Tag Archive for 'Progressive Democrats'

Ireland’s Economic Collapse And The Need For Ideological Politics

“The dangers arising from the potential bubble in the housing market are significant. […] it could turn an external shock in the Irish economy into a cause of major trauma.”

Sensible economic commentary hasn’t been as rare as most people think over the past decade or so. The above quote, to give an example, is from the Economic and Social Research Institute’s Medium Term Review published in October 1999. The ESRI, who were set up by the government as a semi-independent body to provide research and advice, were quite clear in their recommendations at the time; abolish mortgage-interest relief, slow the increase in public-sector wages, and run a large budget surplus. Most independent economists, mindful of the fact that our membership of the Euro required a change in fiscal policies, would have given pretty much the same prescription for long-term economic stability.

Of course, I don’t have to tell you that the government ignored this advice. Since the bubble burst, many well-informed commentators have shown in great detail how successive Fianna Fail led coalitions have led the country down such a disastrous economic path. What these commentators often fail to point out, though, is just how important a role the opposition parties have played in facilitating our national downfall.

Fine Gael and Labour are currently enjoying a surge in popularity, where the main cause of this surge has been, understandably enough, their not being Fianna Fail. Indeed, opposition TDs spend most of their time these days campaigning against Fianna Fail, rather than for their own party, with the clear underlying implication that they wouldn’t have made such a complete mess of things had they been in office themselves. Unfortunately for the opposition parties, who are happy to rely on unsubstantiated counterfactuals, the evidence for this implication doesn’t really hold up. Over the past decade both parties have repeatedly promoted economic policies almost indistinguishable from those pursued by the government.

Take mortgage-interest relief as a prime example. Since formally joining the Euro in 1999, Irish interest rates have been decided by the ECB, and any sensible economic commentator would have pointed out that these rates were too low for the rapidly growing Irish economy, and needed to be offset by appropriate fiscal policy to prevent, among other things, a long-term property bubble. The ESRI and others correctly pointed out that mortgage-interest relief, the practice of subsidizing mortgage repayments, was having exactly the opposite effect; by lowering the effective interest rate, it was inflating the bubble even further. The scheme, which at its peak cost the state €500 million a year, was possibly the most damaging of any of the government’s economic policies, and experts made repeated calls for its abolition.

One would think, with Fine Gael and Labour’s claims to economic responsibility, that they have spent the past 13 years opposing such reckless policies. In fact, far from calling for the abolition of mortgage-interest relief, the two parties actually made repeated calls for its expansion, as well as promoting a wide variety of other schemes that would have inflated the housing bubble even further. Of course, these policies were always easy to sell to the electorate; with property prices rising, they all claimed to make it easier for people to afford homes, even though their real effect was far less benign.

The same pattern manifested itself in other areas of economic policy; where experts advised moderation in tax cuts and spending increases, and the running of a large budget surplus, the election manifestos of the main parties in both 2002 and 2007 consisted largely of competing claims as to which party would at the same time both tax the least and spend the most. Instead of voicing the flaws in government policy and acting as a counter to economic short-termism, the opposition parties were in fact bolstering it, by not giving the public any other option.

This almost complete homogeneity of opinion isn’t a modern phenomenon in Irish politics, either. Time and time again, studies have shown that Irish voters don’t distinguish between parties on the basis of policy. Not only is this true for Fianna Fail and Fine Gael, who have their roots on either side of an issue no longer relevant to Irish life, but it’s been shown that even the supposedly centre-left Labour Party and now-defunct centre-right Progressive Democrats attracted voters that were effectively indistinguishable from each other in terms of their stated ideological preferences.

There are likely many causes for this lack of ideological cleavage in Irish politics, ranging from the then ideological Labour Party’s decision not to contest the 1918 and 1921 elections, to our electoral system which favours local, rather than national politicians. Regardless of these, though, there can be only one solution that would provide us with a political system where parties offer genuine choice, and opposition parties effectively counter the complacency of governments, and in the end this solution relies on us, the voters.

As citizens we have failed ourselves, and our nation, for too long, voting for local fixers instead of national statesmen, supporting parties that peddle comfortable lies instead of uncomfortable truths. We must take it on ourselves to seek more from our elected representatives than simply not being the people who got us into this mess; they should be men and women of expertise and genuine conviction, and it is our duty as voters to demand this of them. If we fail to do so, we may still eject Fianna Fail from government and punish them for their failings, but we will have done nothing to tackle the political culture that allowed them to make such mistakes, and will inevitable allow future governments to do just the same.

Just How Proportional Is Proportional Representation?

This is the first in a series of posts I’ll be writing on electoral reform, based on a submission I sent into the Joint Oireachtas Committee on the Constitution recently. You can find the full series by clicking here.

When Proportional Representation by Single Transferrable Vote (PR-STV) was first established as Ireland’s electoral system in 1921, it was presented as an alternative to the first-past-the-post  (FPTP) system employed in the UK. The main reason that the new system was adopted was that, as its name suggests, it is more proportional than FPTP, in that the number of seats each party wins should be roughly proportional to the share of the vote they receive. While PR-STV has certainly improved from FPTP in that regard (not a difficult feat, as FPTP is particularly disproportional), it is worth noting that Ireland was the first country to implement PR-STV in national elections, and hence there was little evidence at the time it was chosen with which to analyze its proportionality. With almost a century of elections now held under the system, however, there’s now a considerable amount of data with which to examine whether PR-STV fulfils its purpose of proportionality.

The above graph shows the correlation between the proportion of national first-preference votes (FPV) a party receives and the number of seats it wins as a result. It is based on the results of every party in every general election held since 1981 (the first 166-member Dáil), and each point on the graph represents a party’s result in one of those elections. The dashed red line represents a perfectly proportional allocation of seats according to national vote.

What’s immediately visible about our current PR-STV system from the graph is how it benefits the larger parties compared to a perfectly proportional system. In only one outlying case did either of the state’s two large parties win less seats than would have been allocated proportionally (FG, 2002), and in every other election they received a bonus from the PR-STV system. For Fianna Fail in the 1997 and 2002 elections, this bonus gave them an extra 12 and 13 TDs, respectively, over their representation in a purely proportional system.

The PR-STV system, as currently implemented, likewise disadvantages smaller parties.  The second graph is enlarged to only show the results of parties that received less than 8% of the national FPV. It can be seen that in the considerable majority of cases, parties in this bracket win less seats than a proportional system would allocate them. Furthermore, there are often large variations in the number of seats won on a similar proportion of the vote. For example, between the 1992 and 1997 elections, the Progressive Democrats went from 10 to 4 seats, despite receiving exactly the same proportion of the national vote on both occasions (4.7%). In a perfectly proportional system, they would have won 8 seats in each election.