Jim O’Leary has an op-ed about the Local Property Tax in today’s Irish Times, based on his recent report, How (Not) To Do Public Policy: Water Charges and Local Property Tax, published by the Whitaker Institute at NUI Galway. The report was launched at a conference last month at NUI Galway featuring senior policymakers, public servants, academics and other experts who evaluated the strengths and weaknesses of the policy-making process in Ireland with a view to suggesting how the quality of policy-making might be improved. Highlights from that conference, including videos of Jim’s presentation and Robert Watt’s keynote speech as well as audio of the panel sessions can be found here on the Whitaker Institute website.
The latest edition of the Economic and Social Review (Volume 49, No.3) is now available, containing the following research and policy articles:
Job Insecurity and Well-being in Rich Democracies by Arne L. Kalleberg
Economic Stress and the Great Recession in Ireland: The Erosion of Social Class Advantage by Christopher T. Whelan, Brian Nolan and Bertrand Maitre
Household Formation and Tenure Choice: Did the Great Irish Housing Bust alter Consumer Behaviour? by David Byrne, David Duffy and John FitzGerald
An Analysis of Taxation Supports for Private Pension Provision in Ireland by Shane Whelan and Maeve Hally
1:30pm, Friday, 28 September 2018
The Institute for Lifecourse and Society Building, NUI Galway
In the fateful decade since the collapse of Lehman Brothers and the Bank Guarantee of September 2008, much has happened in Ireland – financial crisis, deep recession, bailout by the ‘Troika’, a protracted period of austerity followed by vigorous economic recovery. But what has really changed over the last ten years? What developments in the financial and political system have taken place and what has been the cultural effect of the crisis? Will we repeat the same mistakes or find ways to avoid them? A major public event convened by the Moore Institute and Whitaker Institute at NUI Galway will examine these questions with a high profile group of participants, including keynote speeches by former Central Bank of Ireland governor Patrick Honohan and playwright and author Colin Murphy.
14:00 – 14:05
Alan Ahearne, Director, Whitaker Institute
Daniel Carey, Director, Moore Institute
14:05 – 14:15
Ciarán Ó hOgartaigh, President, NUI Galway
14.15 – 14:35
former Governor, Central Bank of Ireland
14:35 – 15:35
Chair: Ciarán Ó hOgartaigh
- Angela Knight CBE, former Chief Executive, British Bankers’ Association
- John McHale, Dean, College of Business, Public Policy & Law, NUI Galway
- Frances Ruane, former Director, Economic and Social Research Institute
15:35 – 16:00 Open discussion
16:00 – 16:20 Coffee break
16:20 – 16:40
Playwright and author
Chair: Alan Ahearne
16:40 – 17:45
Chair: Dan Carey
- Stephen Collins, former Political Editor, Irish Times
- Kate Kenny, Professor, Queen’s University Belfast
- Gearóid Ó Tuathaigh, Emeritus Professor in History, NUI Galway
- Fiona Ross, Chair, CIÉ
17:45 – 18:00 Open discussion
This event will take place in the ILAS Building on the north of the NUI Galway campus from 1:30-6pm. A reception with light refreshments will follow the event.
The event is free and open to the public, however those who wish to attend must pre-register.
Today, we have a guest post by Sean Kenny (Lund), who below summarises some lessons for policymakers from a recent working paper with John Turner (Queens) on the Irish banking system before joint-stock banks.
As the Irish economy continues to emerge from the financial crisis of 2008 and the controversial blanket guarantee which followed it, from the comfort of hindsight a number of decisions have been criticised by prominent commentators. In particular, the terms of the bailout package and the shouldering of bank debt by the Irish taxpayer have featured frequently in the debate. In other words, the domestic and international political machinery employed to address the collapse of the banking system was deemed by many to be inappropriate, as events unfolded all too rapidly. Over the critical weekend of the guarantee, concerns were raised that no currency would be available from ATM machines at the open of business the following Monday.
It is interesting to ponder what might have happened under such a scenario where no support mechanism, instead of an inadequate one, had existed and where money may in fact have disappeared from the economy. As my research with Professor John Turner (Queen’s University, Belfast) documents, such was largely the experience during the last Irish banking crisis of comparable scale in 1820. During this era, money consisted of alternative private bank notes which were redeemable in Bank of Ireland notes considered “as good as gold.”
No central bank existed and the Irish and British exchequers had recently amalgamated. If a private bank had lent unwisely, pushing too many of its notes into circulation, when their notes were presented for conversion at their counters, failure could quickly occur if its current loan income and reserves fell short of its short term liabilities (notes and deposits). Of course, this tendency was exacerbated by a lack of regulation on the issue of private currency, a lack of trust in the stability of small private partnership banks and a prevailing political ethos which saw no role for government involvement in ensuring financial stability.
The 1820 crisis, which began in Cork and spread north saw 40 per cent of Irish banks fail within three weeks, leaving large portions of the country with neither currency nor banks for many years. This had predictably adverse effects on the economy as investment and consumption were largely suspended. In a scene many of us are familiar with today, many bankers, consisting primarily of the politically-connected landed elite, shielded their personal estates from liquidators as their banks’ deposits and notes went unpaid, ruining whole communities in turn. In the worst affected areas, money was simply unavailable to pay wages or to engage in trade and so consumption and employment further collapsed while price falls continued as money became scarcer. As a petition signed by the Lord Mayor of Cork put it, “all confidence, as well as Trade, is suspended, there not being sufficient currency to represent property in its transfer”.
During the following five years, a twilight zone emerged from the ashes, during which an insufficient supply of private money in the form of trade bills was circulated amongst the merchant class who constantly petitioned for reform of the entire monetary and banking system. In this era of uncertainty, many survivor banks and businesses failed as debts could not be collected and the Bank of Ireland remained solely in Dublin.
The 1820 crisis marked the beginning of the end of a quarter century which one historian called a “financial pantomime” where more than 20 percent of the banking system failed on at least four separate occasions. Compared with our own age where banks are deemed “too big to fail”, this was an era in which banks were too small to survive with primitive legislation controlling their activities. So utterly decimated was the monetary and banking system following 1820, that new legislation was introduced in 1825 which replaced the small partnership banks with a system of well capitalised joint stock banks with unlimited liability for a large number of shareholders.
This revolutionised the Irish banking system and dramatically improved financial access through the coming decades. No major banking crisis was to visit Ireland again until 2008. In an age where private (crypto) currencies are being promoted as a panacea to the alleged ills of current monetary regimes, it is appropriate to recall that when private money dies, it is not only its holders and issuers who are affected when the scale of its exchange is significant. The demise of this group will reduce their investment, consumption and debt-servicing capabilities, which will in turn affect the wider economy. Instead, the utopia of a well-designed financial system in the context of a political apparatus which minimises the fallout when things go awry, then as now, remains a goal worthy of our finest endeavour.
Conference and launch of new report on water charges and the local property tax
1:30pm, Thursday, 13 September 2018
Aula Maxima, The Quadrangle, NUI Galway
Why do some public policy measures succeed while others fail? Why, for example, has the Local Property Tax been a policy success, while the attempt to introduce water charges was a policy disaster? What can we learn from successful and failed policies about the policy-making process in Ireland and how to make that process more effective?
This conference will gather senior policymakers, public servants, academics, and other experts to evaluate the strengths and weaknesses of the policy-making process in Ireland with a view to suggesting how the quality of policy-making might be improved. Although much analytical attention has been paid to the effects of public policies in Ireland and to the macroeconomic context in which they are set, there has been very little analysis of the policy-making process: How policies are conceived, designed, implemented, communicated, and reviewed. This conference is an attempt to address this gap. View the conference programme here.
The conference will feature the launch of a new Whitaker Institute report by economist Jim O’Leary on water charges and the local property tax. This report, meticulously researched based on exceptional access to senior policymakers, looks back forensically at these two recent policy initiatives and explores what it was about the policy-making process in each case that contributed to success or failure.
This conference is aimed at a general audience and will appeal to anyone with an interest in how public policy is made in Ireland. The event is free and open to the public, however those who wish to attend must pre-register at: https://www.eventbrite.ie/e/how-not-to-do-public-policy-tickets-48552806752
I thought I’d take a break from Brexit and Trump, and write a Critical Quarterly column about the Euro for a change. The main point I take from it now, a few months after writing it, is that we should stop teaching our students that if a currency union faces shocks that are symmetric, rather than asymmetric, then there is no problem. The post-2008 experience teaches us that free rider problems and ideology can lead to very sub-optimal responses even to symmetric shocks.
The Barrington Medal is awarded annually by the Council of the Statistical and Social Inquiry Society of Ireland under the auspices of the Barrington Trust (founded in 1836 by the bequest of John Barrington). The award is intended to recognise a promising new researcher in the economic and social sciences in Ireland. The award is a silver medal and €1,000. This will be the 170th anniversary of the lecture series and the recipient will be the one 129th Barrington Lecturer.
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. In treating the issue of economic or social policy,
the paper may either report the findings of a statistical research study dealing with some aspect of the problem or deal with the underlying theoretical considerations involved, or preferably combine these two
approaches. It should be written in a manner that makes it accessible to non-specialists in the area. More technical material may be included in an appendix.
The paper is published in the Journal of the Society, so it should not have been published before (nor should it be published subsequently without the prior consent of the Council of the Statistical and Social Inquiry Society of Ireland). Candidates, who at the time of their submission must be not more than 35 years of age, should at least submit a detailed abstract of approximately 1,000 words on the proposed lecture, with preference being
given to full papers. A short CV and the name of a proposer who is familiar with their work should also be submitted.
The call for entries closes on September 8th. More information, including a list of past winners of the Medal since 1992, is available here and from firstname.lastname@example.org.