No time for pie in the sky: voters must question election promises

With a general election decidedly in the air, it is a good time to reflect on the last four to five tumultuous years of dealing with the economic crisis. At times it made me wonder could the political system survive and cope with the economic challenges that had to be addressed.

The real challenge was, in a sense, not the crisis itself, but the belief that there was some easy alternative to dealing with it. For example, consider the use of the term “austerity”.

What we as a nation had to do was stop spending money we did not have. And in fact we have not done it yet. We simply reduced, granted substantially, the amount of expenditure funded by money we do not have. There was, and is, no alternative for the State.

You could argue that it could have been done differently. And of course some people fared much worse than others during the adjustment years. However people in Ireland, on average, are extremely well-off today, with one of the highest standards of living in the world

The furore over water charges is an illustration of how ludicrous the political debate can become. A charge of less than €2 a week on average was almost blown into a full-scale political crisis.

Which brings me back to the reality that economic policy has to be effected in the cauldron of the political market place.

Various stakeholders pursue often conflicting agendas, not with the good of the nation necessarily at heart but self-interest. There is nothing wrong with this, of course. The issue is to accept this reality and see how its most destructive consequences can be mitigated.

The primary goal of politicians is to be re-elected and, if possible, be in government. To achieve this they must cajole and persuade the electorate to vote for them. The story will be that their concern is the wellbeing of the Irish nation, but it is not, unless it can gain them re-election.

What politicians promise will be influenced by the level of information the electorate acquires and the effort voters make to understand it.

Often in the past, politicians who faced the electorate with reality were simply not elected. This happened in particular in the 1980s and again more recently. Are we about to have a repeat of this coming into the next general election?

What can you do though if the electorate wants to believe in something other than reality? The slogan in the 2011 Irish elections of “Frankfurt’s Way or Labour’s Way”, and the recent Greek elections highlight this dilemma.

Personal agendas

Even if the electorate is well-informed and politicians do respond to voter wishes, we still have the problem that policy has to be implemented by public servants. And they, like all of us, have their own agenda, understandably. Even the term “public servant” implies a life dedicated solely to the needs of society.

However, most public servants are not driven by such motivations, unless the pursuit of these enhances their careers. Their concern, as for everyone else, relates to salary, working conditions, promotion and job satisfaction.

But do we have checks on all of this? The media, interest groups, freedom of information, independent regulatory/supervisory bodies surely are good checks on the system?

To an extent. The media though is driven by its own agenda, again understandably, which is maximising readership and audiences in their particular markets.

Interest groups can totally distort the democratic process, especially if the issue they campaign for is local and in a marginal seat.

We all know the failure of regulatory and supervisory bodies in dealing with, for example, the banking collapse and the loss of competitiveness in the years up to 2007. Existence does not necessarily mean implementation.

Yet, despite all the conflicting stakeholder interests in the political market place, the system has survived and, in the case of Ireland, delivered on stability and high living standards for the vast majority of the population.

But it was close to collapse at times in the last six years, especially as populist politicians and commentators suggested some easy solutions to very complex problems. It was in fact much too close to collapse for comfort.

How can we prepare, then, in a better way for the next general election? Three things recommend themselves.

First, understand fully the reality of the political market place and its various players as outlined above and take corrective action to avoid it being too much misaligned with the pursuit of the common good.

Second, drive home again and again the message that there are no simple solutions. A billion euro more spent on health for example has to come from somewhere else and to suggest otherwise is downright misleading. Too often the retort is to say introduce a new wealth tax or similar, the effects of which are totally ignored and/or unknown.

Last – and something advocated recently by at least two commentators in this paper – it is vital to have independent verification of the cost of election promises.

Full implications

Not only the initial cost should be calculated, but also the likely scenario of other consequences should be outlined. For example, increasing the higher rate of tax might bring in so many millions of extra revenue, but to what extent might this lead to a flight of talented labour from the Irish economy?

First-year students of economics learn very early on that the benefits of the market system depend on choices being made with full information. The same applies with even greater force to the political market place.

And that political market place has already swung into full gear for the next general election.

John O’Hagan is professor of economics at Trinity College Dublin