ANALYSIS:THE STATE is by a very great distance the largest spender and asset-holder in all economies. That is as true today as it was when Ronald Reagan and Margaret Thatcher were in power and busy proclaiming the rollback of the state. Their legacy is far less significant than either their admirers or detractors would have anyone believe.
Of the ideological battles of the 1980s and 1990s, none was more hackle-raising than privatisation. To its advocates, it brought lower prices for consumers, a smaller burden for taxpayers and reduced the scope for governments and bureaucrats to use publicly-owned assets for their own dubious ends, such as packing semi-state boards with friends and cronies.
To its opponents, privatisation lessened the capacity of democratic governments to provide goods and services on the basis of need rather than ability to pay and exposed citizens and society to the risks of market failure, such as underinvestment in broadband infrastructure.
Overall, neither the upsides nor downsides of privatisation proved as great as anticipated. Boring, technical things such as market structure and regulatory design proved much more important than who owns assets.
Yesterday's report on the asset side of the Irish State's balance sheet is informed by these lessons and is to be filed in the middle of the shelf labelled "post- ideological". It contains a series of recommendations that are gradualistic and nothing like a radical rolling back of the State.
It envisages no sell-offs taking place until next year and warns of revenue-depressing risks associated with an accelerated disposal programme.
It does not advocate selling the most valuable holdings - the electricity and gas networks - because of the risks involved, even if its authors acknowledge other countries have made a success of selling networks of wires and pipes to private operators.
The report advocates keeping land in State ownership but privatising enterprise that takes place on it, such as Coillte's forestry management business.
It estimates the total amount to be raised from disposals is a maximum of €5 billion - not much more than a drop in the bucket considering the State's gross debt is heading towards €200 billion.
Its most far-reaching recommendations relate to changes to the regulatory framework and management of semi-States.
It recommends that a full review of regulatory agencies be conducted; that the Department of Enterprise, Trade and Innovation be made the parent ministry for all regulators; and that a "permanent in-house capability" be fostered so that supervision, performance measurement and legislation affecting regulators is improved.
Noting the limited dividends semi-States have paid into the State's coffers, it proposes a specialised unit be established in the Department of Finance to ensure that the State's interests are more effectively pursued and that "at least 30 per cent of profits" be handed over to the exchequer annually.
These proposals are so eminently sensible that it is difficult to understand why they were not put in place long ago.
Despite the report's remit being shaped by the budgetary crisis, its lead author, economist Colm McCarthy, said yesterday he and his two co-authors would not have written a substantially different piece of work had the economic backdrop been more normal.
The reason for this, the report states, is because "the promotion of long-term growth" should "clearly" be favoured over short-term revenue raising.
Although it is very likely that the bailout troika will agree with this, their view of what promotes long-term growth may differ. If it does, they could arrive at different conclusions about the scope and speed of asset disposals.