Making Equality Count—the Case for Budgetary Impact Assessments

Clara Fischer: Ireland’s next budget is only around the corner, and people all over the country are bracing themselves for what is set to be another harsh exercise in cuts and tax increases. While much of this will be presented in abstract terms – a few percentages increased here, a few numbers decreased there – the very real effects of Budget 2013 will be keenly felt, especially by those already marginalised within our society.

Given the government’s reluctance to equality-proof or gender-proof the budget, it is more than likely that Ireland will continue in the current trajectory toward increased inequality and poverty, thus exacerbating a situation that has been worsening since the beginning of the economic crisis. In 2010 alone, there was a 25% increase in inequality in Ireland, with the top 20% earning 5.5 times the income of the lowest 20%. The percentage of people in Ireland living in consistent poverty increased, as did the percentage of children at-risk of poverty, which stands at 19.5%. Just recently, it was established that one in ten people in Ireland experiences food poverty.

Those are harrowing statistics, especially in light of the fact that people at the higher end of the socio-economic spectrum increased their wealth by 8% in 2010. The research clearly shows that ‘burden-sharing’, ‘collective belt-tightening’, or whatever similar misnomer successive governments have used and continue to use as a means of justifying disproportionate hardship for those at the bottom, is simply that – empty rhetoric that is not based on fact. The truth is that, at present, the government simply doesn’t have the required information to devise, implement and review policies that might actually result in a more level spreading of the economic burden across different sections of society. Instead, we are seeing the continued,disproportionate targeting of lone parents, people with disabilities, and women, to name but a few, as impact analyses are not undertaken, data is not collected, and information is not made available.

While one could be uncharitable about the political motives behind this, it is important to note that other countries do things differently. In Scotland, for example, it is common practice to publish a draft budget in September, which can then be debated before being finalised in January. Importantly, the draft budget is published alongside an “Equality Statement”, which provides a full impact analysis by equality category (such as gender, age, disability, etc.), as well as by budget theme (e.g. “health and wellbeing”). The budget process itself is also significantly at variance with the Irish process, as an Equality Budget Advisory Group, made up of civil society and government actors, ensures that equality is fully integrated in economic policy-making and planning. The meeting minutes of this group are readily available on the Scottish Government’s website, as are the draft budget, and the attendant Equality Statement.

The Scottish approach is far more transparent, and affords equality a central role in economic policy-making, planning and review. There is no reason why such an approach could not be introduced in Ireland. Given the pressure the government currently finds itself under, especially with regard to economic policies being perceived as unjust and unfair, adoption of an approach more akin to the Scottish model would actually take some of the sting out of the debate. The government would be able to point toward impact assessments and research, and could show that its decisions are based on evidence and carefully planned examination of the circumstances of different sections of Irish society with a view to implementing the most equitable policies. Equality budgeting would also halt the increases in inequality and poverty we’re currently experiencing in Ireland, while satisfying citizens’ demands for economic justice and true ‘burden-sharing’.

For the last number of months, the Equality Budgeting Campaign has been working toward the introduction of such a more transparent and equitable approach to economic policy-making, and has successfully won the support of the Sinn Fein parliamentary party, and of Labour, Independent and ULA representatives. More pressure must be brought to bear, however, upon the powers-that-be if a substantial reform like this is to be made a reality. The urgency of doing so cannot be stressed enough, as the brunt of the economic crisis continues to be borne by those least able to do so. For anybody interested in pursuing equality budgeting with us, we invite you to contact us or to follow us on Facebook, Twitter, or via our website. We also have a petition for the introduction of equality budgeting here. For further details on equality budgeting, see our information booklet here.


Contact:equalitybudgetingcampaign@gmail.com

Dr. Clara Fischer holds a Ph.D. in political philosophy and is a co-ordinator of the Irish Feminist Network. The network is part of a broad-based coalition of civil society organisations and concerned individuals seeking the introduction of equality budgeting in Ireland.

French to measure happiness

French President Nicolas Sarkozy today announced that France will implement new indicators of economic performance incorporating measures of “well-being” and environmental degradation drawn up by a panel of international economists. Click here to read the full story, and here to read Joseph Stiglitz' explanation of why GDP may not necessarily be a reliable indicator of societal well-being.

Making the case for pluralism in economic thinking

John Barry: After writing a post asking Where's our 'Green' Whitaker?, I was reflecting on the relationship between the imperative for orthodox economic growth (and the conventional neo-classical economic theory and thinking which accompanies it) and sustainability, (in)equality and well-being.

I'll begin by citing Thomas Friedman, once the cheerleader for unfettered neoliberal globalisation, who has recently become a 'proto- green' (at least from an economic perspective). In an extremely interesting op ed piece for the New York Times in March he states:

"Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: ‘No more’.”

Welcome to the party, Thomas. Us greens have been saying as much for at least four decades.

Couple that with two excellent discussions this week - one by John Woods, director of Friends of the Earth Northern Ireland, and another by Richard Wilkinson and Kate Pickett – both of which spoke to the same key issue, namely that we have the empirical evidence that economic growth is not just ecologically unsustainable (i.e. not compatible with 'one planet living') but also needs inequality which undermines general well-being in society.

John Woods presented a summary, and outlined the implications for Northern Ireland, of Tim Jackson (Economics commissioner of the UK's Sustainable development Commission) and his recent SDC publication Prosperity without Growth http://www.sd-commission.org.uk/publications.php?id=914. John's talk and Tim's argument is, basically, that what the green movement has been saying for decades is true: beyond a certain point, economic growth does not only not add much to general and average well-being but, through positional competition, status competition and 'defensive' consumption, actually undermines human well-being. Here the real challenge is how to design public policy and especially macro-economic policy which aims to enhance human flourishing rather than a narrow focus on one means to flourishing i.e. conventional economic growth.

In the excellent discussion which followed John's talk, it was clear that the dominance of the discourse and myth of 'economic growth' is one of the main reasons for people to misunderstood greens and others who question 'growth'. The issue seems to be that many people cannot but view a non-growth argument as anything but 'bad', whereas the real issue is to separate out growth from 'prosperity' (as Jackson does), 'flourishing' (after Sen) or in my own work 'economic and social security', or to simply draw a distinction between economic growth and well-being. The evidence behind Jackson's report is pretty compelling, drawing on decades of research in economics, behavioural economics, psychology and cultural studies, all of which show that growth after a threshold does not appreciably add to average well-being (the infamous 'crocodile graph', is illustrative here demonstrating rising GNP over decades coupled with well-being flatlining since around 1960).

Wilkinson and Pickett's talk was also robust in its empirical evidence. They were talking about their new book The Spirit Level: Why More Equal Societies Almost Always Do Better http://www.equalitytrust.org.uk/resource/the-spirit-level and presented an impressive range of statistical and cross-country analysis which shows the strong correlation between inequality and a range of issues from obesity, lack of trust, crime, imprisonment, mental health. What I found particularly striking was their evidence that inequality does not simply negatively affect the least well off: in fact, almost everyone does less well the more unequal the society.

So, the upshot? Well... green critiques of economic growth now have a firmer evidence base, the need for more redistributive economic policies is apparent, the creation of less unequal societies not only is inextricably linked to challenging economic growth (i.e. if you are an egalitarian or on the left, you should be in alliance with greens), and what is needed above all is more pluralism in economic thinking. What does public policy look like when it’s free from the imperative of economic growth, competitiveness and all the other guff of 'there is no alternative' economic thinking, and what does public policy look like when its aimed at directly improving quality of life, human flourishing rather than economic growth?