Posts Tagged ‘austerity’

Book Review: Public Sector Reform in Ireland: Countering Crisis

In Public Sector Reform in Ireland: Countering CrisisMuiris MacCarthaigh focuses on the unprecedented public sector reform agenda of the Irish government introduced to counter the impact of the Global Financial Crisis (GFC). This book provides a valuable, ‘thick’ academic analysis of cutback management by studying the case of Ireland, one of the most badly affected states. Yao Han appreciated its contribution to research on state retrenchment and reform from the perspective of the reformers.

Public Sector Reform in Ireland: Countering Crisis. Muiris MacCarthaigh. Palgrave. 2017. 

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Beginning in late 2007, the Global Financial Crisis (GFC) exposed many states with fiscal imbalance and creeping public debt. In his new book, Public Sector Reform in Ireland: Countering Crisis, Muiris MacCarthaigh explores how the Irish government embraced the opportunity brought about by the crisis and retrenched the state.

The GFC pushed states to reform their public sectors. MacCarthaigh seized the rare chance to study state retrenchment in response to the GFC in 2011. His interest in the ambitious reform agenda met the desire of Robert Watt, the Secretary-General at the new Department of Public Expenditure and Reform (PER or DPER, pronounced ‘deeper’), to record all of the experiences and lessons of reform, allowing MacCarthaigh to go behind the doors of the Irish government to document and analyse the process primarily between 2013-15, with some follow-up data gathered up until 2016. The arguments throughout the book are supported by detailed evidence based on interviews with officials. Hence, Public Sector Reform in Ireland invaluably contributes to the study of state retrenchment as a response to the GFC from an insider perspective.

MacCarthaigh notes that although Ireland had reformed under New Public Management (NPM) principles since the early 1990s, the measures and changes introduced had not really reflected the essence of NPM, which emphasises efficiency and market-based objectives. The financial crisis created an opportunity for the Irish public sector to truly engage in NPM concepts through deep state retrenchment. The DPER was created to undertake the Irish reform. It led this by strengthening the coordination between individual sectors, which could be explained in accordance to the Post-NPM model which advocates ‘a strengthening of coordination through more centralized or collaborative capacity’ (Lodge and Gill 2011, 143). In particular, the new Minister Brendan Howlin, Watt and senior officials were empowered and legitimised to initiate a wide-ranging, whole-government public reform agenda taking advantage of the window created by the crisis, which corresponds to John W. Kingdon’s (1995) model of a policy window.

Image Credit: Government Buildings, Dublin (Gian Luca Ponti CC BY SA 2.0)

A newly established department does not necessarily have the de facto power to make other departments obey its orders or fulfill its expectations to reduce spending. But DPER did it successfully. MacCarthaigh nonetheless shows the frictions during the process. For example, the people inherited from the old department were very defensive when DPER was introduced. Some large spending departments – which remain anonymous within the book – felt that the public expenditure control was very difficult and that DPER did not understand them well. One Secretary-General of a department mentioned that DPER did not know operations and did not listen to people who did.

The author also shows how successes occurred. The window of opportunity offered by the crisis played a key role. The common atmosphere created by the GFC and the tiresome work of fighting against the crisis meant that resistance was not high. The DPER also reorganised institutional structures to meet its objectives. One example is the annual ‘away days’ held by DPER, which provided a platform for those at middle-management levels and above to hear from the outside and communicate public responses and media coverage about the reform. This helped the new department obtain feedback and adjust its strategies accordingly, which minimised the cost of the reform. It also fostered a bottom-up approach and brought in more opinions from diversified sources across levels. A new culture was thus able to form when time and space were created for the once-isolated top civil servants and the rank-and-file members to communicate and debate.

MacCarthaigh documents and analyses the organisational reform and rationalisation to reduce the size and cost of the public sector. Decentralised and individual sectors can make more efficient decisions pertaining to their specific functions or contexts. However, the advantage of shared services is also recognised by the reformers. The detailed description by MacCarthaigh shows the evolution of organisational forms, especially the incubation and birth of new offices such as the National Shared Services Office and the Office of Government Procurement, as well as regenerated offices such as the Office of the Government Chief Information Officer, previously the Centre for Management Organisation and Development. The establishment of DPER and related offices can be understood as the formation of hierarchies and networks initiated by the reformers, with these new levels and links helping to promote and facilitate the reform.

MacCarthaigh points out that this book contributes much to the academic analysis of state retrenchment. In fact, it also contributes much to studies of government growth – not in terms of spending but in terms of bureaucratic size. To retrench the state, new departments and offices were established and officials and officers were renewed generally. During the reform, the number of staff in DPER grew from 300 at the end of 2011 to almost 900 by the end of 2014. It is also noted by MacCarthaigh that a number of interviewees expected DPER to reduce its staff like the other departments, but DPER did not. Hence, when MacCarthaigh documents the government shrinking, he is also revealing a process of resource and power reallocation.

The general result of the Irish public sector reform was critical to Ireland and has been deemed to have saved Ireland in time. However, MacCarthaigh argues that overall assessment of the reform is almost impossible as reform success varies across issues. For example, MacCarthaigh shows how the cuts to pay and pensions evolved: at the beginning, pay and pensions were cut for officers of lower pay; after reaching agreements based on negotiations, pay and pensions were cut for all levels of officers, with a lower reduction rate for lower-ranking staff and a higher reduction rate for higher-ranking staff. Though not emphasised by MacCarthaigh, this sets a good example for other countries to reduce public expenditure in a vertically equal way.

The Irish government also took advantage of the opportunity to reform the public sector regarding ‘openness, transparency and accountability’. For example, the government made their data and performance information available through Irish public service bodies, though this did not receive sufficient media attention according to MacCarthaigh’s analysis. These reforms might be useful for countries that have heavy burdens in supervising government or business activities.

As it takes time for specific strategies to show their success, the analysis leaves room for future research to evaluate the performance of these and to explore the politics behind the specific decisions where there were alternatives. For example, when disposing of state assets, four assets were finally decided upon to be sold: the company Bord Gáis Energy (BGE, the customer supply and distribution part of the state company Bord Gáis Éireann); some of the non-strategic assets belonging to the electricity company Electricity Supply Board (ESB); forestry rights belonging to the state forestry company Coillte; and the state’s minority shareholding in the former national airline Aer Lingus. The process of how those four assets were decided can be further studied. Selling the assets to gain money in the short-term was a strategy reluctantly adopted by the reformers. Hence, the long-running impacts of this project are still to be evaluated.

In all, Public Sector Reform in Ireland documents and analyses the complexities of whole-of-government reform to counter the financial crisis using the single case study of Ireland. Cutbacks are always tough work. MacCarthaigh shows how the Irish government reduced its spending and reformed its public sectors. These successful experiences can be adopted by other countries after adaptation to their specific context. The findings can also be compared to cases in other countries to generate some common knowledge about cutback management studies.

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Note: the above was originally published on LSE Review of Books.

>About the Reviewer

Yao Han, PhD in Quantitative Social Sciences Program, School of Politics and International Relations, University College Dublin, 2017; Researcher, Geary Institute for Public Policy, University College Dublin, 2012-17; Visiting Research Fellow, Department of Asian Studies at the Hebrew University of Jerusalem, February – May 2017; Research Fellow, Dublin European Institute, June 2017 – . Currently she is a Visiting Research Fellow at the School of Public Policy and Management of Tsinghua University. She wishes to thank Dr. Rosemary Deller for her edit. Twitter: @hanyao_sara. Read more by Yao Han.

The Guardian view of Philip Hammond and Airbus: stand tall for jobs | Editorial

In his big speech this week the chancellor made a general case for soft Brexit. The Airbus disinvestment threat shows that he must sharpen his game

Two years ago this week, Britain voted to leave the EU. One year ago, the chancellor of the exchequer’s annual Mansion House speech was cancelled because of the fire at Grenfell Tower. On Thursday, Philip Hammond went ahead with this year’s speech to the City. And it was almost as if Mr Hammond had mistakenly brought along the kind of speech he might have given 12 months ago, when the Brexit process was in its infancy. But Brexit is not in its infancy. It is approaching the point of no return.

True, Brexit was inescapably central to the chancellor’s prudent case this week. But the content of his speech was of an almost wholly general kind: he wanted a good deal, to protect markets from uncertainty, to uphold low friction borders and open markets, to construct an enduring partnership that recognises that Europe is Britain’s most important trading partner. He could – and would – have said all of this in 2017.

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Enough Brexit fairytales. In the real world spending must increase | Phil McDuff

Leaving the EU won’t result in a bonanza for public services but neither will it plunge them into renewed austerity

Theresa May has spent the weekend trying to convince people that there is such a thing as a “Brexit dividend” with the dead-eyed look of a minimum-wage sales assistant trying to get you to sign up for the extended warranty. It’s obvious nonsense even she doesn’t believe in, but her job depends on going through the motions, so go through them she will.

May’s newly announced NHS spending promises come with the vaguest funding plans possible. She announced yesterday that “as a country taxpayers will need to contribute a bit more, but we will do that in a fair and balanced way,” which could mean almost anything. Mostly, though, she is relying on the notion that money we used to send to the EU will be freed up for other things. This claim has been comprehensively, utterly debunked ever since it first appeared on the side of Boris Johnson’s infamous bus. The Office for Budget Responsibility and the Institute for Fiscal Studies have both pointed out, again, that it won’t happen and has no relationship to reality. It’s a lie, and at this stage it’s not even a very good one.

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The Guardian view on the NHS cash plan: the Brexit dividend claim is a lie | Editorial

Theresa May is pandering to her pro-Brexit supporters. The important public finance issue, which is unresolved, is whether to raise taxes or abandon austerity – or both

When she was interviewed on Sunday’s BBC One Andrew Marr programme, Theresa May knowingly and dishonestly suggested that leaving the European Union was the central dynamic behind her new NHS spending pledges. Having started by saying she was determined to secure the NHS’s future, she immediately invoked the shoddy Brexit campaign bus slogan of 2016 with implied approval. Then she talked about the money Britain would save by leaving the EU; finally she deliberately spoke in ways that would lead any unwary listener to assume that a so-called “Brexit dividend” was the windfall that enabled her to make the new spending pledge. Characteristically, Boris Johnson was even more mendacious, calling the pledge “a down payment on the cash we will soon get back from our EU payments”.

All of this was a lie. It disgraces Mrs May to tell such a whopper. True, by the time that she gave her speech on NHS spending on Monday, her words were rather more circumspect; the essential deception nevertheless endured. “Some of the extra funding” will come from money that now goes to the EU, she said at London’s Royal Free Hospital, “but the commitment I am making goes beyond that Brexit dividend.” That is true with bells on, since the NHS pledge dwarves any future savings on the UK’s Brexit payments.

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Sustainability: the invisible common ground between the Italian problem and reforms in Europe

According to Marc Brightman, the problems of migration and economic stagnation, often referenced as the causes of the votes for Brexit or populist parties in Italy, should be treated together as part of a single problem of sustainability. An opportunity…

Understanding populism: What role do crises play in the growth of Euroscepticism?

Three distinct crises have hit the European Union in the last decade: the Great Recession, the migration crisis, and Brexit. As Andrea L. P. Pirro explains, there has been a widespread assumption that populist parties with Eurosceptic profiles have been the main political beneficiaries from these crises. But there still remains much to be understood about what populists make out of such crises, as well as their impact on Euroscepticism.

The waking of the populist giant has become a contemporary mantra. Since the breakout of the Great Recession, non-academic observers have often subscribed to alarmist views regarding a populist backlash in advanced democracies. But various kinds of populist forces have in fact become permanent fixtures of European party systems over the past two decades, suggesting a more balanced outlook on the relationship between populism and ‘crisis’ is called for.

A recent cross-national study covering 17 European countries has already cast doubt on the notion of clear and homogenous elements propelling the fortunes of populist parties in the shadow of the Great Recession. And yet, addressing crises as mere background conditions seems to tell us little about what populists actually make out of such crises. A forthcoming special issue of Politics, guest-edited by Paul Taggart, Stijn van Kessel, and myself, specifically delves into the relationship between populism, Euroscepticism, and crisis.

Featured image credit: Thomas L. (CC BY-NC-ND 2.0

The unfolding of the Great Recession, the migrant crisis, and Brexit posed serious challenges to the European status quo and the integration model propounded by EU elites. The specific breadth of these crises nonetheless offers important opportunities for students of populism. First, they helped elevate the concept of crisis to a central component in the analysis of populist discourse. What better occasion to bring ‘crises’ back into the analysis of populism than a prolonged period of crisis? Second, by making reference to crises that are European in character and scope, we could see how opposition to supranational elites fits into the discourse of crisis articulated by populist collective actors. In essence, we could monitor the evolution of populist Eurosceptic discourses as these crises unfolded. The underlying assumption is that, in the face of the recent European crises, anti-establishment forces might have an extra incentive to harden their Euroscepticism and, thus, blame the European elites on the basis of a composite (i.e. broader) set of arguments.

A first enquiry into the populist radical right’s stances on ‘Europe’ showed no uniform reactions to the Great Recession. Taken together, populist radical right parties did not unanimously advocate withdrawal from the single currency, nor the EU. While most parties were indeed seen to harden their Eurosceptic stances, very few went as far as advocating exit from the EU. Most notably, however, the economic and financial crises prompted members of this party family to move beyond their cultural framing of European integration and centre their criticism (also) on socioeconomic arguments. By shifting the focus on the broader set of (left-wing, centrist, and right-wing) populist parties, and extending our enquiry to all three crises, we could a) see how the EU is used in the critical and oppositional discourse of populist actors; and b) establish if and how these discourses have reverberated across the party-political arena.

The varying nature of the crises reflected differently on the populist framings of ‘Europe’. Populists criticised the EU for the harmful socioeconomic consequences of austerity; the threat to national sovereignty, security, or cultural homogeneity posed by non-EU migrants; the upholding of a distant and undemocratic system of governance; or a combination of the above.

The different crises thus expanded the range of Eurosceptic frames typically employed by populist parties, allowing them to intensify or highlight their Eurosceptic arguments and to adapt their framing of European integration as each crisis unfolded (see the table below for a categorisation of populist Eurosceptic frames). Even so, left-wing populists preserved the socioeconomic framing of their Euroscepticism. Conversely, the Great Recession offered right-wing populists the opportunity to elaborate on similar discourses, only to return to a cultural framing of Euroscepticism at the peak of the migration crisis. The M5S in Italy had been one case of a populist party flirting with cultural framings beyond clearer left-wing and right-wing ideological distinctions.

Table: Populist Eurosceptic frame categorisation

Source: Pirro and Van Kessel (2018)

In terms of impact, the mainstream remained remarkably resilient against populist Euroscepticism. The cases of higher impact had been those most affected by the economic crisis, or Brexit – as in the case of the UK. In these cases, populist Eurosceptics had been either able to instigate competition on ‘Europe’ or leave a mark by means of the specific weight gained within respective party systems (e.g. Portugal and Spain).

Although the three crises helped increase the relevance of European affairs in public debates, we should not be too quick to assume that the EU and European integration have automatically turned into the central battleground for political contestation. This holds for populists and non-populists alike, who still fall short of placing ‘Europe’ at the core of their concerns. As a result, we should not uncritically treat the advancements of populist Eurosceptic forces as a metric of public disenchantment with the EU. Instead, we should treat them as an ever-louder alarm signalling growing fatigue with traditional parties and established politics, which may have proven to be unprepared, or unfit, to respond to the serious challenges posed by multiple crises.

This article first appeared on EUROPP – European Politics and Policy. It represents the views of the authors and not those of the Brexit blog, nor the LSE.

Andrea L. P. Pirro is a Postdoctoral Research Fellow at the Department of Political and Social Sciences, Scuola Normale Superiore. He is the author of The Populist Radical Right in Central and Eastern Europe: Ideology, Impact, and Electoral Performance (Routledge, 2015) and has edited three special issues.

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