Opinion: Irish policy mindset needs to accept that decentralisation of control and responsibility for business development to city regions, towns and rural areas is essential to deliver sustainable economic growth
In a short time, the government will launch its Ireland 2040 - National Planning Framework (NPF) plan. To plan until 2040, we need to learn from past mistakes. Despite some successes, there have been recurring policy failures. The most recent of these resulted in the ignominy of a bail-out. Future threats such as Brexit and corporation tax competition are also challenging so it must be hoped that policymakers will not revert to "business as usual".
Since the 1970s, the dominant policy mindset has had some notable economic development successes by attracting foreign-owned businesses to set up in Ireland. However, there have been two major policy weaknesses: a failure to develop critical masses of domestic businesses and an inability to say no to unproductive vested interests.
If these weaknesses were to be addressed, the NPF would be concerned with both identifying the key sectors that will drive prosperity for the next 23 years and where these sectors would be located. Attention would also be given to the governance arrangements required to fulfil Ireland's growth potential.
Unfortunately, there is scant evidence that these questions are being addressed by our policymakers. Their omission suggests that the dominant policy mind-set hasn’t changed and is floundering in dealing with the challenges of planning Ireland’s economic development to 2040. Mindsets become deeply entrenched in organisations over many decades and political systems are also remarkably slow to change.
One problem is a lack of joined-up thinking. The NPF is being delivered through the Department of Housing, Planning and Local Government, which is not directly responsible for economic development, but for planning and local government.
Other key departments have distinctive inherited policy mind-sets. The Department of Finance oversees national growth and its over-riding emphasis is on short-term performance of the economy. The departments of Jobs, Enterprise and Innovation; Agriculture, Food and the Marine and Transport, Tourism and Sport are also highly specialised and are responsible for supporting Ireland’s internationally competitive sectors such as ICT, pharma, financial services, food and tourism.
Of course, the NPF must be ratified by the cabinet, but the vagaries of the Irish political system will continue to play a negative role. Regardless of who is governing, the time horizon of politicians is limited to the next election. Added to this is the problem of clientelism, where national politicians are prone to favouring local and sectoral agendas at the expense of national ones.
Ireland is one of the most centralised countries in the developed world. Institutional specialisation in centralised institutions has become a disintegrating force, as can be seen by the poor quality of public services delivered. Genuine decentralisation of control and responsibility for business development to elected local authorities in city regions, towns and rural areas is necessary in order to deliver more sustainable Irish economic development for the next two decades.
Decentralisation is crucially important in the area of economic development. Developing critical masses of internationally competitive businesses is key - and deciding where these businesses locate and how locations help or hinder their competitiveness is of utmost importance.
There is a strong international consensus that city regions have the greatest potential for hosting most internationally competitive sectors and that cities, towns and rural areas require distinctly different policies in order to fulfill growth potential.
Yet the Irish policy mind-set is not showing any signs of taking up this important challenge. Decentralisation is crucial because local people are best at harnessing local potential to build concentrations of successful businesses, which are key features of building successful locations that drive prosperous countries. Acting on this principle will help address one of Ireland’s key weaknesses, which is its inability to develop critical masses of world-class home-grown businesses.
If a genuine economic development agenda was being pursued, we would first decide on the urban hierarchy. Clearly Dublin is and will remain at its head, but the capital’s spatial spread has been excessive, principally due to poor planning.
We need to decide on a small number of second tier cities. Boundary disputes should be ended and meaningful city regions defined for Cork, Limerick, Galway and perhaps Waterford. Many rural areas, whether coastal or inland, have more in common with other rural areas than with our cities. As a result, they need an integrated rural development strategy.
Secondly, new institutional arrangements are required to promote bottom-up business development, which is a key driver of future Irish economic development. Implementation at the level of cities, towns or rural areas requires decentralisation of control and responsibility for business development to elected local authorities with tax-raising powers. The success of an elected mayor in our cities and elsewhere would, at least partly, be contingent on successful delivery of local business development plans.
Professor Eoin O'Leary is the chief organiser of Policy Forum: Re-thinking Irish Economic Development (UCC, November 3) at which this and other issues will be discussed. Place are limited and those who are interested in attending should register on the website. The views expressed here are those of the author and do not represent or reflect the views of RTÉ
