WARREN BUFFETT, the renowned investor, once memorably commented that you never know who is swimming naked until the tide goes out. The Government has been confirming almost daily that it was swimming naked in the "Celtic Tide".

For all the talk about reforming the public sector, we can now see that there was no clear conception of what reform really meant. No vision of "reformed" public services was provided to guide strategic thinking and implementation, to motivate employees and to attract public support for the project.

The regular demands for "public sector reform" usually lack concreteness.

Let us ignore "reform" being used as a euphemism for "reduction", although frequently that is the intended meaning. Rarely do we see the pundits and lobbyists burdening their calls with specific details about the problems which require reform. Even less do they offer an account of the causes, surely a necessary stage of diagnosis before offering cures for symptoms?

The reform agenda is invariably couched in such generalities that even where there are issues, which in the US or UK would be considered issues of corruption or incompetence requiring reform, there is usually silence and no specific proposals are tied to them. A case in point is the university sector, where we seem to be determined to repeat the recent experience of the public sector and the Health Service Executive (HSE).

One could be forgiven for believing that the current debate about the return of fees for university education is driven by the current crisis in the Government budget - it is certainly the way the universities are playing it. The removal of fees and the repetition that they were "off the agenda" by the Government could almost have been considered a principle or core value, to the extent that such principles hold in Irish politics.

But, like the recent U-turn in the HSE, this particular U-turn needs to be considered in a wider context. It simply isn't convincing to say now that the "rich" should pay. That was the case all along and, indeed, when fees were removed.

So what happened to the argument for removing fees? Where does one look for the argument?

It defies plausibility that a newly arrived Minister at the Department of Education and Science suddenly decided to incur the likely political wrath of being the one tagged as reintroducing serious costs for middle-class voters wishing to educate their children at universities.

Is it not far more plausible that the more permanent part of Government, in this case the Department of Education, would seize the opportunity of current budgetary difficulties, with the urgent need for the Government to find sources of revenue to fund its projects, to pursue its agenda of centralising control over the universities?

The removal of fees - which may have served the purposes of political expediency or vote competition at the time of removal - can nevertheless be located in an underlying trend in the university sector since the Universities Act of 1997.

When that Act was being formulated, many in the university sector realised it was an instrument for centralising control over the universities by the Department of Education. Although, for a long time, the setting of fees was heavily influenced by the government, their removal as a source of independent income brought the universities more directly under the control of the Department of Education through its mechanism of the Higher Education Authority (HEA).

The entire educational income of the universities was then determined by the government, which naturally set about increasing its control over what happened inside universities. So why now risk the political consequences of reintroducing fees if the current Government were to also forgo the level of control already attained over the universities?

The fact is that a better way has recently been found to exercise control over the universities.

Just as in the case of fees, which purportedly are being considered because of the general crisis, the university authorities are in the process of handing over the management of their pension funds to the Government, in the form of the National Treasury Management Agency, purportedly to deal with a crisis.

They were "coaxed" under the threat of a public declaration that these pension funds are not guaranteed by the State and are therefore vulnerable in some sense.

The logical implication - the practice of which can be expected to emerge in due course - is that ultimately the universities will have to seek approval for every appointment and, possibly, even grade of appointment. That is obviously far more effective control of the universities than paying the fees for wayward students who continually resist selecting subjects which the Government would prefer.

Universities will only be able to add personnel to their pension scheme with Government approval. The Government has many ways of communicating what it will approve in the type of people it will allow to be hired.

Public sector reform should start at the top. The Government could exercise leadership by giving up trying to control both sides of a market. It could try to be less political and put on the clothes of a coherent policy based on understanding the power of markets to bring about efficiencies on the supply side. In the university sector, the Government is seeking to control both the demand side - ie, what the students want - and the supply side, ie, what the universities make available.

Two genuine elements of a serious public sector reform would be to dismantle the cartel of Irish universities operating for the Government under the aegis of the HEA and the Irish Universities Association and to act on the elementary distinction between public provision and public supply of services.

To the extent that it wishes to support demand for university education, it could better match the supply and demand sides of the market and thereby the effectiveness of the universities by giving university applicants a voucher for university education to be used on a programme and university of their choice.

That would be an example of public sector reform, but it would require a change of thinking at the top.

• Dr Connell Fanning is professor of economics at University College Cork. Dr Eleanor Doyle, senior lecturer in economics at UCC, also contributed to this piece.