World View: The case for a new type of social partnership

Ireland is an outlier on many listings of international development among comparable states. Irish spending on research and development is low; health outcomes are bad compared with spending in the sector; educational spending and outcomes at third level are sub-optimal; the overall tax take is low; local government is relatively ineffective; and we have one of the most centralised executives in the OECD.

Systematic comparison of such deficits is another shortcoming in Ireland’s policy discourse. While the UN’s Human Development Index regularly places Ireland among the world’s top 10 countries, there is often a failure to identify where it can best learn comparable lessons for improved performance.

A striking aspect of polling during the election campaign was the extent of public demand for improved health, educational, employment and housing provision, as distinct from tax cuts. But how to go about securing them and where to look for lessons often elude policymakers and analysts alike. It seems to indicate an intellectual failure to think originally about Ireland’s comparative record.

Such concerns animate a stimulating new study of our predicament by David Begg, former general secretary of the Irish Congress of Trade Unions. His book, Ireland, Small Open Economies and European Integration: Lost in Transition, compares Ireland's development with that of Finland, Denmark and the Netherlands since the 1980s.

Influenced by the great scholar of comparative political economy and politics, Peter Katzenstein, who looked at how these and other small European states handled their insertion into world markets, Begg concentrates on the "democratic corporatism" Katzenstein identified as the key factor. This is defined by an ideology of social partnership; a centralised peak structure of interest groups; and continuous political bargaining between the state bureaucracy, political parties and these interest groups.

Crisis circumstances

Begg recalls Ireland’s record of similar partnership from 1987 to 2009, when the system collapsed in crisis circumstances. He investigates why it was not more embedded and resilient, and laments its passing. He advocates a return to this well-proven method of managing globalisation as Ireland embarks on a deeper path of European integration while Britain backs away.

This involves a systematic comparison of Ireland’s development record with that of the other three countries. They are northern European states, mostly Nordic ones, with a longer and more developed social-democratic tradition than Ireland’s. Begg believes they have much to teach us about the ability to weather the contemporary pressures on smaller states, and in particular about being able to institutionalise so as not to be exposed to fickle changes of government.

Institutionalisation happened in Ireland, too, in those 22 years, but Begg’s analysis shows that social partnership here was more pragmatic and lacked the intellectual underpinning seen in Finland, Denmark and the Netherlands. Such a deficit reveals a lack of strategic engagement, based on a failure to grasp what the whole European integration project is now about. Our political system discourages such inquiries.

Close to Germany

Begg’s three comparator states are close to Germany, are even its satellites. Ireland’s long struggle to escape British domination through European engagement has now culminated in the reality that Britain will not join the euro and may leave the EU. In that case, Ireland can no longer share a path with it but must adjust to a

Europe

dominated by German rules. For a small state such as Ireland, that mean a return to democratic corporatism, Begg argues.

His book sets out political, social and industrial reforms to achieve this, embedded in a framework of negotiated change. It is a political statement, informed by a social- democratic commitment. His research draws on interviews with figures in each of the relevant states. The Irish ones are spicy and frank. They are framed by John Bruton’s conviction that Ireland’s elites lack the skill to question policy philosophically.

Begg's account is longer on domestic change and internal disciplines than on alternative European approaches to Germany's. There is little mention of the southern comparators in Greece, Spain and Portugal, with which we have shared austerity. As the Economist puts it, we are similarly fragmented by our election result. The north- south cleavage in Europe needs to be tackled by more comprehensive debt write-offs and sharing than the Germans contemplate. Thinking that through is also part of Ireland's intellectual task.

This book is doubly welcome for its analysis and questioning of these deficits and policy shortcomings, based on systematic comparison and advocacy.

pegillespie@gmail.com