Economic Crisis and Public Sector Reform: Lessons from Ireland

Reception and implementation of public sector reform ideas varies across countries. Westminster-type systems (Britain, New Zealand, Australia, and Canada) adopted New Public Management ideas most enthusiastically. Ireland was slower to do so. Continental European countries were the least enthusiastic. This gives us some insight into the political and organizational conditions that underpin adoption of NPM, and of post-NPM, which now coincides with international economic difficulties. The Irish experience provides a useful prism for analysing the issues involved in seeking to alter the ‘public service bargain’ under conditions of economic crisis. Membership of the Euro provides protection against currency collapse, but also entails severe cost adjustment measures without the cushion of devaluation. The reassertion of central management of budget allocations involves making stark choices between the numbers employed, the volume of services delivered, and the rate of remuneration of employees. The options facing government depend not only on the scale of fiscal problems, but also on the manner in which the crisis is politically managed and the legitimating strategies available.