Ireland The Changing Role of the National Economic & Social Council

1. National Economic Social Council NESC Ireland The Changing Role of the National Economic & Social Council Rory O’Donnell Director rory.odonnell@nesc.ie www.nesc.ie

2. Ireland is interesting because Late development Industrial strategy Social Partnership

3. Ireland is interesting because Late development 19thC de-industrialization & population collapse Protection, 1922-1960, failed because of small, poor, peripheral, home market Remarkable convergence 1987-2008 Industrial strategy Social Partnership

4. Ireland is interesting because • Since 1960, industrial development with activist public agencies • focus on: • exports • inward investment • European integration • S&T and innovation • ‘Networked Developmental State’ Late development Industrial strategy Social Partnership

5. Ireland is interesting because Inherited sterling & UK industrial relations From 1987 to 2008 used social partnership institutions & agreements to manage key macro, wage & supply-side issues Crisis since 2008: unilateral government action & collapse of national partnership Late development Industrial strategy Social Partnership

6. NESC Three main propositions • The role of an ESC reflects the national development challenges & is often shaped by crises in strategy & politics • The institutional design and organisation of the ESC matters • Traditional forms or 'representation' & 'participation', such as ESCs, face challenges

7. NESC Basic description of NESC • Established 1973, without statutory basis • Initial membership: employers, trade unions, farm organisations, academic experts & 5 govt departments (including Finance) • Chaired by Secretary General of PM’s office • Meets monthly, in plenary not working groups • Serviced by small Secretariat (economists and social policy analysts – PhD & masters-level)

8. NESC Basic description of NESC continued • Seeks consensus on analytical reports prepared by Secretariat or consultants, no voting • Not involved in legislation or mediation • Focus mostly on strategic issues and principles • Widened to social NGOs in mid-1990s • Widened to include environmental NGOs in 2011

9. NESC ESCs differ on several dimensions Composition: employers & trade unions OR inclusion of social NGOs & others Relationship to government: independent of government or close to government system Focus and conduct of work: medium-term issues & principles OR immediate, concrete, issues; plenary OR working groups Nature & goal of discussion: talk OR consultation with each other & government OR dialogue with goal of agreement or consensus

10. NESC Ireland's NESC on these dimensions Composition: widened to include agriculture organisations, social NGOs & environmental NGOS Relationship to government: close to government system because chaired by PMs department Focus and conduct of work: traditionally medium-term issues & principles, not hard business of social partners with government Nature & goal of discussion: evolved from consultation to search for agreed analysis & basis for agreements with government, and recently back to consultation

11. Characterising Councils & Dialogue

12. Characterising Councils & Dialogue

13. NESC Three phases in the role of NESC • 1973 to 1985: • Prepare analysis of specific policy issues & advise government • 1986-2008: • Prepare agreed analysis to underpin three-yearly social partnership agreements • 2009-2013: • Prepare studies to assist government in crisis management & explore basis for consensus

14. From initial growth to crisis • Opening & activist policy started growth 1960s • Through FDI, trade, public investment, EU but • Indigenous industry lost in free trade • Social need & expectations rose • Sterling context meant inflation/instability • Industrial relations conflict 1970s-80s • US Foreign Direct Investment fell in 1980s • Crisis prompted discussion in NESC 1986

15. Orthodox economic view 1979-86: fiscal and wage indiscipline undermined business success Decline of inward investment and failure of indigenous business • Excessive spending, public borrowing and wage growth

16. NESC analysis yielded wider view 1980-86: problems of stabilization, distribution and development are connected Business damaged by fiscal and labour problems Also reflect developmental challenge of a regional economy • Fiscal crisis has a developmental element • Macro pressures & debates also crowd out supply-side issues

17. Social Partnership System 1987 to 2008 • A three-yearly NESC Strategy report on economic and social situation & challenges • Negotiations then conducted in PM's department • Written 3 year partnership programme • Mechanisms for monitoring & review – in PM's department, not NESC • 8 Partnership programmes 1987 to 2008 • Remarkable economic & social progress

18. NESC Role of negotiated partnership programmes 1987-2008 articulated a shared understanding of key economic and social mechanisms aligned partners to consistent and competitive actions: macroeconomic, distributional & supply-side. provided framework for strategic government policy.

19. NESC NESC's role & method in partnership period 1987-2008 • Joint observation of evidence, both pleasant and unpleasant • Analysis that reframes a problem in a way that allows actors to see new possibilities for agreement and action • Allowing a combination of bargaining, solidarity & deliberation

20. NESC Examples of NESC's reframing analysis • 1986: basis for agreement on fiscal correction & development • 1989: European integration • 1990: analytical foundations for a partnership approach to macroeconomic, distributional & structural policy • 1996: enterprise-level partnership • 2005: The Developmental Welfare State • 2006: immigration & labour standards

21. Networked Developmental State & Developmental Welfare State NDS The long-term strength of the economy now depends on industrial & effective social policy DWS Social policies must share responsibility for economic performance and participation

22. 2000-2007: growth, politics & partnership yielded • Opportunist tax cuts & pro-cyclical fiscal policy • Pressure for housing supply • Insufficient public sector reform: training, education, health, childcare, welfare, housing, social services & transport • Bargaining focus on labour standards • Wage growth ahead of EU rates • Unresolved issues glossed over by revenue & spendingincreases

23. Segmentation in Ireland's Social Pacts

24. NESC Three basic challenges for ESCs • To achieve deliberation & reports/advice that go beyond the lowest-common denominator & facilitate problem solving • To pitch the work at the right level: between high-level strategy/principles & the hard business that social partners do with government • To maintain relevance in the face of both 'new governance' and 'permanent austerity'

25. NESC Challenge of maintaining ESC relevance • 'New governance' • Governments engage stakeholders directly • Policy thinking closer to policy implementation • Economic, social & environmental issues interact, needing inter-disciplinary analysis • Policy cause & effect more uncertain • 'Permanent austerity' • Unilateral government action & Troika direction • More zero-sum & less win-win possibilities • Social partners focus on bi-lateral relation with government • International instability & uncertainty

26. NESC References • O'Donnell, R., Damian Thomas and Maura Adshead (2011) 'Ireland: Two trajectories of Institutionalisation' in Avdagic, S. Martin Rhodes & Jelle Visser eds. Social Pacts in Europe: Emergence, Evolution and Institutionalisation, Oxford University Press, • Devlin, Robert & Graciela Moguillansky (2010) Alanzias Public-Privadas Para Una Vision EstrategicaDesarrollo, Santiago: CEPAL & SEGIB