Oireachtas Joint and Select Committees

Thursday, 13 July 2023

Joint Oireachtas Committee on the Implementation of the Good Friday Agreement

Finance and Economics: Discussion

Professor John Doyle:

I might take this question, given that I am the political scientist in the room. I just finished some work on this matter with regard to the international evidence. I can see the appeal of maintaining devolution, at least transitionally. It looks less dramatic and it would be more reassuring for uncertain voters in Northern Ireland. As Brendan O'Leary has argued strongly, if we want to win 50% plus one and, one hopes, a lot more than that, devolution must be on the table.

The downside is there is not a single example of a two-unit federal system in the 20th century on planet Earth that works. That is because federal models work best when the coalition that might win is different every time. Five or six states might come together and have a point of view on climate change, but a different five or six states will come together on healthcare and everybody wins or loses some of the time. If, in a federal system, one part is wealthier than the other but there are the same social care systems in both parts, it will end up like the Lega Nord in Italy, where there are complaints about bailing out poor people who are not contributing and it becomes politically unpopular for politicians, who need to raise taxes to pay for healthcare that is better in the bit of the island that is not paying its way. You end up with very negative dynamics that get lost in a more unified system. I suspect that if we picked some of the poorer counties in the Republic and counted their tax and public expenditure, they would inevitably be in deficit. We do not collect it that way because it would be politically divisive to do so, but if there were a federal system, we would have to. The alternative is to leave pensions in the North at £75 a week and €220 in Dundalk, but I am not sure about that. I suspect a lot of people would find their granny's address in Dundalk, or that those were not willing to do so would be deeply resentful about that fact.

It is politically reassuring, but on a small island where people sometimes have a flexible attitude to the State and regulation, I do not see how it could work. I can see how it is politically popular to win a referendum but I think that on the morning afterwards, there would be buyer's remorse. Would there be a different corporation tax in Northern Ireland or a different planning regime? Intel, for example, would not like the sound of that. It is politically reassuring, but all the evidence points to two units not being enough. Inevitably, they end up in conflict.

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