Four broad phases in the history of Irish social dialogue and the role of NESC can be identified:
From 1960 to 1987: the creation of social dialogue and the struggle to achieve a •
disciplined system of industrial relations and sustainable public finances;
From 1987 to 2008: a period in which social partnership was central to government •
From 2009 to 2012: a period of severe fiscal, banking and economic crisis in which •
social dialogue played little if any role in the overall policy process;
From 2013 to the present: a gradual re-opening of policy possibilities and NESC par- •
ticipation in exploration of post-crisis policy and reform options.
These four phases can be understood by reference to the historic challenge of the de- velopment of a small, post-colonial, largely agricultural economy on the periphery of Europe.
1960 to 1987: Th e Quest for an Eff ective System of Wage Setting and Public Finances
Ireland, which achieved independence from Britain in 1922, inherited its voluntarist and adversarial system of industrial relations. After several decades of economic pro- tection, Ireland changed strategy in the 1960s, aiming to achieve industrialisation through an open economy and investment in education. In 1963, it established the National Industrial Economic Council, to provide a forum in which employers, unions and government could discuss the challenges of moving from protection to free trade. In 1973, this was replaced by NESC. Its role was to advise the prime minister on strate- gic issues of economic and social development. In its early years, it was one of the few bodies undertaking strategic, long-term, analysis of Ireland’s position and problems. Ireland’s progress in the 1960s, 1970s, and 1980s was accompanied by high levels of industrial conflict and wage inflation and an increasing tendency to fiscal deficits. Em- ployers, unions and government sought to stabilise industrial relations through estab- lishment of centralised bargaining or wage norms. Much of NESC’s work was aimed at providing information and dialogue to support this. These efforts were undermined by the macroeconomic context, particularly the high-inflation currency link with sterling, and prevailing attitudes and behaviour. Employers, unions and successive govern- ments were operating on the basis of divergent understandings of the key economic and social key mechanism and problems—including inflation, employment, wage set- ting, competitiveness, public finance and inequality. This gave rise to recurring eco- nomic crises and from 1979 to 1986 a succession of governments failed to find an es- cape from a vicious cycle of stagnation, rising taxes and increasing debt.
1987-2008: Social Partnership, a Consistent Policy Framework and Strong Growth
The role and prominence of the Council changed considerably in the late 1980s. In 1986 the Council agreed an analysis which set out the need for both tough fiscal cor- rection and enhanced action on the constraints on Irish economic development1. This 1. NESC, A Strategy for Development 1986-1990, (1986).
provided a basis on which government and the social partners negotiated the first comprehensive social partnership agreement in 1987. This facilitated fiscal correction and delivered the kind of wage discipline that had eluded the actors in earlier decades. The pact played a significant role in Ireland’s recovery; as a result, it was to be the first of eight three-year pacts that ran from 1987 to 2008. The content of these agreements widened beyond wages to include a range of economic and social policies. Each three- year cycle began with discussion in NESC of the economic and social situation, leading to the agreement of a NESC ‘Strategy report’. That report was the key input to negotia- tions between government and the partners, conducted in the prime minister’s de- partment. Once a three-year pact was agreed, and ratified within each of the pillars, its implementation was monitored by a range of partnership committees.
In the international literature on political economy Ireland’s adoption, continuation and institutionalisation of social pacts was a focus of much interest. Given its history, politics and industrial relations system, Ireland was seen as unlikely to achieve eco- nomic concertation involving government, unions and employers with centralised wage bargaining and a high level joint problem solving. In these analyses, the relative significance of various factors was much debated—including external economic con- straints, such as qualification for the euro, the strength or weakness of government and the structure of the trade union movement and its role at enterprise level.2
The Council itself reflected on the challenge of maintaining a consistent policy ap- proach, the nature of the emerging partnership system and its own role. It identified a link between the formulation of an agreed analytical understanding of economic and social problems, the implementation of a consensual approach to distributional issues and the ability of government to adopt a strategic approach as opposed to a short-term perspective 3. It emphasised that the partnership approach ‘is heavily de-
pendent on a shared understanding of the key mechanism and relationships in any given policy area’ and ‘is characterised by a problem solving approach designed to produce consensus, in which various interests address joint problems’4. This focus on
the role of institutional arrangements that support deliberation was taken up in sub- sequent comparative studies of Ireland’s partnership system and social pacts5, and
contested by analysts more committed to bargaining and power as explanatory var- iables6.
2. Avdagic, S., Rhodes, M. & Visser, J., Social Pacts in Europe: Emergence, Evolution, and Institutionalization, (2011). 3. NESC, Ireland in the European Community: Performance, Prospects and Strategy, (1989); NESC, A Strategy for the Nine-
ties: Economic Stability and Structural Change, (1990).
4. NESC, Strategy into the 21st Century, (1996), pp266.
5. Regan, A., ‘Does Discourse Matter in the Formation and Consolidation of Social Pacts? Social Partnership and Labor Market Policy in Ireland’, (2010), Critical Policy Studies, 4(3): 250-277; Culpepper, P. D., ‘The Politics of Common Knowled- ge: Ideas and Institutional Change in Wage Bargaining’, (2008), International Organization, 62(1): 1-33; Ó Riain, S., De-
tails About the Rise and Fall of Ireland’s Celtic Tiger, (2014).
6. See the country case studies and analytical synthesis in Avdagic, S., Rhodes, M. & Visser, J., Social Pacts in Europe:
The Irish experience of dialogue in NESC and social partnership also prompted reflec- tion on the kind of analysis and analyst that are required to support the work of an economic and social council. While the discussion among the actors must be based on accurate data and expertise, the analytical work of the council secretariat must facili- tate some fusion of the horizons of employers, unions and others, who have both con- flicting and convergent interests and understandings. This calls for analysts who com- bine technical proficiency with a degree of creativity. The ability to ‘frame’ and ‘reframe’ problems was identified as a key requirement for the NESC Secretariat and this re- mains so. In subsequent international research on institutional and policy change, the role of ideas and the discursive process through which they are developed has be- come an important theme.7
An important aspect of the Irish story was widening of the Council membership and partnership process beyond the employers and unions to include a diverse set of so- cial NGOs. This was initially resisted and a new body, the National Economic and Social Forum, was created in 1993, parallel to NESC. When the widening of NESC and partner- ship did occur in 1996-7, it was seen as a very significant change, since it was feared that the new organisations might not be able to manage the kind of trade-offs, and associated benefits to government strategy, delivered by the employers and unions89.
It was noted that while the inclusion of a wide range of social NGOs, of varying size and nature, posed new issues, the traditional social partners also faced challenges10. These
included how to connect their high-level work in the Council and national negotia- tions with the local action of their members and how to achieve real change through the dialogue/partnership process. In addition, across the democratic world the rela- tionship of government to non-state organisations was changing, especially where it grapples with complex supply-side problems. The overall conclusion was that the chal- lenge of opening dialogue and partnership to a wider set of social NGOs was, in large measure, bringing to the surface tasks which government and the partnership system must address anyway. The extension of the substantive agenda from macroeconomic stabilisation to supply-side issues required an extension of method, from high-level bargaining to multi-level problem solving11. An effective future for a widened social
partnership was seen as dependent on reform of the way the state understood and addressed complex supply-side and ‘wicked’ problems12. Almost a decade later, NESC
would argue that some of the, by then widely-noted, problems in Ireland’s system of policy, partnership and implementation in the years after 2000 arose because the
7. Schmidt, V. A., ‘Taking Ideas and Discourse Seriously: Explaining Change through Discursive Institutionalism as the Fourth ‘New Institutionalism’’, (2010), European Political Science Review, 2(1): 1-25.
8. NESC, Strategy into the 21st Century, (1996), pp266.
9. Restrospective accounts of the role of social NGO’s in NESC and social partnership can be found in Larragy, J. Asym- metric Engagement: The Community and Voluntary Pillar in Irish Social Partnership, (2014), and Ó Broin, D. & Murphy, M. Politics, Partnership and Power: Civil Society in Public Policy in Ireland, (2013).
10. NESF, A Framework for Partnership—Enriching Strategic Consensus through Partnership, (1997).
11. O’Donnell, R., The Future of Social Partnership in Ireland, a report for the National Competitiveness Council, (2001). 12. NESF, see note9 above; NESC, An Investment in Quality: Services, Inclusion and Enterprise, Overview, Conclusions and
necessary changes in the public system and its mode of engagement with civil society actors had not been realised13.
Overall, we can identify four inter-related elements that contributed to NESC playing a significant role in Ireland’s strategic policy approach during the 20 year period of social partnership from 1987 to 2008:
Analysis and ideas that are rigorous, but also reframe problems in ways that allow i)
the actors see new possibilities;
A commitment to exploratory dialogue among key civil society organisations; ii)
On a problem that is recognised by government as challenging, and on which the iii)
civil society organisations can be a significant influence;
Leading to a coordinated response by government and its animation of a net- iv)
work of civil society organisations, working in a problem solving way.
These are not the only conditions in which an ESC can have an impact, and this is not the only way it can be influential. But they do provide a way of thinking about the work of ESCs, the different ways in which they can add value to public policy and the chal- lenges they face.
2009 to 2012: Crisis and Crisis Response by the Irish Government
Ireland achieved major economic and social progress in the years from 1990 to around 2000. Although economic growth continued after that, a range of international and domestic factors meant that it was increasingly driven by debt finance and dependent on an over-expanded construction sector. The social partnership and wage setting sys- tem was undoubtedly drawn into this unsustainable dynamic. When crisis hit in 2008 efforts were made to find a partnership response. There was intensive discussion in the Council on how to understand and respond to the crisis. In early 2009 the Council agreed a report Ireland’s Five-Part Crisis: an Integrated National Response. Although that report was seen as helpful in identifying the key elements of the crisis and the nature of an integrated response, it did not provide a sufficiently shared analysis to support agreement between the unions and government, particularly on the need for public servants to pay a levy towards their pensions. With the failure of the negotiated ap- proach, government acted unilaterally and, from 2010 on, in close concert with the Troika providing official funding to Ireland – the IMF, ECB and European Commission. Its actions included reduction in public sector pay, major expenditure reductions, some increase in taxes, recapitalisation of the banks and reform on a number of fronts. The Council term ended in July 2010 and a new Council was not convened by govern- ment until June 2011. Much of the institutional machinery of social partnership, such
a committees and working groups in which the social partners worked with govern- ment, was dismantled. In the context of urgent unilateral government action, NESC and other forms of dialogue with non-government actors was much less central in the policy process. In 2010, and again in 2013, government did enter agreements with the public sector trade unions, providing for cooperation with public sector reform and, in the recent agreement, further reductions in public salaries. Although this is very sig- nificant, and certainly reflects the tradition of cooperation built up over the partner- ship period, it was not the outcome of a process of collective social dialogue in the normal sense.
Once the new Council was formed in June 2011 it finalised the projects it had begun earlier, undertook ongoing work on aspects of the economic and social crisis and, in response to requests from government, embarked on work on environmental and sus- tainable development issues. A short summary of that work confirms that it involved significant change in the method and role of the Council.
Labour Market Activation Policy
The Council influential earlier study The Developmental Welfare State (2005) provided the foundation for a detailed analysis of Ireland’s labour market services. NESC’s 2011 report Supports and Services for Unemployed Jobseekers: Challenges and Opportunities
in a Time of Recession, underlined the need for reform and outlined the main character-
istics of a more effective system. This remains the most detailed study of a policy area that has subsequently become a major focus of reform.
Ireland’s Crisis and Qualifi ed Recovery
The Council continued to analyse and discuss Ireland’s evolving economic crisis. While the main parameters of strategy were defined within Ireland’s Programme with the Troika, Government asked the Council to search for practical ideas that could assist it in taking action on key challenges. These were published in a number of Council re- ports and Secretariat Papers. In those reports suggestions were made on employment creation, domestic demand and SME finance, some of which are reflected in subse- quent policy14. In The Social Dimensions of the Crisis, (2013), it drew together the evi-
dence on how the income, employment and other dimensions of the crisis were im- pacting on different social groups. While the preparation and discussion of these reports involved the social partners and others in the Council in joint discussion of evidence and a sharing of experience and ideas, they were not part of a concerted col- lective strategy involving the main social pillars and government.
Standards and Quality in Human Services
During 2011, NESC undertook analysis of quality and standards in six human services: the school system, disability services, residential care for older people, home care
packages, end-of-life care in hospitals and policing. This work was informed by inter- national thinking on regulation and standards-setting in both human services and other areas of the economy and society.15 It reported significant progress in Ireland’s
regulation, standard setting and inspection and suggested next steps in building a system of continuous quality improvement.16
Climate Change
In 2012, government took a novel step by asking the NESC Secretariat, rather than the Council, to prepare reports on climate change. This reflected a wish for new analysis and thinking in a policy area that had become deadlocked. The Secretariat worked with a wide range of stakeholders and invited the Council to discuss its draft reports. The final report, Ireland and the Climate Change Challenge: Connecting ‘How Much’ with
‘How To’, suggested a reframing of the climate change policy challenge, at both Irish
and EU level, highlighting the need for institutional arrangements to support innova- tion and learning, rather than continued discussion of targets and debates on enforce- ment.
Secretariat Work on Diverse Policy Challenges
In addition to the Council work summarised above, the NESC Secretariat has been asked to assist various government departments and international agencies in prepar- ing strategic analysis. These include preparation of a strategic review of further educa- tion and training, an OECD study on local job creation, analysis of Ireland’s high rate of jobless households and, more recently, work on a new social housing strategy.
2013-2014: Opening of Discussion on Post-crisis Policy Possibilities
The Council’s work and relation to the wider policy process continues to evolve. As Ireland moved towards exit from the Programme, attention turned to issues that had not, or perhaps could not, be addressed during the period of large-scale fiscal re- trenchment and to policy challenges and possibilities for the post-crisis period. During 2013, the Council discussed the progress of the economy and the domestic and international factors that qualify the overall recovery. Its report Ireland’s Five-Part
Crisis Five Years On: Deepening Reform and Institutional Innovation documented signifi-
cant policy action and institutional innovation in four selected areas: SME finance and investment, enterprise policy, greening the economy and activation. It urged govern- ment not to see its action on SME finance as a temporary expedient, but as a step to- wards a new relationship between finance and the real economy. The Council identi- fied ways in which these reforms might be further extended and generalised, arguing that the central challenge is to both increase innovation and accountability at the front
15. NESC, Quality and Standards in Ireland: Overview of Concepts and Practice, (2011). 16. NESC, Achieving Quality in Ireland’s Human Services: A Synthesis Report, (2012).
line and build a supportive centre capable of spreading best practice, and leading policy review and learning.
During 2014, responding to severe problems in the housing system, the Council has devoted much of its work to housing policy. Its first report in this project, Social Hous-
ing at the Crossroads: Possibilities for Investment, Provision and Cost Rental attracted con-
siderable attention and is seen as an important input to government’s formulation of a new social housing strategy.
Although Ireland is a leader in the installation of wind energy, there has been increas- ing local resistance to both the wind farms and the pylons necessary for a new smart grid. NESC researched national and international approaches to creating social sup- port and community engagement. Its report Wind Energy in Ireland: Building Commu-
nity Engagement and Social Support (2014) is an input to the government’s consulta-
tion on a new energy strategy and white paper.