Economist delivers timely warning amid criticism of boom-time failures

BOOK REVIEW : Ireland, Europe and the World: Writings on a New Centuryby Dan O'Brien Gill Macmillan 307pp; €24.99

DAN O’BRIEN, as befits a member of the Economist Intelligence Unit’s editorial team, has produced a very readable series of essays and articles culled in the main from various journalistic pieces written for Irish newspapers over the years.

His strongest pieces tend to be those where he is being trenchant about the failure to control public spending during the Celtic Tiger years. However, like many others, he makes this argument without reference to the beneficial physical and social infrastructure built during the same period.

Another target of O’Brien’s criticism is the partnership process between the Government, farmers and the trades unions. His belief is that the entire process is outmoded and more importantly a force for inertia rather than movement in Irish economic life. There is validity to his criticism that it has allowed the Irish public service to become too costly, rigid and to avoid appropriate accountability mechanisms. However, the author’s prescription for reform is a little thin and seems to boil down to hiring more economists, specialist expertise and giving additional powers to the Comptroller Auditor General.

The book points to the Industrial Development Authority (IDA) as a good example of a public service organisation that not just performs well, according to its mandate, but actually manages to excel. It is remarkable the professionalism of this organisation over the years through a succession of very brilliant chief executives. Even in these straitened times the IDA continues to leverage inward investment gains of some significance, in particular in the high-tech sector where there is an investment in RD. Whether the IDA represents a model for wider public service reform is a moot point but certainly lessons could be learned from its structure, culture and leadership.

O’Brien lays the blame for the catastrophic Irish property price collapse firmly at the door of Anglo Irish Bank. There is no doubt but that Anglo’s reckless property loans did overheat the market but this is a tad simplistic given that nothing is said about the role of the British banks and their late entry into the Irish property-lending business and its effect in the period post-2005 in creating a form of hyper competition between all banks on loans to the construction sector.

O’Brien’s narrative sweep contains a timely warning about the Irish predilection to introspection, isolationism and a resistance to new ideas. He makes the point that our lack of knowledge and appreciation of the benefits that multilateral institutions, such as the European Union, bring to Irish life represents a significant threat to a country so dependent on external trade and investment.

The author is critical of the “parochial” nature of Irish public life and recommends changes to our system of election and the Dáil itself. He also articulates the case for a greater degree of separation between the legislative branch and the executive or government – a point with which I also agree. Another good point about this book is that it nails a number of popular myths that grew up around the boom years, most notably that old canard that the rich got richer and the poor got poorer. For the record, income inequality declined quicker in Ireland than in any of the other 15 original EU member states.

All politics is local, goes the famous quote from the now deceased speaker of the US Congress Tip O’Neill, but O’Brien’s depiction of our political system as being too local in its emphasis is correct. Peter Sutherland expressed a similar view in an interview during the Lisbon referendum campaign. O’Brien suggests a change in the electoral system.

Conor Lenihan TD is Minister for Science, Technology Innovation. He also has responsibility for natural resources and the knowledge society