Golden Growth: Restoring the Lustre of the European Economic Model

This World Bank report was written as part of the first Polish Presidency of the European Union Council. The report was launched on January 24 2012 in Brussels. I feel it is a good approach to take a European View of the Crisis.  We will see solutions, and problems, differently if they wear our EU hat.
The press release says: The report documents the impressive achievements of the European growth model over the last 50 years. Accounting for the stresses it is experiencing and assessing the longer-term challenges that Europe will face, the report then evaluates the six principal components of the model: Trade, Finance, Enterprise, Innovation, Labour, and Government. It finds that the European growth model has been a powerful engine for economic convergence, helping developing countries in Europe catch up to their richer neighbours and become high-income economies. But recent  changes in and outside Europe necessitate change. The report proposes the adjustments needed to make trade and finance work even better, to encourage enterprise and innovation in parts of Europe which have begun to lag, and address shortcomings in the functioning of labour markets and governments. The changes proposed would restart the European convergence machine, make Europe’s enterprises competitive, and help Europeans afford the highest standards of living in the world.
I was a co-author on Chapter 7 (Government), written by Kaspar Richter, Ewa Korczyc, and Paul Walsh.  My personal view:  Clearly the Economist has picked up on the magnitude of the debt problem facing the EU relative to the rest of the World.  It is also important to note that the size and structure of government spending, particularly social spending, while generous compared to the rest of the world, exhibits huge differences across EU member states. The current debate around the fiscal compact is about aggregate fiscal deficits and debt dynamics. Yet the degree to which member states are so different in the level and structure of their social spending is not really appreciated.  Tax harmonisation is one thing but maybe some thought should be given to divergences in social spending.  As EU citizens facing a potential Fiscal Union, a movement to Eurobonds and increased Political Reform, should Education, Health and Social Welfare supports not be the same for all? Depending on where you live in Europe, and your demographic, and now your debt level, your entitlements can be very different. Some states can deliver a high level of public service and economic growth, even in a high taxation environment, others seem to struggle.  Many countries, and the EU as a whole, seem to need a good deal of Political Reform.   All these good ideas around growth, and reform of taxation and spending, are all fine but can only be implemented with a major restructuring of Political Institutions at the National, EU level and Global Level.  The lack and poor quality of Political Institutions at every level can be blamed for our current situation. Reform of Political Institutions needs to happen to get us back on track.  Ireland can contribute at every level in this reform process. 
Report can be found on the below.

SSISI Barrington Medal Competition 2011/12

The Barrington Medal is awarded under the auspices of the Barrington Trust (founded in 1836 by the bequest of John Barrington). The award is intended to recognise promising younger researchers in social sciences in Ireland. This will be the 163rd anniversary of the lecture series and the recipient will be the one hundred and twenty-fifth Barrington Lecturer. The award is a silver medal and €1,000. 

 The lecture should be based on a paper of not more than 7,500 words addressing a topic of relevance to economic or social policy and of current interest in Ireland.  Candidates, who are within 10 years of completing a primary degree (or not more than 33 years of age), should submit a detailed abstract of approximately 1,000 words on the proposed lecture. They should also submit a short curriculum vitae and the name of a proposer who is familiar with their work. Entries should be sent by the 29 July 2011 to  
Dr Seán Lyons
Honorary Secretary, The Statistical & Social Inquiry Society of Ireland
c/o Economic and Social Research Institute
Whitaker Square, Sir John Rogerson’s Quay
Dublin 2.

Winners since the mid-1980s:

Clinch, J. Peter; Delaney, Liam; Harmon, Colm; Horgan, John J.;Johnston, Joseph J.;Kane, Aidan;Kearns, Alan; Keeney, Mary J.;Lane, Philip R.; Lawless, Martina; Lee, George; Lucey Brian M.; Lucey, Siobhan; Muckley, Cal; McCoy, Daniel A.; McNicholas, P. D.; Meenan, James; O’Rourke, Kevin; O’Toole, Ronnie; Oldham, C.H.; O’Neill, Donal; Thornhill, Donal J. and Whelan, Ciara.

Dublin Kapuscinski Lecture – ‘Climate Change and Development’

The Dublin Kapuscinski Lecture – ‘Climate Change and Development’ on 31st May 2011 at 1700-1900 in the UCD John Hume Global Ireland Institute. R.S.V.P. to 


The series is named after Ryszard Kapuscinski, a Polish reporter and writer who was a “Voice of the Poor” in his famous reportages and books covering the developing world.  The lecture series is organized jointly by the European Commission, the United Nations Development Programme and partner universities, in this case TCD and UCD.   Ms Barbara Nolan, Director of the European Commission’s Representation in Ireland will open the Dublin Kapuscinski Lecture 2011 on ‘Climate Change and Development’.

 Professor Dirk Messner, German Development Institute, will deliver the keynote lecture.  The global development panorama is changing dramatically. The challenges of security and poverty are more interwoven than ever before. Yet, two thirds of the global poor people are now living in middle income countries like China, India and Brazil. What does this new global poverty map imply for European development policies? Development trends are also embedded in an overall global development challenge: – climate change. The world needs to learn to decouple wealth creation from burning fossil fuels. A great transformation to a global low carbon economy is necessary during the decades to come in order to avoid major and dangerous changes in the Earths system. What do these global shifts imply for Europe s role in the world? Europe needs to define its global interests. And it needs to be part of a global governance strategy to shape global development trends.”

 A panel discussion will follow, chaired by Prof. Patrick Paul Walsh (UCD Chair of International Development Studies). Panellists include Francis Jacobs, (Head of the European Parliament Office in Ireland), Cliona Sharkey,  (Trócaire, Environmental Justice Policy Officer), Tara Shine,  (Head of Research and Development, Mary Robinson Climate Justice Foundation, Joseph K.Assan, (TCD-UCD MDP Lecturer in Development Practice) and  Frank Convery ,  (UCD Earth Sciences Institute).

 The lecture series offers citizens of the European Union an unprecedented opportunity to learn and discuss development, and issues related to development cooperation.









Universities should take to the ‘lifeboats’

Common wisdom suggests the state will not be ready to co-fund the IMF-EU deal by mid 2012. Another deal will accompany a slash in payments to the social sectors including Education. Is the third level sector ready for such a crisis?

The Irish State pays a core grant to our third-level institutions for each undergraduate student, and, in an equal amount, funds the majority of research and postgraduate fees (scholarships). The latter is managed by a proliferation of various third level education bodies which we label Quangos. The sector has developed an unnaturally high dependency on the public finances. This dependence is currently anywhere between 65 to 88 per cent in most Higher Education Institutes

The funding of third-level Quangos now represent an unsustainable overhead on the sector, as this form of finance flowing from the State is on the decline. The indirect costs or the administrative structures that have mushroomed during the boom (which distributed State money) are now vestigial and are turning into a major financial headache and constraint on the sector. The HEI’s must replace these funds with international research grants and postgraduate students. The Quangos are largely ill equipped to induce and manage this change.

The Universities, while undertaking many good reforms, made the mistake of allowing indirect costs inside universities to grow to over 50 per cent. Frontline lecturers’ salaries now only account for 25 per cent of the overall cost of the sector, when we include the overheads of Quangos. Academic salaries have collapsed by 25 per cent (net) since 2008. Most academic units have also lost up to 15 per cent of their staff via retirements or voluntary quits. These savings are returned and retained by the State and not by the Universities.  The oversized non-academic and undersized academic units are finding it a challenge to refocus efforts into securing funds from outside of Ireland. Academics need to be empowered to make such change happen.

What is the solution proposed by State and its agencies to cope with the current crisis?

An imposed agreement, under the false premises of Croke Park, to increase productivity levels of declining numbers of frontline lecturing staff is their answer. Not surprisingly, these productivity increases can never pay for what are now largely indirect costs in the sector.  New income streams are needed: higher levels of international students who pay fees, more EU and Global research funding successes, and private sources.

Yet, all hiring and promotions (whether funded by the State or not), that have come under the State’s employment control, are now banned. The most recent instalment of employment control wants to redeploy academics within and across institutions. There are even conditions on the nature of research that is allowed. The focus of such is on the disciplines that will drive the smart economy (see

This is a ludicrous attempt to turn academics into public servants. The agents of the State seem to have no idea how knowledge is created and dispersed. Academics in a global market face competition from serious creators of knowledge and find every international student and grant is a hard battle won.  Publishing in the leading journals and university presses is like winning Olympic medals in terms of a lifetime dedication to the cause. Academic credentials need to be first class, a Ph.D. from a top University and ground breaking publications. Academics need the time and space to perform at these levels.  Imposing constraints on academic freedom and tenure will only give our competitors an advantage over us, deter international students and grants from coming here and could rupture our growing reputation in scholarship internationally. The idea that an academic in UCD that gets a research grant from a major donor should first see if there is someone surplus to requirements inside UCD and then search in other universities, or even State departments, before hiring a post-doc clearly indicates to me that the state has no idea how knowledge is created. Incentives are for academics to leave Ireland rather than refocus efforts.

What do we do?

Universities have to realise the State is broke. Just like the State should have understood the Irish Banks were broke, now the Universities have to drop the State like a hot potato (Taxpayers and the IMF-EU would approve).

Trinity by the nature of its charter and academic ownership of its property can break from State faster than most.

The first move would be to establish income streams from undergraduate fees, increase the number of international students and external research income.

Most Universities like Trinity already have private enterprise on campus in terms of the library shop, rented accommodation, a Foundation office and Campus Companies. These could turn a higher profit to fertilise academic scholarship.

The University of Dublin, and the National University of Ireland, could create new colleges. Let’s call the one alongside Trinity College, “Christchurch College”. Christchurch could hire and promote and pay pensions on a private basis funded by the new income streams.  All existing contracts could be honoured by Trinity College.

The nature of self governance in a third-level institution means that academics rule. They can promote academic scholarship, and while doing so they can control all non-academic units and can easily restructure the internal indirect costs over-time and reduce them to less than 30 per cent, retaining these savings to invest in Education and Research.

The top slicing of finance by education Quangos would be removed and most importantly their ability to constrain academic freedom to create knowledge for use in a global society would come to a deserved end.

Some universities have endowments and assets that could buy the limited time to achieve such academic and financial security.

Even if the State does not default the case for the third-level institutions to break away from the influence of the State and its agencies is growing with every minute.

The Irish State is a sinking ship and academics need to escape on lifeboats labelled ‘University Charters for use when Academic Scholarship is put at risk from the State, Church or private interests’.  The Founders’ bequest throughout the centuries gives academics an instrument for use when academic scholarship is threatened. Academics need to use it now.

Economic and Social Review back in the Social Science Citation Index

Economic and Social Review has been accepted by Thomson Reuters for re-inclusion in the Social Science Citation Index (hence Web of Science).

We should  be  indebted to the work of Niamh Brennan, Programme Manager, Research Information Systems & Services, Trinity College Library Dublin, for her work that showed the citation and publication record of the Journal, during its time in exile, to be of the international standards required by Thomson Reuters.

I personally enjoy writing, teaching and publishing on Ireland.  Work on Ireland published in the ESR was beginning to be seen as not internationally recognized. Hence we saw promotion boards in Irish Universities not counting the publication, yet it was counted in the research assessment exercise in the UK.  This creates poor incentives for scholars to work on Ireland, when in reality it provides extremely fertile ground for economic and social research.

As shown by Lucy and Barrett (2003), the ESR since 1970 has mainly published papers by those that were also publishing in the best Journals in their field, Neary, Honohan, Lane and Whelan, to name a few.  Lane and Whelan also edited the journal when it out of the Web of Science. The ESR is an important outlet for Economic and Social research on Ireland. Hopefully, the economics community will now promote it and build up its citation record to become a leading economic journal.  The researchers in Ireland are as good as those in Australia, Canada and the UK but we are seriously disadvantaged by not having top “home” journals promoted on good digital platforms such as the Web of Science.  



Well done Niamh, Editors and Contributors



Alan Barrett and Brian Lucey  (2003). “An Analysis of the Journal Article Output of Irish-based Economists, 1970 to 2001,” The Economic and Social Review, Economic and Social Studies, vol. 34(2), pages 109-143