OPINION:Evolution has been key for body founded under Seán Lemass to usher in era of transparency
TOMORROW IS the 50th anniversary of the foundation of the Economic and Social Research Institute. The ESRI was one of five institutes founded with Seán Lemass’s blessing around the time of the publication of Economic Development.
Joe Lee’s landmark study of the period, Ireland: 1912-1985, attributes the creation of these institutes to Lemass’s wish for new sources of advice for policy – part of the intellectual openness that succeeded the de Valera era and the end of protectionism.
The focus of the ESRI’s research from the start was to provide evidence to inform economic policy, based on data primarily from the Central Statistics Office.
ESRI research over the five decades has continuously mirrored economic and social changes. The early 1960s saw research on local Irish problem areas, such as agricultural incomes. In the late 1960s, the research focus shifted outwards to analyse what would happen if Ireland entered the European Economic Community.
The errors in economic policy-making in the late 1970s brought the focus back to the domestic macro-economy. The ESRI developed the first model of the macro-economy, initially a joint venture with the Department of Finance and the Central Bank. This model continues to develop and it is widely used for policy analysis and economic forecasting.
The economic recession of the 1980s was one of the factors that provided an impetus to the ESRI’s work on poverty and income distribution.
Concern with poverty and unemployment traps during the 1990s led to the ESRI creating Switch, a model that allows the government to assess robustly the full distributional implications of tax and welfare changes at budget time. This model has been put through its paces on several occasions in the past year.
While problems have changed, the emphasis has always been on analysing good data with the latest statistical techniques. ESRI field surveys have provided important data and have fed into our own research.
Of course ESRI researchers over the past 50 years have not always delivered infallible answers. Forecasting is one recent example.
While our research signalled clearly the dangers of highly pro-cyclical fiscal policy and the growing imbalance in the economy due to the construction sector, it did not identify early enough the full scale of the impending banking crisis. Consequently, like many other institutions, we did not forecast the scale of subsequent downturn in the economy.
To survive and prosper for a further 50 years, the ESRI will have to change.
Part of this change will come through our forging a closer alliance with the university sector, while still retaining our status as an independent research institute. This alliance will give us a greater opportunity to build on our experience and contribute to educating young researchers.
The ESRI may also have to work more closely with departments and agencies of government through exchanges and joint projects.
Irrespective of these changes, the ESRI research agenda will continue to provide the best evidence it can to support Ireland in addressing the challenges and opportunities it faces.
Without research, we believe policy-making is dangerously exposed to the influence of powerful factional interests and unreliable anecdotes. As Seán Lemass recognised five decades ago, research is too important to be considered a luxury.
Prof Frances Ruane is director of the ESRI