The organisation of government in Ireland 1900-1960: growth, efficiency, and specialisation

This thesis examines the economic rationale for the growth and consolidation in central general government organisations in Ireland during the first sixty years of the 20th century, through the lens of government expenditure and employment. While concerns over the allegedly excessive number of government organisations have typically intensified in Ireland at times of economic and fiscal stress, it has proved difficult to advance that public debate by reference to a framework for understanding what might constitute optimal or even better organisational arrangements for government. The internal organisation of government, as opposed to its overall size, has received surprisingly little attention in economic theory and correspondingly limited guidance is available to policy makers and citizens from empirical work in economics. Thus this study first advances a basic theoretical framework with a decision tree to guide policy makers in the economic assessment of the organisational implications of a new or existing government activity. The policy-maker must choose between the internal (to make) and the external (to buy) provision of resources, using the transactions costs approach. A decision ‘to make’ is followed by further organisational decisions between ‘to create’, ‘to add’, or ‘to keep’ organisations based on the trade-offs between specialisation and economies of scale or scope. To explore empirically the explanatory power of this framework, I present a detailed database on central government employment in Ireland between 1900 and 1960. This draws upon a range of sources, principally official publications centred on the annual budgetary process, as well as annual reports of departments, to provide estimates of government employment for up to 133 organisations over the study period. While limitations of the sources mean that some gaps are filled by interpolation, the results match well with census totals. This data is linked with Irish government expenditure, organisations, and macroeconomic outcomes. It allows the exploration of the changing structure of Irish government organisation before and after Independence. In particular, the data allows classification of organisations by both their policy domain (health, education, defence etc.) and their core policy activity (e.g., delivery, regulations, policy formation). This data in turn permits the construction of indices of specialisation in government employment and expenditure, i.e., Herfindahl-Hirschman and Balassa indices, to align with the theoretical framework advanced earlier. This shows that the growth in Irish government organisations principally reflects specialisation rather than economies of scale. The increase in government organisations is not matched by the expansion of government employment or real government expenditure. Government employment and real expenditure are dominated by four to five organisations in the delivery of government services in policy domains such as education, policing and defence. The growth in government organisations typically occurs in other activities, such as policy development, regulation and taxation, that make up a small share of overall expenditure and employment. Finally, the impact of consolidation of government organisations through mergers is examined. The results found some supporting evidence of efficiency gains in both expenditure and employment of the merged organisations.

Funder

Commission for Communications Regulation

Publisher

University of Galway

Rights

Attribution-NonCommercial-NoDerivatives 4.0 International

cbn

Collections

University of Galway Theses (PhD Theses)