Monthly Archives: May 2014

This is why we can’t have nice things…

This is a version of a column in the Irish Examiner Saturday 30 may.
This is why we cant have nice things.  We cod ourselves that we can, but we neither raise enough money to pay for them nor do we make them work when we get them.

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Knowledge Transfer Ireland – Partial, Error ridden and Naïve


Knowledge is only useful if people know it exists. So it is great to see Knowledge Transfer Ireland established, to start to allow organizations and individuals to seek out the knowledge in Irish third level institutions.

At least , it would be if it worked. . It doesnt

Look first at economics. Inputting “economics”  we see on the front page (how is this ranked? Is it random? ) my good self and we also see Richard J Tol as economics in TCD. I am in the Business school and work in Finance. He is in Sussex, and has been for some considerable time.

I apparently have 31 publications (an undercount by at least an order of three if we look at just peer reviewed publications and by seven fold if we look at all publications).  If we look at the TCD research system record we see nearly all my publications. If we look at google scholar, to which the KTI system neatly provides a link we see a pretty full record again.  The system misclassifies my research interest,  and it misses most of my research output. This alone tells me, straight out the box, that KTI is next to useless.

Looking at the TCD Economics profile of experts, again it’s a mess. It contains (some) of the people who actually work there; it also contains people who work in the Central Bank, a whole bunch of ESRI folk, a smattering of people in TCD in areas as disparate as law, sociology, business, sports science….

A quick glance at the other universities shows similar problems.

It proudly states that it “ automatically builds expert profiles from publication output, patent submissions and funding attainment. .Aficionado is unique in that it never asks an expert to create or maintain a profile on our system.“ and that’s a problem. If they are going to just trawl open access archives (as they seem to do) then they cannot present that as remotely like a full picture of any research endeavour. It seems that they have, as so often in Ireland, tried to do it on the cheap. Bibliometric databases abound and a decent system would use all of them, firewalled and open, to build a picture. Not here.  Beyond that the data are presented in a whizzbang graphics rich mode that is devoid of any hint of bibliometric or other analysis. Every paper is the same as every other. A raw paper count is produced but there is no sense of quality in any sense.


This portal may well be an accurate representation of the STEM areas researchers and research profile. The thrust of the thing seems to be towards that area – leaving aside the fact that the centers of global excellence in Irish universities is in Arts, Humanities and Social Studies –  but the data seem to me to be so patchy, poorly presented and flawed as to make it useless.  If it is merely meant to be for STEM patentable  right-now commercial research then say so. We know that AHSS research is not valued, so lets be upfront.  This exercise has been supported by the taxpayer via Enterprise Ireland, launched by the government via Richard Bruton and its shoddy.



Bureaucracy, LEAD-ing to Mistrust, in the University sector

clayton-house_3483Bureaucracy is like Kudzu – it s invasive, persistent, useful in small doses but when unchecked it is destructive and self-perpetuating even when it engulfs that which was supporting it.  Take the LEAD programme designed for Irish universities. LEAD stands for Living Equality and Diversity, and it’s an online programme designed for all staff in Irish universities. The press release describes it thusly

The LEAD programme is a self-paced modular learning tool that features an intuitive navigation system with core content split into five modules of learning.  Module topics cover ‘Understanding diversity’, ‘What’s it got to do with you?’, ‘From compliance to commitment’, ‘Recruitment and Selection’ and ‘Dignity and Respect’.  Each section contains video and multimedia stories and scenarios including interviews with university staff and students, interactive games and quizzes, and online instant assessments to offer staff valuable feedback on their learning.  By using this interactive and multimedia resource, staff will have the opportunity to consider and reflect on the part they play in building an inclusive culture across the university sector.

It takes between one (TCD) and two( UCC) hours, we are told, to go through this. All the aims, to promote diversity and to dignity, to ensure that people are treated as people, not as exemplars of ethnic or other groups, that’s a fantastic set to aim for. Its one that I would love to see becoming the norm in society, more so as a member of a multi-ethnic family.  TCD are making participation in this compulsory for all staff on interview panels. The various equality offices in the universities have wordings that suggest that all staff are in its ambit. Ok. So, what’s the problem?

First, the thing is inconsistent.  It is inherently itself not respectful of diversity. All staff, regardless, are treated the same.  There are a diversity of views on diversity. Some are more obnoxious than others, but they do exist. Do we serve well those populations towards whom the diversity initiative is aimed by ensuring that everyone else is the homogenous in their views and aims and interactions? It also would seem rather odd for all staff, regardless of past expertise or experience, to have to do this. When we treat everyone as a problem that’s a problem.

Second, there is a presumption of a problem that must be solved by a bureaucratic imposition. This is the norm now in the university sector. All problems of running complex organizations can be solved by enough large-scale top down interventions designed for all at all times. The result is  a bland homogenization and the growth of a kudzu of bureaucracy. In the UK the classic example of this is the requirement for everyone, regardless of teaching quality ex facto, to be sheepdipped into a variety of third level pedagogic training courses. TCD, and I suspect we are not alone in this, has a ‘one size fits nobody’ undergraduate course evaluation form, so bland and generic as to be meaningless in content and usefulness. The latter two represent blanket solutions to particular problems – some lecturers cant. Rather than focused interventions where a demonstrated problem exists a generic solution requiring a bureaucratic cadre is imposed on all.

Third, its costly. There are 13,812 employees in Irish universities as of 2012.  4,229 are academics. The OECD calculates that  on average in 2010 the total annual  per student spend across all categories of expenditure was just over $16,000. Assuming a 50h working week (which is what the data suggest) then we have an hourly cost of $6.66.  Pushing this across the sector and allowing 1-5h to complete the programme we find a  cost of just under $140,000. Small enough in the context of the total spend but is it justifiable? Was it even costed? Far too often these initiatives are put in place without regard to the cost.

Fourth, in TCD at least, the rule is that if one has not undertaken the LEAD program then one cannot sit on interview panels. This is doubly problematic. First, the incentive is NOT to take this programme. Not taking it means less work.  We often find this with bureaucratic micromanagement. It creates the bureaucratic equivalent of what Frederick the Great noted on war: he who bureaucratically organized to micromanage everything manages nothing. Second, and I am sure that this is the case in every university, HR representatives sit on all interview panels in TCD and are involved in the advertising and shortlisting. Of candidates. They are there explicitly to ensure that HR law and best practice, including one assumes issues around diversity and respect, are adhered to . Thus in the recruitment issue at least there is no clear need for this. Its part of a  growing creeping mistrust of colleagues. Academics cannot be trusted to do their work without bureaucratic oversight and micromanagement. How things are arranged are more and more direct oversight or standardization of processes. In organizational structure terms this leads to one of two outcomes. If direct supervision prevails we get centralized organizations. If process outcomes dominate we get a machine bureaucracy where technocrats dominate.  Looking at Irish universities we see this trend. As academic, technical and research staff are the operating core we need to seize back control, which leads to vertical and horizontal decentralization and a professional organization that trusts us. We know, for decades, from the work of Oiuchi that when tasks are ill-defined (“teach” , “research” … what could be fuzzier than that) and outcomes hard to measure that horizontal, flat organizations deliver better outcomes all round. t

LEAD has great aims. The flaws above don’t invalidate them. They merely serve to show how far things have slipped in Irish universities, where staff are not trusted and bureaucratic processes run rampant.

Are the Irish Government nuts? Their housing policy is…

Housing-Bubble (1)This is nuts. We have not yet recovered, as a society nor as an economy from the last property apocalypse before the government starts to get busy tinkering with the market again. We are as a state incapable of learning. Literally, incapable. A martian wanting to know how Irish economic (mis)management works need look no further than the property market. Dysfunctional, disjointed and despair inducing, we have a housing policy which now seems to revolve around serial bubbles. This, I feared, was the plan all along. From a FF-Green actual  boom we move to a FG-Lab wannabee boom.

Somewhere in government buildings there is a man, and it is a man, who has a black sense of humour. There we were thinking that the spirit of Flann O’Brien was dead and then we get the conjoined announcements this week.  On the same day as the government finally gets around, a mere three years in office, to setting up an inquiry into the property led banking crash, they also announce what can only be seen as a set of measures to reinflate the property sector. More credit, more tax breaks for construction, more more more…The plan at the center of the Construction 2020 strategy is to increase house prices. What is it in the Irish psych that seems to love rising house prices?

Lets leave the inquiry aside – although it is I am sure a mere coincidence that it will report JUST before the next general election comes into full swing, and the realiy is that that will be bad news for FF. The property bubbleers are back.

The plan is in essence for the taxpayer to underwrite the bad property debts of the banks. Where have we heard that before? This time is of course, different. This time the plan is not banker led but government led. This time it happens not in the semi-excusable white heat of a global crisis but as a deliberate and thoughtful government decision. This time instead of a (apparently) functioning vibrant banking system we have a dyad of deadheads. This time, instead of a debt/GDP ratio amongst the lowest in Europe we have the highest after Greece. This time instead of a global crisis unfolding we have a global recovery stuttering along.  This time is different.

Property affordability remains, in reality, low. A comprehensive international study identified no Irish urban market as affordable. In Dublin, prices are rising fast.  20% of disposable income for a couple on average earnings is required nationally, nearly 25% in Dublin. That is tight.  While both earn the average wage it is affordable at present interest rates. That we are at historically low rates of interest in the euro zone is also a fact. Rates will rise. And couples tend to have children, who tend to be either minded at home (reducing family income) or in monstrously expensive crèches and childcare facilities (reducing family income).  So purchasing now may be affordable but a house is a 25-30 year income commitment. The government have done little to create a stable market for long-term fixed rate mortgages. A proposal to create a Danish style system was voted down, despite the government agreeing with its thrust.

The proposal is to in effect introduce a government, read taxpayer, guarantee for first time purchasers to enhance their loan to value ratio from 80% to 95%. This is a bad idea on several levels. First, a high LTV ratio is indicative of poorer quality loans. While banks can and should lend to poorer quality lenders they must price those correctly. The mispricing of subprime loans is one of the key issues which drove the crisis. Here the market will be distorted as the quality borrower (80% LTV) will be treated the same as the lower quality one (95% LTV). There is a vast economic literature on the effects of these kinds of distortions in credit markets. Adverse selection, where those that need the insurance are those most likely to incur losses, exposes the ultimate loss holder. Thats us.

Second, what this does is pit borrowers against each other. Lower and higher quality borrowers are now more aggressive competitors, bidding competitively – so also are first time buyers and others. Increased competition in the face of scarce supply simply drives up prices.

A third issue is that this generates an unquantified state contingent exposure. This will likely rise over time. If this program is a success then the pressure will be significant for a relaxation of the terms, to higher loan levels and to other classes of mortgage borrowers. We have seen how badly underestimated the bank guarantee was. Are we to think of this as being the “cheapest mortgage subsidy ever? . A US study of the tail risk of government insurance for mortgages urges caution. A Brookings Institution paper from 2011 makes it explicit that such insurance guarantees are simply subsidies to house purchase. Is this what we really want to do with our taxpayer money?

Fourth, we face a market in which supply, of those homes in locations where people wish to live, is constrained. That, it is generally accepted, is the main constraint. A supply side initiative seems lacking here. What is happening to free up serviced land that is zoned? What is happening to allow zoning changes in terms of density and mix? What is happening in relation to increasing the supply of services to unserviced but zoned land? The Construction 2020 strategy is vague and aspirational on these issues. A truly determined effort to sort out the supply side, as has been outlined by Colm McCarthy, would pay enormous dividends. Tax changes on the principal private residence, such as I have advocated, would also assist.

With short-term fixed supply and a rising demand basic economic tell us that prices will rise. We know that expectations of future house prices play a major part in the dynamics of Irish house prices.  Even anecdotally we are aware of the “get on the property ladder” meme.  We also know that credit leads house prices at least in the short term. We know that persistent behavioural biases in policy making exist.  All of these issues we know. And we know that the result of this policy will be to make houses more expensive. So the issue is : why are the government doing this?

This is an expanded version of a column in the Irish examiner Saturday 17 May 2014


What good is a university education?

What good is a university? Economists think a lot about goods, and the classifications of them can shed some light on the present state of Irish higher education.

We can think about goods in several ways.  All are useful.

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