Ireland The Changing Role of the National Economic & Social Council Rory O’Donnell Director National Economic NESC Social Council NESC

Late development Industrial strategy Social Partnership Ireland is interesting because

Late development Industrial strategy Social Partnership Ireland is interesting because 19thC de-industrialization & population collapse Protection, , failed because of small, poor, peripheral, home market Remarkable convergence

Late development Industrial strategy Social Partnership Ireland is interesting because Since 1960, industrial development with activist public agencies focus on: exports inward investment European integration S&T and innovation ‘Networked Developmental State’

Late development Industrial strategy Social Partnership Ireland is interesting because Inherited sterling & UK industrial relations From 1987 to 2008 used social partnership institutions & agreements to manage key macro, wage & supply-side issues Crisis since 2008: unilateral government action & collapse of national partnership

NESC 1.The role of an ESC reflects the national development challenges & is often shaped by crises in strategy & politics 2.The institutional design and organisation of the ESC matters 3. Traditional forms or 'representation' & 'participation', such as ESCs, face challenges Three main propositions

NESC Established 1973, without statutory basis Initial membership: employers, trade unions, farm organisations, academic experts & 5 govt departments (including Finance) Chaired by Secretary General of PM’s office Meets monthly, in plenary not working groups Serviced by small Secretariat (economists and social policy analysts – PhD & masters-level) Basic description of NESC

NESC Seeks consensus on analytical reports prepared by Secretariat or consultants, no voting Not involved in legislation or mediation Focus mostly on strategic issues and principles Widened to social NGOs in mid-1990s Widened to include environmental NGOs in 2011 Basic description of NESC continued

NESC 1.Composition: employers & trade unions OR inclusion of social NGOs & others 2.Relationship to government: independent of government or close to government system 3.Focus and conduct of work: medium-term issues & principles OR immediate, concrete, issues; plenary OR working groups 4.Nature & goal of discussion: talk OR consultation with each other & government OR dialogue with goal of agreement or consensus ESCs differ on several dimensions

NESC 1.Composition: widened to include agriculture organisations, social NGOs & environmental NGOS 2.Relationship to government: close to government system because chaired by PMs department 3.Focus and conduct of work: traditionally medium- term issues & principles, not hard business of social partners with government 4.Nature & goal of discussion: evolved from consultation to search for agreed analysis & basis for agreements with government, and recently back to consultation Ireland's NESC on these dimensions

Characterising Councils & Dialogue Dialogue & consensus Dialogue Consultation Talk Govt & business Govt, business, unions, ag. groups & academia Govt., business, unions, agriculture, academia & social NGOs Govt., business, unions, agriculture social NGOs, academia & environment

Characterising Councils & Dialogue Dialogue & consensus Ireland Ireland Dialogue Ireland Consultation Ireland Ireland Ireland Talk Govt, business & unions Govt, business, unions, agriculture & academia Added social NGOs Added environmental pillar

NESC to 1985: Prepare analysis of specific policy issues & advise government : Prepare agreed analysis to underpin three- yearly social partnership agreements : Prepare studies to assist government in crisis management & explore basis for consensus Three phases in the role of NESC

From initial growth to crisis Opening & activist policy started growth 1960s Through FDI, trade, public investment, EU but Indigenous industry lost in free trade Social need & expectations rose Sterling context meant inflation/instability Industrial relations conflict 1970s-80s US Foreign Direct Investment fell in 1980s Crisis prompted discussion in NESC 1986

Orthodox economic view : fiscal and wage indiscipline undermined business success Decline of inward investment and failure of indigenous business Excessive spending, public borrowing and wage growth

NESC analysis yielded wider view : problems of stabilization, distribution and development are connected Business damaged by fiscal and labour problems Also reflect developmental challenge of a regional economy Fiscal crisis has a developmental element Macro pressures & debates also crowd out supply- side issues

Social Partnership System 1987 to 2008 A three-yearly NESC Strategy report on economic and social situation & challenges Negotiations then conducted in PM's department Written 3 year partnership programme Mechanisms for monitoring & review – in PM's department, not NESC 8 Partnership programmes 1987 to 2008 Remarkable economic & social progress

NESC 1.articulated a shared understanding of key economic and social mechanisms 2.aligned partners to consistent and competitive actions: macroeconomic, distributional & supply-side. 3.provided framework for strategic government policy. Role of negotiated partnership programmes

NESC Joint observation of evidence, both pleasant and unpleasant Analysis that reframes a problem in a way that allows actors to see new possibilities for agreement and action Allowing a combination of bargaining, solidarity & deliberation NESC's role & method in partnership period

NESC : basis for agreement on fiscal correction & development : European integration : analytical foundations for a partnership approach to macroeconomic, distributional & structural policy : enterprise-level partnership : The Developmental Welfare State : immigration & labour standards Examples of NESC's reframing analysis

Networked Developmental State & Developmental Welfare State NDS The long-term strength of the economy now depends on industrial & effective social policy DWS Social policies must share responsibility for economic performance and participation

: growth, politics & partnership yielded Opportunist tax cuts & pro-cyclical fiscal policy Pressure for housing supply Insufficient public sector reform: training, education, health, childcare, welfare, housing, social services & transport Bargaining focus on labour standards Wage growth ahead of EU rates Unresolved issues glossed over by revenue & spending increases

Segmentation in Ireland's Social Pacts

NESC 1.To achieve deliberation & reports/advice that go beyond the lowest-common denominator & facilitate problem solving 2.To pitch the work at the right level: between high-level strategy/principles & the hard business that social partners do with government 3. To maintain relevance in the face of both 'new governance' and 'permanent austerity' Three basic challenges for ESCs

NESC 'New governance' Governments engage stakeholders directly Policy thinking closer to policy implementation Economic, social & environmental issues interact, needing inter-disciplinary analysis Policy cause & effect more uncertain 'Permanent austerity' Unilateral government action & Troika direction More zero-sum & less win-win possibilities Social partners focus on bi-lateral relation with government International instability & uncertainty Challenge of maintaining ESC relevance

NESC 1.O'Donnell, R., Damian Thomas and Maura Adshead (2011) 'Ireland: Two trajectories of Institutionalisation' in Avdagic, S. Martin Rhodes & Jelle Visser eds. Social Pacts in Europe: Emergence, Evolution and Institutionalisation, Oxford University Press, 2.Devlin, Robert & Graciela Moguillansky (2010) Alanzias Public-Privadas Para Una Vision Estrategica Desarrollo, Santiago: CEPAL & SEGIB References