Why one ESRI report made waves while others didn’t cause a ripple

What the institute has to say is important and authoritative. You don’t have to agree with every word it utters... but it’s hardly ever, surely, an appropriate policy response to say nothing at all in the hope that the ESRI will simply go away

IF LAST week proved anything at all, it proved that we all take the ESRI very seriously indeed. And quite right, too.

The ESRI will be 50 years old exactly two years from now and throughout its distinguished history it has been an invaluable source of comment about the state of the economy. It was originally established for that purpose, and TK Whitaker was a key influence in its early years.

A grant from the Ford Foundation in America enabled the institute to be established on a basis that was independent of government, and although it has been significantly government-funded since, it has cherished and guarded its role as an independent commentator.

Mind you, the institute, perhaps ironically, has never been immune from government cutbacks. Over the years it has had to extend its funding base to enable it to carry on its work and to continue to inform public policy

Almost from the beginning it was seen as important that the ESRI (which was originally called the Economic Research Institute) would carry as important a brief in terms of social policy as it does in relation to economic policy, and the two functions were amalgamated in or around 1963.

The first ESRI director, RC Geary, said that research “must be redolent of Ireland and must address… problems which, rightly or wrongly, the people consider urgent and important”.

On the other hand, he added, “the popularity or otherwise of the researchers’ findings is not a consideration, provided that these findings are soundly based and cogently argued”.

I don’t suppose anyone would argue that last week’s report — the first to use the dreaded word “recession” — was a popular one. But not only did it unleash a huge amount of public debate, it has clearly had a profound influence on public policy already.

Lots of different commentators have been forecasting economic difficulty in recent months and indeed the signs were all around us. But it took the ESRI to galvanise public and political opinion and to focus hearts and minds on what needs to be done now.

Of course, politics likes to take its prescriptions à la carte. That’s why there has been so little reaction to the idea put forward by the ESRI that it may be necessary to raise taxes next year to ensure an incipient recovery is properly funded and that different sectors of the economy aren’t allowed to overheat again. And you certainly won’t hear anyone from the Department of Finance agreeing with the proposition that we should ignore our Maastricht obligations by borrowing over the limit in the short term. But there has nevertheless been an extraordinary reaction, in all sorts of ways, to the latest ESRI report.

So why is it that so many other ESRI reports in recent times go largely ignored? What the institute has to say is important and authoritative. You don’t have to agree with every word it utters — I’ve certainly taken issue with some of its pronouncements in the past. But it’s hardly ever, surely, an appropriate policy response to say nothing at all in the hope that the ESRI will simply go away.

For example, a recently-published working paper from the ESRI makes this telling point (and I don’t remember a politician or the media jumping up and down about it): if you live in a household that has someone with a long-term illness or disability, your are twice as likely to be at risk of poverty. As the ESRI says, “these households are twice as likely to be deprived of basic items such as clothes, food or heat”.

That startling couple of sentences comes from a paper entitled Estimating the Economic Cost of Disability in Ireland, published a couple of months ago. Admittedly, it’s a very technical piece of work (more difficult to read than the Lisbon Treaty), but its findings are clear enough. The more severe the disability you have, the more it will cost you.

The study puts it this way: “This suggests that the additional costs of disability are borne most heavily by those individuals who suffer the most from their disability in their day-to-day lives. In terms of average costs per week these percentages translate to an estimated e55.90 per week on average for those not hampered in their daily activities, an average of e101.77 per week for those hampered to some extent and an average of e163.78 per week for those who are severely hampered.”

Even though the study was published very recently, those figures relate to 2001 since that was the most recent year for which the ESRI had a full set of data.

You can readily assume the cost of disability has risen since then. In fact, as the ESRI demonstrates, the cost of a severe disability can eat up more than 40% of the income of the person who lives with that disability. And those incomes tend not to be high. The result is that disability has a sharp economic cost not just for the person who suffers it, but also for his or her family. Families who depend on the income of a person with a disability are almost always, as a consequence, condemned to poverty. That’s one of the ESRI’s more recent findings. And only last week it published another detailed report which showed that, while we have made some progress in reducing poverty and the risk of poverty among elderly people, the range of policies employed are still failing other vulnerable groups, especially children in poverty. The report also demonstrates pretty convincingly that countries which do best at tackling child poverty (particularly the Scandinavian countries) also do best at eliminating poverty generally.

BUT while the ESRI has a lot to say about subjects like these, unless their reports fit into the prevailing mood of the day, they tend to get ignored.

In relation to both children and people with disabilities, the ESRI is calling in these reports for a sophisticated rebalancing of tax and public spending priorities to ensure greater opportunities for people now at the margins of public policy.

Their approach to child poverty, especially as it derives from lone parenting, for example, is summed up thus: “Tackling child poverty, therefore, requires a strategy that takes a broad view of welfare income supports, and ‘activist’ measures to increase participation in employment. Solutions lie not with welfare alone, or employment alone, but a combination of both.”

In other words, reports like these don’t just inform public policy — they challenge it. For generations, indeed since the foundation of the State, public policy towards marginalised people in Ireland has been based on a biblical reference. It’s from the Book of Luke, Chapter 16, the verse that refers to “crumbs from the rich man’s table”.

A policy that offers crumbs to people on the margins is never going to react well to an independent body that points out how meagre the crumbs are or that calls for activist measures instead.

We might well get into a panic when the same body suggests that the rich man’s table itself is about to take a bit of a hit. But that’s different, isn’t it?