your triumphalism.

    “But the Socialist prime minister, Manuel Valls, deliberately avoided any triumphalism and did not claim that the steady rise of the far-right party had been definitively stopped.

    “Tonight there is no relief, no triumphalism, no message of victory,” he said. “The danger of the far right has not been removed – far from it – and I won’t forget the results of the first round and of past elections.” He said it was now the government’s duty to “listen more to the French people” and “to act in a stronger, faster way” particularly on employment in a country with record joblessness. ”

    A significant part of the defeat of Le Pen, has been achieved by the socialists pulling out candidates and /or encouraging their supporters to vote for Sarkozy candidates.

    A stupid move by the left, and a betrayal of the left.

    http://www.theguardian.com/world/2015/dec/13/front-national-fails-to-win-control-of-target-regions-amid-tactical-voting

  8. @ DOCM

    The FN is the equivalent of dogsh## on the carpet of the House of Europe. Without growth there will just be more of it. Fair play to moderate French voters for toning down things but the very fact they got such a vote in Round 1 is extremely worrying.

  9. I wonder about the tradeoff between returned emigrant earnings (extra demand) and increased debt (extra entropy) and whether it can be modelled using a DGSE approach.

  10. A double dose of good news from Paris at the weekend — Vive la France!

    Yes, if Portugal had kept the escudo, the response to the financial crisis would likely have been easier and crucially as a small economy it would likely have had a better outcome overall since 2000 if local policy makers did not have the security of the euro. There would surely have been better economic discipline if the local currency had been retained.

    The standard of governance, culture and the institutional systems in a country, remain key factors in success and failure.

    Populists of right and left get support during periods of crises and in the 1930s Huey Long, governor of Louisiana, who is said to have inspired the Willie Stark character in Robert Penn Warren’s celebrated 1946 novel, ‘All the King’s Men,’ was the most potent threat to the reelection of FDR in 1936. Fortunately for Roosevelt, Long was assassinated in 1935.

    Today, economics that is credible for a lot of voters is a challenge for all these parties. Greece’s SYRIZA this time last year had a wish list but no implementation plans and crucially no response to a worst case scenario, planned for.

    In Venezuela, a thuggish government has wrecked the economy and in Poland, which had an economy as small as Ukraine’s in the early 1990s, has a new conservative government and the Economist notes this week that it “has only just started its vandalism.”

    Portugal had a credit boom before adopting the euro as the central bank cut interest rates and it began it’s membership of the single currency with a trade deficit of 12%. The jobless rate fell to a historical low of 4.8% in Q1 1999.

    This Brookings paper by Ricardo Reis, a Columbia university professor, who is a native of Portugal, notes:

    Between 2000 and 2012, the Portuguese economy grew less than the United States during the Great Depression and less than Japan during its lost decade.

    http://www.brookings.edu/~/media/Projects/BPEA/Spring%202013/2013a_reis.pdf

    Finally, jobs indicators from the US show interesting trends in recent times.

    The employment/population ratio at 59.3% in Nov 2015, compared with 62.3% in Nov 1990 and 64.4% in Nov 2000.

    The US labour participation rate (of the working age population) was at 62.5% in Nov 2015. Apart from the recent 3 months, this is the lowest since 1977 when the participation of women was rising in the workforce.

    The rate was 66% in Dec 2007 at the start of the recession. The fall in the rate has assisted in bringing the narrow jobless rate to 5% and the broad rate to 9.9%.

  11. @DOCM,

    It seems the debate has moved on a little from Seamus Coffey’s post of 10th Dec. on reports on income distribution issues. Thank you for the kind words and links there. I don’t think there’s much dividing our takes on the current economic situation in Ireland. For me this is probably as good as it gets. There will always be incremental improvements in administration; but the pay-offs and the trade-offs at the micro and the macro levels are too deeply embedded. Those who perceive they are being excluded or are actually being excluded have to put up, shut up or or move out. And (in the context of this post), while the nature of out migration has changed beyond all recognition for most Irish citizens and residents, sadly too many choose this option and any political thrust that might shake up the stultifying oppression of the special interest groups is dissipated.

    And again, despite the living memory of most citizens including the episodes of FF running the economy off the rails between 1977 and 1981, of FG and Labour being unable to get it fully back on track and of FF (and selected sidekicks) running it off the rails between 2002 and 2008, the risk of a repeat performance is ever present – with the openness of the economy likely to amplify the severity of the impact of any repeat performance. But we can be sure there will be a next time and the next time will be different. The principal differences will be in terms of how the greed and stupidity will manifest themselves – and how malign or benign the impact of external factors will be.

    The next government is likely to be a politically speckled coalition dominated by FG protecting and advancing the interests of the comfortable, conservative, mutually back-scratching majority of citizens who benefit from the established pay-offs and trade-offs. The urge to throw them out and to go a bit mad will probably manifest itself at the next general election.

    However, the lack of a serious organised challenge to the mainstream parties in Ireland, despite the indicated extent of popular discontent with these parties, should not encourage approval of the current antics of mainstream centre-right or centre-left parties in those countries where such a challenge is being mounted, as in France. The withdrawal of Socialist candidates in at least two of France’s regions encourages justified contempt for the democratic process. Many French voters are perfectly capable of using the FN to give a resounding two-fingers to both of the mainstream parties in the first round of voting and then switching votes in the second round to prevent the FN winning. But when either or both of the mainstream parties continue to ignore the message being communicated by so many voters, then they will fully deserve the electoral kicking they will receive eventually. And we can only hope that the kicking will be solely via the ballot box.

  12. @ Joseph Ryan

    Triumphalism? My comment related solely to the dire predictions of a breakthrough by the FN which I was entirely confident would not happen because I know that France is fundamentally a mature democracy unlike others I could mention. Valls, incidentally, is slipping rapidly in the polls. This is hardly surprising. Predictions of civil war do not sit well in the mouth of a French PM. You will also have noted the huge rise in voter participation in the second round.

    http://tinyurl.com/zyjobsx

    @ PH

    My hope, if not my expectation, is that those sitting in gridlock on the M50 will wake up to the fact that (i) they are part of the new burgeoning economy, not the old (ii) they must avoid participating in the old one where the cards are stacked against them and (iii) organise to do something about it. .

    Incidentally, it is nice to know that the minister in charge of health policy agrees with the senior official responsible for implementing it that there is no policy. Michael O’Leary also agrees and recently publicly nailed the main reason why i.e. there is no effective management because of misplaced union political influence. (I am careful in in my use of the word “misplaced” because in the European world of universal health care, the unions have a very strong but correct role i.e. one which allows management to do its job. This is what they should also aspire to in Ireland).

  13. @ Joseph Ryan

    Among the 34 member countries of the OECD, Ireland has the highest ratio of native-born citizens living abroad. However, it is an outlier in refusing to give them a vote.

    While emigration has been a great safety valve in difficult times as well as a source of funds (GNP was higher than GDP into the 1970s because of remittances), politicians who merit the label poltroon, opt for the status quo rather than have a significant number voting from overseas.

    Globalirish.ie has said that a 2006 study of countries which allow their emigrants to vote included:

    21 African nations
    13 North and South American countries
    15 Asian countries
    6 Pacific countries
    36 European countries.

    Sixty-five of these countries allow for external voting for everyone, while about 25 place restrictions on it, based on such factors as to whether they intend to return permanently or how long they have been away. Citizens in the US can vote no matter how long they stay away, while citizens of Britain are disqualified after fifteen years away.

    Earlier this year what is called a diaspora policy document but which is an informational brochure, was published.

    Global Irish: Ireland’s Diaspora Policy

    https://www.dfa.ie/media/globalirish/global-irish-irelands-diaspora-policy.pdf

    An extension of voting rights to Irish citizens outside the State would be welcomed by many in the diaspora. It would allow them to deepen their engagement with Ireland and to play a more active role in Irish society. It would further the wider goal of enhancing diaspora engagement. However, it would also be challenging to introduce and to manage. A range of issues would arise in this context, including policy, legal and practical issues.

    This is bullshit and what a mealy-mouthed excuse is made for cowardice — there is a passport database with the information on many of the potential voters and how do so many other countries manage?

    17% of Irish-born live overseas; 20% of Irish population foreign-born

    http://www.finfacts.ie/Irish_finance_news/articleDetail.php?17-of-Irish-born-live-overseas-20-of-Irish-population-foreign-born-169

  14. The new left-coalition government in Portugal has just scrapped the teacher-evaluation law introduced by the previous centre-right government. Many commentators have maintained that some sort of evaluation was warranted because of the apparently low quality of education. So a bad start if you think that a much better education system is an urgent requirement for Portugal.

    It turns out that the Constitutional Court has just ruled, quite independently, that the teacher-evaluation scheme was unconstitutional anyhow. But the interesting point is that while the new government says that it will abide by the Eurozone fiscal rules, it will at a more micro level appease public sector interest groups, especially those where leftist unions are strong.

    The anti-evaluation move was lead by the Portuguese Communist Party (PCP), a relatively small party which did not increase its share of the vote in the recent general election. The PCP is a completely unreconstructed Stalinist outfit, never really influenced by the more “liberal” Eurocommuism of the 1980s and 90s. Bear this in mind when looking at the travails of the essentially reasonable and moderate Socialist Party.

  15. @PH
    It will go beyond the ballot box if it does happen. Le Canard has a feature on FN man Christophe Boudet who announced that the would have been a Petainiste in 1940..
    Marion M Le Pen is talking about cutting access to family planning.

    What the PS did was dreadful. At the HQ in Lievin in the Nord Pas de Calais >there was nobody. the party activists were expecting lists of candidates from Paris and they got a slap in the face. Some had been preparing years for this moment.The Local head was invisible and utterly depressed<

    from the Canard.

  16. A thoughtful article by Christopher Kissane, good read.

    I recently read a book by Ms Anne Chambers, on T.K. Whitaker. The book does blow a lot of smoke up TK’s skirt, but it was a insightful read about a most interesting person.

    Coming away from the TK book… one is left with the impression that the country has always been badly managed. Boom to bust to Boom a never ending cycle, inverted Micawberism. At one stage in the 1950’s emigration was so high suggestions were being made for the Republic to rejoin the UK.

    The account of the efforts WRT N.Ireland is interesting. However I cannot help feel that the Irish are NOT very good at managing their own affairs.

    Ireland has serious problems in a number of areas, some of which are

    1) Health services, headlines on yesterdays SBP says it all.

    2) Crime, a justice system which is appearing to be unfit for purpose. I dare say it… but I am of the opinion that there is a cartel in operation, where people with multiple convictions are given very light sentences in the knowledge that they will re-offend again and again. This is proving to be a job creation industry for the Legal profession, milking the taxpayer of money via free legal aid system.

    3) Housing. Despite the demand of a growing population, it is almost unviable to build a house, investors continue to exit the market due to penal taxation measures enforced by the Revenue Commissioners.

    Other problems are Intercountry Adoption…. if you are unfortunate to be infertile…. forget about attempting to effect an adoption internationally. Unless you are able to spend north of 90K euro, and devote 6 years of more of your life to filling out paperwork. Even then there is no guarantee you will be successful in starting a family.

    I personally have serious doubts about the ability of state organisations to put aside Rules and Regulations and instead adopt Professional Judgement and Sanity. The herd mentality which gets Ireland into various disasters has not gone away.

    Personally ….. I do accept there have been some remarkable achievements by the Irish in governing Ireland over the last 90 odd years.

    But successful governance of a nation involves a lot more than luck or hope.

    I am sorry to say it… but I personally will look upon the 2016 celebrations as a shameful episode, nothing to be proud of.

    The more autonomy which is removed from Dail Eireann and given to Brussels the less Tyranny (via appalling mismanagement) the Irish people will be (hopefully) subject to.

  17. @Sporthog

    Some bits of the health service are quite good such as mental health in Connacht but the system as a whole is chaotic.

    I would add planning and management of the financial services industry to your list.

    http://www.youtube.com/watch?feature=player_embedded&v=RbE4ZHIzvTY#

    The record of the treatment of children in the care of the State since 1916 has been appalling.

    http://www.epiconline.ie/research-on-outcomes-for-young-people-leaving-care-in-north-dublin/

    Treatment of whistleblowers in general is appalling

    Tribunals are a waste of time.

    There is no record of what happened on the night of the bank guarantee. Not unusual. Department decisions, reports and plans are not published.
    The culture of secrecy and the assumption that civil servants are there to protect (rather than serve) ministers is a major failing of the Irish system.

    The political system is archaic and badly in need of coherent reform.

  18. For the times that are in it, Michael O’Leary in his own words, at a medical community conference!

    “There’s been talk that the HSE needs a Michael O’Leary… it does. …is that something you’d consider in the future and if you were to find yourself in that position how would you go about changing things? …like most people in this room I think the HSE needs a complete and total revolution and thankfully I’m reasonably young so that I don’t make many demands on the health service but I think what’s fundamentally wrong – and I don’t want to get into ‘how would you run the HSE ti-yadda-ti-ya’ – nothing will succeed in this country if it is run by politicians and what is ultimately wrong with the healthcare system in this country is that the government is trying to run it. There is no effective management within the health service because ultimately the unions that are effectively running the show – and running it particularly badly – are by-passing management every time they’re unhappy by running straight to have a meeting with the minister for health and the minister for … I don’t know why we have a minister for health. Governments should create health policy but implementing and delivering health governments should – as they are in most other pieces of infrastructure, transport, health, they are mostly useless and they are utterly useless at it and this flopping around between regional health board HSEs and then the big national HSE and then we go back to the regional HSEs and by-the-way nobody can lose their jobs so every time you create a new administration there’s a whole new load of bureaucrats to sit in on top of the last load of bureaucrats and none of the bureaucrats do anything or can do anything because the unions when they are unhappy will go straight to the government and the government has no power to tell you or the unions to piss off with themselves. I like the American system, Roosevelt it was in the 1930s said if you are a public sector employee the government can’t withdraw your services so you can’t go on strike. You can’t propose that in Europe because it’s almost up there with pedophilia or something like that suggesting that the public sector employees should not be allowed to go on strike but they shouldn’t. They should have arbitration they should have dispute resolution mechanisms but they should not ever ever ever be allowed to withdraw their labour and if they do the government should sack them and you’d solve most of the public sector problems we have in this country. The healthcare service is ultimately not unlike an airline in that it’s a huge big expensive infrastructure provider and the extent to which it is run is that it’s run largely for the benefits of the producers. So you will have people it could be nurses all the way up to surgeons who will work between the hours of 9 and 6 o’clock in the evening and they’re gone weekends. Everyone should be working on 7 day rosters, everyone should be working on shifts, that’s what we do with our pilots and cabin crew. Now the pilots could be working on 5 days on followed by 4 days off but ultimately it’s about production and how do you keep increasing the level of outputs, how do you keep Hospital theatres full 7 days a week, they’re very expensive pieces of kit so like aircraft they should be full operational 7 days a week. They should be running operations 24 hours a day but it needs to be structured that way and it isn’t structured that way but it will never be structured that way as long as it is run by politicians and the unions can influence the politicians and the politicians are unable to manage the unions. And all of that usually brings a tonne of joy to a presentation here in the medical community…”

  19. @ seafoid,

    Whistle blowers….good point…. truly shameful. It is a indication of how poorly Ireland values the truth.

    Treatment of Children. Children continue to be failed. Rules regulations and procedures come first, reality last. A good example recently is the closure of Arc Adoption due to poor decisions in the Dept of Children and Family affairs. The civil servants who advised the minister Dr J. Reilly will never have to answer for their advice.

    Recent flooding…..the natives in Bandon….. how do they feel? Do they feel that they get good service from state authorities…. given over 6 years have passed since the last floods?

    How will the population (working and resident) of the Dublin Docklands feel when that area is subjected to serious flooding? The much hailed IFSC under a foot of water!!

    What plans are there for a “Liffey Barrier” (similar to the Thames?). Are the authorities aware of the problem which is coming down the tracks?

    For the 21st Century…. the state’s institutions will have to up their performance, fooling all of the people all of the time is not going to work forever.

  20. @ Sporthog

    When it looked as though things would have to be changed back in 2011 the IT ran some fascinating articles that shone light into the darkest corners of how Ireland works. Now that growth is again chirpy there is no need to do anything..

    http://www.irishtimes.com/opinion/broad-review-of-incentives-system-needed-1.600069

    #Some 10 years ago , UCD law lecturer John O’Dowd and I conducted an analysis of why Ireland appeared to be permanently bogged down in tribunals of inquiry while jurisdictions such as the US and the UK managed to complete similar investigations much more rapidly and at far less cost.
    A major factor, we found, was the strength of the Irish constitutional protection of the “right to one’s good name”. This had hindered the Public Accounts Committee’s investigation of the matters behind the arms trial of the early 1970s, and more recently terminated the Oireachtas inquiry into the shooting at Abbeylara. The proposed constitutional amendment will balance the public interest with the right to one’s good name.

    The risk of exposure clearly incentivises better behaviour. Would John O’Donoghue have been as flathúlach with taxpayers’ money if he knew his excesses would ultimately come to light?

    But Oireachtas committees will need expert support if scrutiny is to be adequate. Committee members on their own are unlikely to know where the bodies are buried. It would help if our elected representatives were less caught up with localist and clientelist concerns. While our electoral system may play some role in this, more effective local government – with its own stable sources of finance – is required if localist concerns are to be diverted to local authorities.

    A whistleblower’s charter also enhances the threat of exposure. My TCD colleague Bill Kingston has long argued that it would have made much less likely such public-service failures as the lethal blood transfusions scandal, illegal charges for long-stay institutional care, Garda impropriety in Donegal, the PPARS health-service payroll system and the acquiescence of the Revenue Service to the demands of Charles Haughey.

    As the whistleblower whose revelations led to the resignation of the entire European Commission, Jacques Santer has written, “it is an illusion to think that stricter regulations and a perfect audit policy can wipe out all major irregularities . . . Whistle blowing is a guarantee against the persistence of structurally endemic fraud and irregularities.”

    A more inquisitorial Oireachtas and a whistleblower’s charter may also have brought to light much earlier the abuses revealed in the 2009 Ryan report.
    Lack of transparency in policymaking facilitates interest-group and regulatory capture. I quoted from Garret FitzGerald in this newspaper recently to the effect that “democratic national governments tend to be subject to such strong pressure from vested interests within their own territories that many of their decisions operate against the interests of society as a whole”.
    All policy advice should be scrutinised in public before decisions are reached. #

    And the kids in state care issue is nauseous to read about

    #THE HEALTH Service Executive has pledged to improve child protection services following reports which show up to 35 young people who were known to social services have died over the past 18 months.
    Most young people died from natural causes, followed by suicide, accidents and drug overdoses. #

    Children dying of natural causes. There is a graveyard of children in Letterfrack linked to the Industrial school . This issue has been consistent for over 100 years.

  21. “NEARLY 200 young people died in State care during the decade to 2010. The fatality rate was eight times higher than that initially acknowledged by the Health Service Executive which, having attempted a cover-up of inadequacies involving its record-keeping and family services, hampered the subsequent, government-appointed investigation. It was a squalid exercise in official denial”

  22. @ seafoid,

    +1,

    When the People fear the Government, there is tyranny. When the Government fear the people, there is liberty. ( famous quote )

    I fear the Irish Political establishment, along with their civil servant spin masters.

  23. @ JR

    I believe his bedside manner has improved.

    A Ryanair flight is not, of course, an operating room and the parallel he draws between a profit-driven low-cost airline and a health service does not stand up to a moment’s examination. But the truth of what he says with regard to the inability of the “management” of the HSE to actually do its job is being borne out in loud headlines this very morning.

  24. @ Sporthog

    I would fear the ineptitude of the establishment more than anything else . 2010 and 2011 were such eye openers.

    http://www.irishtimes.com/opinion/dysfunctional-culture-of-civil-service-management-1.503889

    “A fundamental weakness in the Civil Service has to do with the very idea of management. The distinctive work of management is not understood; management work is undervalued; no one is responsible or accountable for the health of the management system, and a dysfunctional management culture has had even more serious consequences than any lack of competence.

    When Minister for Finance Michael Noonan said, in commenting on the €3.5 billion accounting error in the Department of Finance, that there was no point in blaming an individual as “it was a systems problem”, he and many others who repeated his diagnosis displayed a lack of understanding about what constitutes the work of management.

    The distinctive work of a manager entails working on the business, as distinct from in the business. If the error was caused by a systems failure, then responsibility lies with the senior managers who are paid precisely to design, install and maintain good systems.

    Other elements of management work that need to be assessed include staffing, for example ensuring key skills are in place; managing money; improving operational efficiency and developing and executing good strategies. Organisational reviews carried out on several departments, together with other reports, reveal widespread shortcomings in these aspects of management.

    Because the substantive work of management is not understood, it is not valued. The more an individual moves up the Civil Service hierarchy the more their attention is directed toward serving the Minister. Career progression depends far more on this than on how well they manage a department with perhaps a thousand staff and a budget of a billion.

    That managerial work is neither understood nor valued is borne out in the disclosure to me by a secretary general not very long retired that: “I never received one day’s training in management.”

    The research on performance management systems consistently reveals that unless there is authentic accountability at the most senior levels, the system becomes discredited.

    As things stand, the 1924 Ministers and Secretaries Act in effect conflates the performance of the Minister and secretary general, such that you cannot give a negative performance rating to the latter without reflecting badly on the Minister.
    With this “Faustian pact”, as John McGuinness called it, between the two parties, this is not going to happen, as illustrated graphically in the debacle over the collection of the household charge.

    Was it the Minister or his officials who got it wrong? We will never know. Minister for Communications Pat Rabbitte has frequently expressed his desire to bring in the necessary legal changes which at least would allow for the possibility of holding secretaries general and Ministers accountable.

    A further consideration is that unlike Britain and other countries, we do not have a “head of the Civil Service”. If we did, that person would have a central role in reviewing the performance of the most senior officials.

    In an address to the Institute of Public Administration in 2007 on the topic “Building Capacity”, the late John Murray, a highly respected professor of business management at Trinity College, defined capacity as having these elements:

    The ability to deliver services to meet citizens’ expectations. (This is the function that draws most heavily on managerial competence, as it involves getting work done through others.)

    The ability to provide effective advice to the political decision-making process. (This reflects the entirely legitimate preoccupation with serving the Ministers.)

    Then Murray added “ . . . and in a manner that only those living in captured and corrupt systems can fully appreciate, it [capacity] relates to a value base that owes unswerving allegiance to independence, probity and a commitment to speaking truth to power”.”

  25. @ seafoid

    Thanks for the John Murray reference. A few other quotes from his talk.

    ‘It is of the essence of the state’s duty to regulate conflict. It cannot be popular with everyone, all the time’.

    ‘Or it could be that these processes are adequate and well executed but that there are deep inertial forces in the resource base – in the capacity – that impede implementation of even the best strategies and plans’

    ‘The question of what constitutes a true public good that may only be provided from within the public sector generates a very short – albeit very important – list. What the state actually does is often more a reflection of history, evolving ideology, industrial relations negotiation and organisational inertia than anything else’

    Amen

    @ DOCM

    ‘A Ryanair flight is not, of course, an operating room and the parallel he draws between a profit-driven low-cost airline and a health service does not stand up to a moment’s examination. But the truth of what he says with regard to the inability of the “management” of the HSE to actually do its job is being borne out in loud headlines this very morning.’

    Tony O’Brien pointed to two fundamental problems which beset the HSE. The first is the lack of political consensus in Ireland over the boundaries of publicly funded healthcare.

    The NHS was a child of post-war socialist Britain, which has many years of rationing, and had never heard of the Costa del Sol. David Kynaston has described the huge work involved in delivering decent housing and healthcare to millions who never knew it. The fate of the Mother and Child Scheme provides a measure of how undeveloped and archaic our state was at during the period.

    The second problem relates to the role of unions. The HSE will never be the NHS. Pace Swift and Connolly, this nation had no Enlightenment, no Industrial Revolution, no WW2 and no mass working class party on the British scale. The dominant native parties were and are rooted in property, large or small.

    The politically determined, and even constitutionally determined, reality is that HSE management has no choice but to accommodate itself to a wide range of entrenched stakeholders and vested interests, including suppliers as well as unions. The medical consultants union, for example, is relatively small, but it punches well above its weight, because it has serious connections, which include links to very powerful clans and business networks.

    The mass-membership unions in the HSE have no choice but to try to match the clout exerted by the larger stakeholders. Their members expect no less. Since that membership often includes many of the middle managers who are charged with implementing policy, the predictable result is gridlock.

    As the Russians say, the fish rots from the head. Absent some willingness on the part of our comfortable classes to be accountable ie to step aside when they have screwed up, there can be no prospect of progress.

  26. @ PQ

    Indeed! But in my view at the head of the fish is the issue of who controls the money. At present, it is the parties you mention but it is supplied by a very large, and gullible, section of middle-income taxpayers, the vast majority not paid from the public purse. Those unable to carry the strain of private health insurance are currently being fobbed off with crumbs from the table in the form of access to medical cards. (“Vote for me, and the medical card is in the bag”).

    There is only one solution and that is a universal contributions based system of some kind that allows the establishment of a market mechanism for medical services available to all on equal terms (not, repeat not, to be confused with privatisation), to establish appropriate pricing of skills and services, with subsidisation of those unable to pay the necessary contributions. This would be in the interest of ALL concerned.

    And the exclusion of politicians from management of the system.

  27. @ PQ

    By the way, on the general issue of management in the public sector, the central problem confronting those attempting an analysis is their inability to get outside the mindset of the “Westminster model” (which may have been suited to running an empire but is certainly not suited to the circumstances of the states that once made up the latter). The irony is that Devlin, half a century ago, suggested a means of breaking out of it but it foundered like many other less worthy initiatives since.

  28. @PQ

    Very interesting post. I cant help thinking that the unions in the HSE are going to have a very different future than anyone now working in the organisation envisages. The population is growing older and average longevity at age 65 is a good 5 years longer than it was 20 years ago. Medical costs are inflating by at least 5% a year and a huge chunk of costs come in the latest years of life. It wont be possible to increase funding by 5% a year. The NHS and the French health system have exactly the same problem. Expectations are infinite and funding is not.

    And dont the Irish middle classes really shaft those below them on the rungs of society ?

  29. @ Sporthog

    You may have seen recent reports that companies such as Nestlé have admitted that they are being supplied seafood by processors that trade in slaves — that is what has been happening in plain language.

    Last month the Guardian reported that the Irish fishing industry was using forced labour and engaged in trafficking while not paying the minimum wage. Within 3 weeks, Simon Coveney announced that 500 work permits would be issued — rapid action when required but nothing about who knew about it in the industry or at official level, besides the Guardian. Absent the newspaper’s investigation it would still be going on like the lucrative language school business.

    Coveney didn’t have the decency to thank the reporters for their work.

    Modern slavery and people trafficking in Thailand and Ireland

    The health service model is bound to be dysfunctional when it depends on people who are far from wealthy taking out private health insurance because they do not trust the public system.

    Remember Harney and her centres of excellence — as if excellence could be conjured up by a magic wand.

    It is better than Greece’s where you had to bribe your doctor to move up on a waiting list and doctors also got a slice of the cost of materials used. In 2010 George Papandreou then Greek PM said the same stent that cost €500 in Germany cost €2,000 in Greece.

    It’s interesting that as far as I know, the ‘messenger boy’ role of the TD has never been seriously surveyed to check who uses TDs as conduits for public services and what are the issues raised.

    How could citizen bureaux be improved?

    In 2007 Tony Killeen, then a minister of state and TD for Clare, said his office mailed 14,000 letters in a year; at the time 130 civil servants were assigned to constituency work for ministers.

    My own experience of dealing with officialdom on adoption was very positive without having anyone pulling strings: I met the head of the consular section in the Dept of Justice (not Foreign Affairs) and he arranged a one trip passport for my son from Manila. Separately the then Adoption Board had agreed prior to going to the Philippines to have a social study of suitability done.

    Enda Kenny’s aspiration that by 2016 Ireland would be “the best small country in the world in which to do business” will not be met based on several international benchmarks but it should be recognised that Ireland is an attractive location for business thanks largely to his predecessors. However, it would still be without the elite ensuring that Ireland has one of the poorest provision of occupational pensions in the developed world while politicians lavishly feather their own nests.

    Ireland: Best small country for business in 2016?

    It is often argued that the Dáil should have a more active role in legislation but the launch of the Innovation 2020 so-called “strategy” by the Government last week shows the limitations/ interests of parish-pump TDs.

    This is about the State spending up to €3bn per year on science policy but the FF and SF’s enterprise spokespersons had nothing to say and the rest of the back benches were also silent.

    The Irish Times was positive because its science editor’s lobbying for more cash for researchers may be met. The Universities issued statements of approval and regrettably I appear to have been the only critic of a mis-named strategy and flawed document.

    Irish Innovation 2020 Strategy Report: Wish list based on distorted data

  30. The Building Capacity paper is outstanding in terms of analysis and presentation but arrives at the wrong conclusion even within its own terms.

    “Public discussion of capacity most commonly focuses on the ability to deliver services. For most citizens, that is what the apparatus of state does. It is a feature of daily life, experienced through the delivery of traditional core activities of justice, education, health and defense but also through the provision of a vast array of public services and transfers ranging from the weather forecast to renewing motor tax or the collection of refuse.”

    “Behind this most public aspect of capacity lies another equally important aspect, but one experienced in a very restricted forum: in the market for advice and wise counsel, particularly at the interface of the political and administrative systems…”

    “To state the obvious, the delivery of public services ultimately depends on the quality of policy decisions. No amount of capacity to deliver services efficiently will make the wrong service a good one.”

    The conclusion drawn by Devlin, and recommended for Ireland, 50 years ago, and followed nowadays generally by countries not victims of the Westminster model (the experience of the UK, Australia, Queensland and New Zealand is all that is cited by the author!), with Sweden being the most advanced, was that it was essential to almost hermetically separate policymaking at a central government level from management and implementation of agreed policy, with procedures for (i) arriving at the correct policy decisions and (ii) governance oversight – mainly by parliaments – of the executive agencies – with clear legislative mandates -charged with implementing them.

    If public goods constitute “a vast array of public services and transfers ranging from the weather forecast to renewing motor tax or the collection of refuse”, why then attempt to manage such a heterogeneous range of activities as if they constituted some form of homogeneous whole, subject to a central department, such as is currently the case in Ireland? And which is, in any case, in direct contradiction with the aim of allowing agencies to get on with their specialised jobs.

    The correct approach has, nevertheless, been attempted in a half-baked way over the past half century but largely incorrectly in failing to break down the identifiable functional units to be given executive agency status (the HSE being the most glaring example) but most importantly because the central budgetary control function has not been developed adequately.

    This last mentioned issue is the key. In its absence, all that is left to the DOF (the only department that should carry this responsibility), if things go off the rails, is to pull some rudimentary emergency brakes e.g. highly damaging staff recruitment embargoes etc.

    Maybe an existing system could be bought off the shelf from the Swedes?

    http://www.esv.se/ESV/English/Outcome-of-the-central-government-budget/

    The likely political objections to such a step are obvious as politicians would have their hands taken off the largesse tiller. What is less obvious is why those paid from the public purse, but labouring under the current inadequate structures, are not pushing for such a development.

  31. One could add that John Murray draws attention in his Buildiing Capacity paper to another phenomenon that gives reason to be hopeful i.e. modernisation due the leap-frogging of technical progress over pettifogging political (including trade union) and centralising civil service obstruction.

    “In some ways capacity review is an obvious and almost trivial exercise: look around and see what is being delivered. I can tax my car on the internet and get a tax disc for display virtually by return of hard copy post. (From a performing state perspective I wonder, of course, why I can’t yet print my disc at home like I print my airline boarding pass). Many can remember queuing for a motor tax renewal on the city’s footpaths and therefore say: ‘excellent performance – there is real capacity to deliver’. On the other hand, I may feel unsafe on the streets in certain locales; I may be anxious about access to world-class medical treatment in a timely manner; I may really want to move by public rail around the country rather than by car; or whatever else may concern me as a citizen. In areas where the citizen has concerns or is dissatisfied for reasonable cause, underperformance and the absence of appropriate capacity is usually obvious’. What could be more obvious that the protracted inability to deliver driver testing while road deaths accumulate?”.

  32. @ “Building Capacity” – it takes 24 pages to say what? It might have been said in 3 – and perhaps better.

    DOCM – you might try to forget about the Nordics – we are NOT one of them, and never will be. We are us. Like it or lump it we worship the Mushroom Policy (keep folk in the dark and pile on the horseshit).

    Our civil service does cannot do innovation. It has to operate within a specific Rules-and-Regulation paradigm. Hence any critiques of what is ‘not right’ has to be couched in quite careful terminology since any critique is an implied allegation that some CC folk are not doing their job (according to the Book!). Can’t have that, now can we? So, any changes have to be steered from the top down – even if they appear to germinate from the bottom up, they are in fact ‘orchestrated’ from the senior levels.

    If one really – like really, would care to understand how our civil service operates and to understand just how meaningful re-structurings cannot happen (absent a catastrophic event), you need to have a firm grasp of “System Effects” (see: Robert Jervis). Its not happy reading. Actually William Kingston (‘Interrogating Irish Politics’: DUP 2007) is a much more enjoyable read.

    You want a ‘flexible’ CC – with capacity? – then re-write the Rule Book. And who will do that re-writing? Why the Mandrinate, of course. 😎

  33. I just cannot see how the Irish governance model is fit to manage the challenges of the next 20 years. The EZ will probably break up, climate change will intensify and political chaos will spread. FN is just an amuse bouche. Who needs a clientelist, dysfunctional and useless system where basic management is deemed surplus to requirements ?

  34. @ BWS

    I beg to differ. Our history, since joining the EU (an exercise of real sovereignty in the sense of agreeing to exercise a considerable part of it in common with other European countries) has been one of disentanglement, voluntarily and involuntarily, from the administrative and cultural inheritance of being part of the British Empire. Regrettably, the academic community has tended not to keep pace and is still firmly stuck in the Anglosaxon world, the term widely used on the Continent.

    I concede that we have yet to fully find our own way. That the term Madarinate has little footing, other than in re-runs of Yes Minister, is another hopeful indicator.

    And still another from the pages of the IT which I noted after posting above.

    http://www.irishtimes.com/opinion/letters/the-hse-and-local-accountability-1.2468768

    Allowing the functional agencies, in all their variety, existing and to be created, get on with the job and fixing responsibility with them for the outcomes, can only happen in the context of the reform I sketch in above.

  35. DOCM: Good luck with your wish list.

    There is not a hope this side of hell that we will go Nordic. Its simply not in the genetic make up of our politicians (being parish pump types) nor the upper levels of our CC whom have stealthily and craftily engineered a commensal fusion with their counterparts in the upper levels of our parliamentary parties – ie: “Please do not bother us too much and we will do likewise”.*

    The administrative structures, rules and regulations we have will have to do until there is some widespread catastrophic bureaucratic failure – which cannot be plausibly attributed to “a system failure”. Only then may it be possible to get the re-structurings that will allow for transparent accountability and genuine sanctions to be meted out for those responsible for wayward policies and decisions.

    Please try not to hold your breath on this one – its likely to be a long wait.

    *I believe Peter Mair may have coined the term ‘cartelization’ to describe this process. ‘Cozying-up’ might also be appropriate. Makes good sense for both parties. Not so good for us citizens.

    As for the HSE: Byzantium AD 1200 – or near enough.

  36. @ Michael Hennigan,

    Well done to you for your brave step in becoming a adoptive father.

    There was a time in Ireland when adoption was almost as easy as taking a bus into town. Unfortunately times have changed greatly.

    Adoption now appears to be a “dirty word”, a shameful episode of Ireland’s history.

    These days… it is all about tracing of legacy adoptions. There is no national adoptions to speak of in Ireland any more.

    Unfortunately since Ireland implemented the Hague Convention in a manner more “Hague” than “Hague” we have now resulted in this..

    http://www.arcadoption.net/

    Have a read of “How did we get to this” part I and Part II

    Bureaucrats in Ireland appear to be more concerned with the optics of being seen to be “doing the right thing”.

    Even if it means the number of Inter country adoptions into Ireland approach zero.

    Irish Infertile people…. are facing a form of tyranny should they look at ICA.

    “Remember the Child”…. which is total garbage… given the excessive focus on rules, regulations, background checks, procedures. It is about the quality of a single adoption as distinct from the quantity which remains to be fulfilled.

    Adoption in Ireland has in effect been regulated out of existence.

    Woe be to those potential adoptive children who require loving parents…. they have been failed greatly by Ireland and it’s hoards of unaccountable self serving bureaucrats.

  37. @ BWS

    It all depends, it seems to me, on whether Labour rescue anything from the debacle of the party’s involvement in government. As I said on another occasion, it was a mistake for Fine Gael to agree to split the finance portfolio and an even bigger one for Labour to accept the expenditure side of it (which was not that surprising given the union background of the party’s leading lights). If the electorate endorses the party’s return to government, a return to the status quo ante – and stasis – will be confirmed. If not, who knows what will be cobbled together and what the possible eventual outcomes will be.

    P.S. The “catastrophic failure” has already occurred. It is the failure to respond correctly to it which is at issue.

  38. @ DOCM: Thanks for that. I believe the bigger mistake was for Labour to go into a coalition at all. We’ll see what the voters think.

    I think the 2016 election (the first of two?) will be a bit of a mess. A ‘cobbled’ coalition will simply allow the various parties to see what they can salvage. They will have little concern for the ‘problems’.

    I admire your fortitude in your hope (expectation?) of some meaningful CC re-structurings. I wish also. But my expectation is close to zero. You see, some folk see ‘failure’ as an actual ‘success’. And the greater the failure (from an outsider perspective) the greater the success (from the insider perspective). Daft? Probably, but that’s how I experienced it – on several occassions. The insiders did what they did because they KNEW it was the correct thing to do (even though it made the situation worse). If they had done something else it would have been incorrect. And one does not do incorrect stuff – now does one?

  39. The long term effects of “labour mobility” on Bulgaria, Ireland, Greece, Spain, Croatia, Cyprus, Poland, Portugal, Romania and the three Baltic Member States are going to be quite something to see.

    http://ec.europa.eu/eurostat/statistics-explained/index.php/File:Crude_rates_of_population_change,_2012%E2%80%9314_(per_1_000_persons)_YB15_II.png

    None of Portugal, Romania, Poland, Estonia, Latvia or Estonia have had population growth since before 2012. Latvia has lost 10% of its population to good old labour mobility since 2004.

    Ever closer union.

    @DOCM

    Regrettably, the academic community has tended not to keep pace and is still firmly stuck in the Anglosaxon world, the term widely used on the Continent.

    Of course the “Anglosaxon Word” (sic) refers to everything outside the Brussels consensus. Everyone else has it wrong apparently.

    So the “academic community” (and unsavory intellectual types, people without ties, etc) need to free themselves from global group think and instead open their minds to the dynamism and intellectual breadth of ordoliberalism, austerity and goldbuggery.

    It defies belief that after the last seven years of epic policy failure and economic underperformance the Eurozone’s would be political and institutional elite are still convinced that it’s the rest of the world that has a problem.

    As you were.

  40. @Shay

    Portugal has a very long tradition of emigration. It seems the education system is quite poor because a lot of emigrants are lower skilled, in my experience anyway.

    Latvia n Lithuania are even worse than Ireland in terms of the influence of pull in getting a job.

    Migration to find better paid work isn’t necessarily bad or permanent. You would have to know what age groups are involved. Remittances are good for demand

  41. @ BWS

    With the occasional exception e.g. the bans on smoky coal, plastic bags and smoking in public places, Irish politicians never move until forced by events to do so. It seems to be what distinguishes them most. The likely catalyst for the immediate future is the abject state of the health service. If, for example, “local accountability” for taking care of the sick becomes the motto, should this not also extend to the ambulances in which they are conveyed?

    http://www.independent.ie/irish-news/health/ambulance-staff-rota-blunder-to-cause-chaos-at-christmas-34300421.html

    It seems to me that a majority of the electorate may now view the situation in the same manner as it is viewed by Michael O’Leary.

  42. @DOCM

    I dont think the record of CEOs moving into the delivery of essential services is great. It is easy to manipulate EPS, innit. Easier than working with Gordian knots.
    Carly Fiorina of HP has struggled in politics.

  43. “With the occasional exception … … Irish politicians never move until forced by events to do so.”

    I’d extend this to all principled politicians – whose principles are perfectly flexible, you understand.

    Bureaucratic, pyramidal bureaucracies metastize both vertically and horizontally until they resemble a proto Tower-of-Bable. They are then re-set to a smaller, mirror-image clone of the original – and its “off we go again!”

    The catrastrophe I have in mind is what “The Gripper” meted out to the striking (aka: revolting) US Air Traffic Controllers. That taught some folk a very nasty lesson indeed. Not something I would be comfortable with, but The Chief has to be able to ‘pull rank’ when required. Otherwise – why bother having a Chief?

  44. “Noonan to pull trigger on AIB IPO if re-elected.

    An article by Ian Guider in today’s Sunday Business Post, regarding AIB being re-floated (IPO 25%) next year if FG reelected, contains this gem of wisdom from Minister Noonan.

    “”As a matter of principle modern economies work best when their banking sector is in private hands…””

    Not a student of history, obviously!

  45. @JR

    The Germans will not support Deposit Insurance in the EZ
    over fears of moral hazard. Handing over AIB to private hands after its second collapse in a generation would be even more dangerous from a moral hazard perspective than letting Italy have a deposit insurance scheme.
    The DNA of AIB is suicidal.

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