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RECONSIDERING THE PATTERNS OF
ORGANISED INTERESTS IN IRISH
POLICY MAKING
R aj S. Chari and Hilar y McMahon
Department of Political Science
Trinity College Dublin
A B S T RAC T
Set in the context of the literature on patterns of organised interests in
Western Europe, this article has two objectives. The first is to examine
the policy-making process when Irish state enterprises were sold and to
characterise this process in light of three different theoretical patterns,
namely pluralism, corporatism and elitism. The second objective is to
explain this characterisation while situating the findings in the Irish
policy-making literature. The first main argument is that given the
predominant role of economic actors that directly influenced state
actors, coupled with the relative absence of social actors including
organised labour, the evidence suggests the importance of the ‘elitist’
school in explaining the privatisation policy-making process. The second
main argument is that in order to understand why elitism was manifest
in privatisation policy-making, attention must be focused on the larger
institutional structure whose dimensions are defined by developments at
both the supranational and domestic levels. The study further argues
that even though the evidence points to the importance of ‘elitism’ in
privatisation policy making, the findings are not necessarily
incommensurable with ideas in the pre-existing literature highlighting
the importance of corporatist arrangements in Ireland in other policy
areas. Rather, it is concluded that different patterns of organised interests
may co-exist in different areas of economic policy making precisely
because of the varying institutional dynamics over time.
Introduction and Objectives
Students of Irish politics have increasingly concentrated on the role of
interest groups in the policy-making process, guided by the larger
IRISH POLITICAL STUDIES
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theoretical models of organised interests found in the larger comparative
literature. Based on analysis of authors such as Crouch and Menon
(1997), there are three principal patterns of organised interests found in
Western Europe: pluralism, corporatism, and elitism.1 Pluralism,
originally embodied in Dahl’s US-based work, explains governmental
decisions in terms of conflicting interaction of freely emerging organised
interest groups representing their members (Dahl, 1967). Theoretically,
there are wide numbers of interests that have equal access to and voice in
the policy-making process; however, it is reasonable to expect only those
groups which have a vested interested in specific policies to participate in
their formulation. The corporatist pattern of intermediation, historically
characteristic of developments in Austria, Scandinavia, and Germany, is
seen in the work of those such as Schmitter and Lembruch (1982 and
1979). Hypothesising that representation has its basis on economic
relations in society, corporatism argues that three main actors have
solidified policy-making roles – capital, labour and the state. Elitism,
which arose as a reaction to the pluralist school, as most clearly seen in
Miliband’s instrumental Marxist work, contends that economic actors
enjoy decisive and stable political advantages over other social actors
(Miliband, 1969). Elite Marxism does not assume that social actors will
always be silent, however. Indeed, there may be instances when labour is
allowed some (limited) access to policy formulation. However, the
school’s main argument is that economic actors will attain a decisive role
in public policy formulation and that policy outcomes will necessarily be
biased in capital’s favour. Two main factors ensure that the political
system functions in the interest of capital: political interventions by the
capitalist class and policies that are largely formulated by an enlightened
corporate vanguard.
Applying these different patterns, scholars focusing on developments
in Ireland have offered two significant insights. The first, offered by
Murphy’s work which represents a pioneering analysis of the role of
interest groups in contemporary Ireland, argues that ‘... Ireland finds
itself now very much in the mainstream of west European politics in
relation to interest group influence, having experienced a blurring of the
distinction between the corporatist and pluralist models of group
behaviour’ (Murphy, 1999: 291). The second, more recent insight
offered by Hardiman, cogently demonstrates the importance of
‘competitive corporatism’ in macroeconomic management, with specific
attention paid to the ‘partnership’ agreements since 1987. She argues that
social partnership since the late 1980s, ‘refers to a process of consultation
between government and the principal organisations representing
employers, trade unions and the farmers’ (Hardiman, 2002: 7).
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Hardiman contends that: ‘the construction of the new institutions and
practises of social partnership may ... be attributed primarily to the
intense economic crisis faced by the country in the mid-1980s’ (2002: 8),
as well as the will of political leadership at this conjuncture. In this
process, all partners arrived at national agreements, laying the
foundations for economic growth, employment expansion, and increased
living standards in the Republic throughout the 1990s. Taylor also
suggests that this macropolitical bargaining structure proved an effective
channel for change and resolution of potential trade union conflict
(Taylor, 1996: 253–77). Although he later suggests that the nature of
such agreements were increasingly influenced by neo-liberal ideology, he
underlines the pacts’ importance by stating that ‘... national agreements
have framed (Irish) public policy over the last decade’ (2002: 523).
Although these studies offer firm insights into how interest groups
influence public policy in Ireland, a deeper understanding of private
interests’ influence may be gained by analysing policies falling outside of
the range of these (macro)economic and social policies, including
centralised wage mechanisms, tax reform and the evolution of social
welfare payments that characterised social partnership agreements
between 1987 and 2000. An example of such a policy that falls within
‘unexplored territories’, includes the privatisation of Irish state
enterprises. Examination of privatisations thus potentially offers further
insights on the role of interest groups in the Republic while allowing us
to test which theoretical pattern of interest intermediation is of greater
explanatory value. For example, did all potential interest groups having
vested interest in the sales have access to the policy-making process, as
argued by pluralism? Was there a ‘tripartite’ agreement between labour,
capital and the state when the conditions of the sales were negotiated, as
the corporatist pattern suggests? Or, as elitism posits, did economic
actors attain a privileged position compared to other social actors during
the sales’ formulation and, if so, is this reconcilable with observations in
the literature on the importance of corporatism?
With these questions in mind, this article has two related objectives.
The first is to analyse the policy-making process when Irish state
enterprises were sold and, based on this evidence, to characterise this
process in light of the three different theoretical patterns above:
pluralism, corporatism and elitism. To this end, three sales are examined
in the first section – Irish Sugar, Irish Steel and Telecom Eireann – while
comparative reference is also made to sales in other European Union
(EU) states in order to gain insights on processes’ similarities and
differences. The second objective, as developed in the second section, is
to explain the characterisation of the privatisation policy-making process
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and to situate these findings in the pre-existing literature on Irish policy
making.
Accordingly, there are two main arguments developed. The first is
that given the predominant influence of economic actors that directly
influenced state actors, coupled with the relative absence of social actors
including labour, the evidence in the first section suggests the importance
of the ‘elitist’ school in explaining the privatisation policy-making
process. This finding itself offers a significant puzzle in light of the preexisting literature on Irish policy making: given the supposed strong role
of labour in (macro)economic policy making as discussed by some
authors, why is elitism manifest in privatisations? In order to explain why
this is the case, the second section draws on both the larger comparative
policy-making literature as well as the evidence presented in the first
section , and highlights the importance of the institutional structure that
helps cement and guide the participation of specific policy actors while
preventing others such as labour from partaking. Two dimensions of this
structure are of importance: the supranational one, highlighting the EU
TA B L E 1
M A I N PU B L I C E N T E R P R I S E S I N I R E L A N D
Company name
Sector
Ownership status
(privatised or
state-owned)
Buyers
(if applicable)
Aer Lingus
Aer Rianta
An Post
Bord Gais
B&I Shipping
Electricity Supply
Board (ESB)
Irish Life
Irish Steel
Irish Sugar
(renamed Greencore
after sale)
Telecom Eireann
Airlines
Airport authority
Postal company
Natural gas
Transport
Electricity
State-owned
State-owned
State-owned
State-owned
Sold in 1991
State-owned
Insurance
Steel production
Sold 1990
Sold 1996
Flotation
Ispat
Sugar production
Sold 1991
Flotation
Telecom
Sold 1996–99
Voluntary Health
Insurance (VHI)
Insurance
State-owned
Irish Ferries
a) 1st tranche –
Direct Sale to
KPN and Telia, 1996
b) 2nd tranche
– Flotation, 1999
Source: Vickers, 1997; Chari and Cavatorta, 2002; and author(s) own research.
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institutional rules and norms that called for both deficit and debt
reduction as well as increased economic liberalisation, and the domestic
one, underlining that no codified role was guaranteed for labour in
privatisation policy making. It is further contended that even though the
findings contrast to ideas raised in the pre-existing literature on the
importance of corporatist arrangements in Ireland, they are not
necessarily incommensurable. Rather, different patterns of organised
interests may co-exist in different areas of economic policy making,
precisely because of the differing nature of the institutional structures
surrounding different policies.
Overview of Privatisations and Negotiations of Irish Steel,
Irish Sugar and Telecom Eireann
Before detailed analysis of the privatisation process, it is useful to offer a
brief overview of the Irish privatisation experience to date. Summarising
the main public companies in Ireland that have been either privatised or
not, Table 1 offers two main observations.
The first is that to date only five main privatisations have taken place
in the Republic, in contrast to states such as the UK which heavily
privatised throughout the 1980s and 1990s, guided by an overall
ideologically based mandate of the party in power to sell off the state
(Vickers, 1997). Irish companies have been sold off using one (or a
combination) of two main methods: flotations (Irish Life, Irish Sugar and
the second tranche of Telecom Eireann) and direct sales to private
investors (B&I Shipping, Irish Steel and the first tranche of Telecom
Eireann.) These methods of sales are reflective of those chosen in other
West European states where it is generally (but not necessarily always) the
case that profitable companies are floated, and those suffering from high
debt to equity ratios are directly sold to private investors after massive
financial restructuring usually involving debt write-offs and
recapitalisations (Chari, 1998: 163–79). Secondly, several public
enterprises remain under state ownership. This includes those which have
strong, and in some cases monopoly, positions in different sectors of the
economy, including electricity (ESB), natural gas (Bord Gáis), and the
airlines industry (Aer Lingus.) Full state ownership contrasts to other
West European states such as the UK, France and Spain that have
witnessed full or partial privatisation of equivalent companies, coupled
with full liberalisation in the relevant sectors.
We now turn to more detailed examination of the negotiation process
in three main sales in the last decade, starting with that of Irish Steel,
which the pre-existing literature has made reference to, and then turning
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to the sales of Irish Sugar and Telecom Eireann, which the academic
literature has not hitherto deeply examined. It is argued that all sales
seem to verify a closed negotiation process wherein capital actors,
involved unilaterally, set the conditions of the sale while other social
actors, including organised labour, were generally excluded or, if their
voice was present, were unable to secure equally beneficial deals as
capital. Comparative evidence relating to privatisations in other
European states will also be presented in order to further demonstrate
the nature of this rather ‘elitist’ process throughout Europe. The section
thereafter more deeply explains why capital actors were given a key role
in the process and considers the implications of these findings in the
context of ideas raised in the current literature on interest group
behaviour in Ireland.
The Sale of Irish Steel to Ispat
Existing research suggests that Irish Steel’s privatisation policy-making
process can be best characterised as a closed one in which economic
actors alone negotiated the policies in less than transparent conditions
along with state officials, to the exclusion of direct participation of social
interests such as organised labour (Chari and Cavatorta, 2002: 128–9).
In terms of Irish Steel’s history, it suffered serious financial losses in face
of decreasing demand and a fall in world prices throughout the 80s and
90s. Having reached losses of over £20 million by 1995, the Fine GaelLabour coalition government wanted Irish Steel (IS) to be sold to a
private firm for two main reasons. On the one hand, the state sought to
rid itself of a future budgetary drain that Irish Steel represented. This was
important in the wake of the Economic and Monetary Union (EMU)
convergence criteria, particularly that demanding a reduction of deficits
and debts. On the other hand, the state felt that attracting ownership of
a proven multinational with an established track record in Europe could
serve as a necessary foundation for plant restructuring.
Indeed, this latter point would cement negotiations with Ispat: under
the ownership and direction of Lakshmi Mittal, Ispat had a history of
taking over loss-making steel operations in states such as Germany,
Mexico, Venezuela, Trinidad, and Indonesia and, eventually, not only
rescued them, but also made them profitable. As The Economist noted in
1998, ‘Mr Mittal’s secret is a combination of technological vision and
managerial good sense. The firms cut purchasing costs and lay off
workers.’2 With this in mind, the state did not open a bidding process per
se but, rather, seemed to approach the multinational, which had already
established successful operations in Western Europe and sought to
expand in the Single Market. One may argue that it would seem
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somewhat ironic for a coalition government including the Labour Party
to pursue such a strategy, especially considering Ispat’s history of firing
workers.
When turning to the negotiation of the conditions of the sale, one can
see that eventually Ispat was allowed carte blanche to set the terms of the
sale, while organised labour representatives from the plant were sidelined
during the negotiations despite concerns of massive lay-offs. As Joe
Flynn, the Regional Secretary for the Steelworkers Union, SIPTU, noted,
‘they led us up the garden path’ (Pallister, 2002). The main conditions set
by Ispat included a symbolic purchase price (of £1), writing off of preexisting loans and granting new cash contributions for plant restructuring
(totalling over £36 million), and granting financing aid in case of any
future potential claims which may arise based on any past financial
dealings (£2 million.) Having received over £38 million of state subsidies,
which was secured by the Department of Finance, the only condition to
which Ispat agreed was to take over the company for the next five years
without further subsidies. Once the state gained approval from the
Directorate General (DG) Competition of the European Commission on
the conditions of the sale, all of which would constitute a state aid under
Articles 87 and 88 of the EEC Treaty given that public funds were used,3
the deal was finalised.
Developments Surrounding the Pre-Sale Dynamics and
Flotation of Irish Sugar
Founded in 1933, Irish Sugar (originally under the name of Comhlucht
Siúicre Eireann) was the main processor of sugar beet in Ireland and
Northern Ireland. During the first half of the 1980s, the company
suffered heavy losses, given poor infrastructure. This resulted in a
sizeable state aid package between 1983 and 1986 of £58 million that
was used towards plant modernisation and restructuring.4 Although these
injections brought the company back to some profitability, high officials
in the company5 stated that the directors of Irish Sugar had considered
plans to privatise the company in the late 1980s (even before the
government officially asked for it), in order to increase the company’s
efficiency and long-term profitability. With this in mind, a ‘sleight of
hand’ was arguably pulled by four main directors of SDH (Sugar
Distributors Holding), of which Irish Sugar owned 51 per cent and which
was responsible for the sugar distribution.6 These directors – Charles
Lyons, Thomas Keleghan, Michael Tully and Charles Garavan – bought
the 49 per cent of SDH that was not owned by Irish Sugar for a price of
£3.2 million in 1989. SDH’s majority shareholder – Irish Sugar – whose
chief executive was Chris Comerford, approved this purchase. By 1990
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both the directors of Irish Sugar and members of the Fianna Fáil
government, under Charles Haughey, decided to float the company in
order to cement long-term stability while raising revenue for the state.
However before doing so, Irish Sugar would purchase the 49 per cent of
SDH held by the four shareholders for a price of £9.5 million. This
effectively gave these four directors a profit of £6.3 million even before
the sale began, pointing to a process where the partial owners of SDH
profited. Approximately five months after the flotation, these
developments were uncovered by Sam Smyth who would publish the
story in the Sunday Independent, offering the Republic one of its first
financial scandals of the 1990s.
Beyond this part of the privatisation process, wherein specific private
actors were able to unilaterally negotiate pre-sale profits, other elements
of the sale reflect how the process was a closed one similar to Irish Steel.
Before its sale in 1991, a ‘steering group’ was set up to analyse aspects of
the sale, including the volume of shares to be sold, share prices, the
maximum number of shares to be sold to any one investor, future
production, and solutions for the debt problems of the company. This
group would include representatives of the state (from Departments such
as Finance and Public Enterprise), Irish Sugar Directors, and various
advisers including lawyers and stockbrokers. Although the final sale
witnessed revenues of around £40 million, representative of 27,400,000
shares being sold, the negotiators of the details of the sale agreed that a
sum of £12 million of this revenue would not be directly transferred to
the Treasury, but, rather, would be re-invested into the company to write
off debts.7 In technical terms, given that this ‘re-investment’ was a use of
state funds (in this case, revenues generated from a privatisation) that
were injected into a company, one may effectively argue that this £12
million would actually constitute a state aid under Articles 87 and 88 of
the EEC Treaty, even though the Irish state did not apparently notify DG
Competition of this development.8
What seems significant in terms of the process is that members of the
steering group would include neither the workers in the company, nor
farmers who produced for Irish Sugar. The lack of significant role for
social interests was even recognised and justified by state officials: Mr
O’Kennedy, the then Minister for Agriculture and Food, clearly pointed
out in the Dáil that:
I have the greatest respect for farmer and trade union interest but
that respect cannot extend to the evaluation of one or the other to
the point where they take government responsibility. The Deputy is
wrong in thinking that the demands of one or the other will have to
be established as government policy.9
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Effectively, the only access that both of these social actors had to this
steering group was through ‘lobbying’ efforts that they made separately
to the directors of Irish Sugar. As one official of the company involved in
the sale stated, ‘it was not intended to be a closed process ... but it was
an unsophisticated method (of consultation and negotiation) in a
privatisation’.10 Such lobbying efforts by both social actors revealed five
main demands. First, as expressed by farmers, was the concern that a
large percentage of the company could be purchased by a few individuals.
As such, they demanded that not more than 15 per cent of the shares
should be sold to any one individual. Second, farmers wanted an
immediate increase in beet prices in order to offset the increasing
production costs. Third, workers (through SIPTU which was openly
against the privatisation) desired that employment levels would not be
affected by the sale. Fourth, employees also sought that a significant
number of shares of the company, equivalent to approximately 15 per
cent of the total, be offered to them. And fifth, and perhaps most
important, both farmers and workers demanded that each be offered
permanent representation on the (renamed) Greencore Board of
Directors.11 All five demands were either not met or only partially met:
before the sale, it was decided by the steering group that one individual
could hold up to 29.9 per cent of shares; beet prices increased only
slightly, some six years after the sale; employment fell from
approximately 3000 workers in the mid-1980s to approximately 2100
shortly after the sale; workers were offered 0.72 per cent of the total
number of the company’s shares;12 and even though farmers had Board
representation until 1993 and workers until 1996, after both respective
dates these actors were ‘pushed out’.13
The Sale of Telecomm Eireann
Telecom Eireann (TE) was historically the sole Irish telecommunications
operator that had the exclusive right to offer, provide and maintain the
Republic’s network infrastructure and services. Its monopoly position
was confirmed by 1984 legislation, guaranteeing TE the exclusive right
to conduct most forms of telecom carrier services in Ireland and maintain
state ownership of infrastructure assets.14 While still holding its
monopoly position before the effect of Brussels’ telecommunication
liberalisation initiatives that were to theoretically occur in 1997, the
negotiation of the partial denationalisation of TE occurred in 1995.
Vickers suggests that this was a reaction to the ‘forces of globalisation and
consolidation in the industry’ (Vickers, 1997: 77), which forced
technological change in the company. In early 1995, led by the
Department of Finance, the state opened a bidding process for a minority
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stake in TE. Two interested parties from the EU – KPN and Telia, the
Dutch and Swedish telecommunications operators –were eventually
short-listed to hold direct negotiations with officials from the
Department of Finance and TE’s Board of Directors in June 1995.
Together, both companies would form a new entity called Comsource,
where 60 per cent belonged to KPN and 40 per cent to Telia.
The first tranche sale negotiations (35 per cent), which were held
between June 1995 and March 1996, were led by the main actors from
Comsource, Finance and Public Enterprise. As in the negotiations
surrounding Irish Sugar and Irish Steel, representatives from organised
labour were not present, despite previous calls from the Communications
and Workers Union.15 The final agreement saw Comsource acquire
15,869,887 of TE’s ordinary shares and subscribe for 72,443,181 new
ordinary shares, representing 20 per cent of the company. Comsource
would also be granted an exercisable option to purchase 66,234,800
shares within the next two years, representing an additional 15 per cent
of the company. The purchase price for the first 20 per cent was P232.2
million, while the second 15 per cent was P253.9 million.16
Two findings are significant when determining how the first tranche
sale benefited the purchasers. First, officials involved in the sale suggested
in interviews that the price was below the net worth of the company.17
Moreover, examining the actual revenue generated by the state on this
transaction reveals that most of the payment was actually re-invested in
TE, the very company Comsource was partially taking over. This is based
on the following evidence: while Comsource did pay the Irish state
P253.9 million for the 15 per cent option stake, the fact that the original
20 per cent option witnessed subscription of new shares means that not
all of the P232.2 million paid out actually went to the Irish state.
Calculating the amounts paid to the state by way of purchasing preexisting shares, this actually corresponds to P41.7 million. But the money
that was actually paid into the company, by way of subscription of new
shares, was P190.5 million. In other words, only 18 per cent of what was
paid out by Comsource saw its way to the Treasury. This finding suggests
that privatisations of profitable companies are not always embarked upon
in order to maximise funds (revenue) for the state; rather, this case seems
to illustrate that payments are used as ‘re-investment’ towards the
companies purchased by the owners – this point will be crucial when
evaluating the apparent ‘gains’ made by labour in 1999 prior to the
second tranche flotation as discussed in more detail below.
The second condition set by Comsource was its desire to maintain TE’s
monopoly position even after the sale was completed. As one negotiator
stated, Comsource demanded that national legislation regarding the
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liberalisation of the Irish telecommunications sector would not be
implemented: this effectively prevented other competitors from setting
up. In the negotiations between June 1995 and March 1996, Comsource
demanded that under its partial ownership TE would be given four years
free from competition to further develop its network by revamping its
infrastructure, rebalancing tariffs and restructuring its services. By March
1996 the Irish state had agreed to such conditions; yet, it was fully aware
that such an agreement was subject to approval from the Commission’s
DG Competition.18 Given Comsources’ demands, the Irish government
sought additional periods for the implementation of the Commission
Directives with regard to full competition in the telecom market in
Ireland; unless derogation was granted, Comsource stated in March 1996
that it would not sign any deal. After informal negotiations in the summer
and fall of 1996 between members of the Irish state (led by permanent
representatives and Finance) and DG Competition officials, the
Commission agreed in November to comply with the request, thereby
allowing the partial privatisation deal to be signed-off in December 1996.
In sum, similar to the sales of both Irish Steel and Irish Sugar, there was
little participation in the policy making from social actors, including
organised labour during this sale of 35 per cent of TE’s share capital.
The situation for organised labour was to apparently change when the
rest of TE was floated in 1999: labour was to have some role in the
privatisation process by way of the Employer Share Ownership Plan
(ESOP), which was composed of two separate trusts, ESOT (Telecom
Employee Share Ownership Trust) and APSS (Telecom Approved Profit
Sharing Scheme.) But, even the unions would claim that this deal lacked
substance. As Patricia O’Donovan, deputy general secretary at the Irish
Congress of Trade Unions (ICTU) claimed, ‘the unions in Telecom
Eireann had to fight tooth and nail to get a meaningful scheme in place.
At the time there was a willingness to give a token share ownership,
however, when it came to meaningful profit sharing, the company balked
at it’ (Thesing, 1998).
The details of the ESOT Share Transfer agreement of 13 May 1999
had the following elements: 3.67 per cent of the companies’ shares would
be directly transferred to employees in ‘exchange for progress in
achieving transformation measures’ under the long-term plan of the
company; 1.33 per cent would be transferred at a later unspecified date
‘on the basis of achieving further progress’; and 9.9 per cent was sold to
ESOT for a price of P114.3 million, which would be paid to the
Treasury.19 This meant that each share of the 9.9 per cent was sold for a
value of approximately over P1.90; this was significantly less than the
P3.65 paid by the public.20
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However, deeper analysis of the ESOT share purchase agreement,
coupled with the financing of the 9.9 per cent of the purchase,
demonstrates that the ‘bargain’ for organised labour was not only
unequal to that previously negotiated by Comsource, but also
immediately beneficial to financial capital actors. Firstly, the total amount
paid by workers for their stake was actually much more than that
previously paid to the state by Comsource for a larger percentage of the
company. As was discussed above, approximately P41.7 million
(representing approximately one-fifth of the payment) was paid by
Comsource to the state for the 20 per cent option, which compares to the
P114.3 million paid by employees for 9.9 per cent of the company: over
P70 million more was paid by the workers for half the amount of the
share capital. One would have expected roughly equivalent purchase
prices for both economic actors and organised labour if both actors were
on equal negotiating footing. Secondly, because employees did not have
all of the financing required to buy the 9.9 per cent, they were forced to
‘borrow ... P82.5 million from Zurich Capital Markets Group’.21 The
conditions of the loan stated that ‘the loan ... will be repaid out of
dividends received by the ESOT (the Trustee) on the ordinary shares it
holds after payments of its fees, expenses and tax liabilities’.22 There was
a further stipulation that ‘if dividend payments exceed the minimum
repayments required by the borrowings ... the Trustee must apply the
dividends ... in repayment of the borrowings or the payment of interest
on such borrowings’.23In other words, dividends could not be
immediately distributed to beneficiaries (the workers) for a total of 10
years (which was the amount of time the loan was held) but, rather,
would effectively go towards financial capital from whom the loan was
secured. From this perspective, although it appears on first glance that
labour appeared to have made substantial gains in the second round
flotation, its actual tangible benefits may not seem as significant as one
may have otherwise expected. Further, even though workers were
promised a seat on the board of directors, this was rescinded shortly after
the second tranche sale. As the President of the Labour Party, Minister
Proinsias De Rossa stated in an interview, ‘this is totally contrary to the
trend towards worker participation’, adding that ‘existing worker
participation legislation and practice is already very weak compared with
the norm’.24
In sum, taking all three sales together leads one to conclude that there
has been a disproportionate influence by capital actors during the
privatisation negotiation process in Ireland, pointing to the elitist nature
of privatisation policy making. The direct sale of the loss-making
company Irish Steel witnessed the buyer Ispat unilaterally negotiating the
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conditions it desired, to the sum of over £38 million in Treasury funds.
The pre-sale dynamics of Irish Sugar witnessed private actors buying and
then selling their minority stake in subsidiary of Irish Sugar (SDH) before
the actual privatisation, making a sizeable sum in the transaction.
Moreover, during the negotiation of the flotation itself, both organised
labour and farmers exercised little influence in determining the nature of
the sale despite various demands. Finally, the sale of the first tranche of
Telecomm Eireann saw Comsource (KPN and Telia) setting the main
conditions of the sale, with the support of state officials who negotiated
alongside them. These conditions included an effective re-investment of
funds towards its purchase (rather than direct transfer to the Treasury)
and a derogation of liberalisation in the Telecom sector (as demanded by
European Community law) in order to maintain TE’s monopoly position.
Although the second tranche sale witnessed participation of labour in the
negotiation process, offering a contrast to both the first tranche sale as
well as the other privatisations examined, it was argued that labour’s
negotiation fell short on two grounds. Firstly, the price paid for their
shares was disproportionately higher than that paid for by economic
actors some years earlier. Secondly, employees had to gain a substantial
loan in order to finance their purchase, the conditions of which
effectively stated that employees would not receive potential dividends
for a substantial period of time. This suggests that one of the main
immediate beneficiaries was not the workers per se, but, rather, the
financial capital actors who granted the loan in the first place. Indeed, the
fact that workers did have some participation in the second tranche sale
of TE is not inconsistent with the idea that ‘elitism’ was manifest in its
sale. As previously discussed, elitists would contend that what is
significant is that disproportionate (not necessarily always exclusive)
influence of capital occurs. This suggests that even though TE did witness
labour gaining some (limited) access to the policy-making process, the
fact that its gains were significantly comparatively less than capital points
to the elitist nature of the process.
Irish Privatisation in Comparative Perspective
It is also useful to place the Irish experience in comparative context with
other European sales of public enterprise. How similar have the dynamics
been when compared to developments across various states in Europe? In
order to answer this question, attention is briefly paid on experiences of
EU states such as Spain, France and Italy.
In Spain, the sale of the National Industry Institute (Instituto
Nacional de Industria or INI) companies in the 1980s and early 1990s
witnessed a ‘dual’ privatisation process consisting of both financial
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restructuring and recapitalisations. Characterised by virtual trade union
absence, this dual process saw the active participation of both financial
capital that was helping finance the companies before their sale, as well
as multinational companies who took over the companies. With regard to
the latter, after massive debt write-offs and cash injections were made by
the state (Ministry of Economy and Finance), companies such as Seat and
Enasa were sold for symbolic amounts in a similar fashion as Irish Steel
(Chari, 1998). Later privatisations, as seen in the case of Iberia Airlines,
witnessed more profitable companies being partly sold off to private
investors. In a similar dynamic to that in Telecom Eireann, those who
purchased Iberia bought newly subscribed shares. This effectively
resulted in a significant part of the purchasers’ money actually being reinvested in the company, not going towards the Treasury (Chari and
Cavatorta, 2002). In France, the Noyau Dur (or the strong nucleus of
shareholders) demonstrated the ability to have taken over large chunks of
controlling shares, which were floated at a price less than the market
value (Maclean, 1995: 276). Interestingly, this under-pricing would occur
after the Finance Ministry, as particularly seen in the case of Credit
Lyonnais, would pump large amounts of state aid into the company.25 In
Italy, the privatisation programme accomplished by the centre-left
governments (started by the previous Amato and Ciampi Cabinets),
proved to be an important source of revenue for the Italian government,
where sales between 1996 and 2001 generated approximately P82 billion
and contributed to reducing Italy’s debt in its drive towards attaining
EMU convergence criteria (Visco, n.d.). The existence of ‘golden shares’
ensured the state’s involvement in the negotiations and, due to what can
be described as a hierarchical structure within the companies themselves,
business elites were over-represented around the negotiating table to the
detriment of the trade unions. For example, 32.9 per cent of Telecom
Italia (the once state-owned monopoly with 126,000 employees) was
floated in 1997 for approximately P10,000 million. The state maintained
an important stake in terms of voting power through golden shares, while
the Treasury Ministry further managed to build up a stable pool of
investors (banks and corporations), referred to as a Noyau Dur similar to
France. This is especially evident in the case of the Agnellis, a member of
the Noyau Dur, that was able to establish control over Telecom through
their financial holding, IFIL. Evidence of similar dynamics to the Spanish,
French and Italian sales are also seen in Portugal26and Austria.27
Given these experiences in other EU states, one may argue that
existing studies on privatisations point to a similar dynamic to that found
in Ireland: capital actors have taken predominant roles in the formulation
of the details of privatisations (to the relative exclusion of other social
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actors such as labour) and worked alongside state officials (usually those
from the Ministries of Finance.) What is significant to note is that,
regardless of the pattern of organised interests that theoretically best
defines economic policy making in each state – whether that be
corporatist, pluralist, or elitist – privatisations are generally reflective of
a closed, opaque process in which private (economic) actors have taken
a leading role, pointing to the relevance of the ‘elitist’ model in
characterising sales of state companies. For example, although the
literature has theoretically defined aspects of Spanish economic policy
making as being ‘corporatist’ throughout the 1980s (Perez Diaz, 1993:
220–230), the privatisation process throughout this time can been
labelled as ‘elitist’ (Chari, 1998). Similar arguments can be made for
Austria as well and, as has been drawn out, the case of Ireland. The next
section thus examines why economic actors have enjoyed this privileged
position in privatisation policy making and also considers how
commensurable the findings in this work are with pre-existing ideas
raised in the Irish public policy literature.
Explaining the Elitist Nature of Privatisations and Situating the
Findings in the Pre-existing Irish Public Policy-Making Literature
Why were capital actors allowed a leading role when negotiating with the
state, while other social interests were generally marginalised throughout
the process? One theoretical explanation, echoing neo-liberal sentiments
in Western Europe, is that economic actors had a predominant role
because organised labour did not care to be fully involved. The argument
here is that the state could only negotiate with those who offered
expressions of interest and, given organised labour’s apathy, they were
not subsequently consulted. However, such an explanation seems weak
based on the evidence, especially seen in the case of Irish Sugar. Despite
both workers’ and farmers’ concerns of the details of the sale, there was
no serious ‘interest-representation’ mechanism to express such concerns
given both interests’ exclusion from the ‘steering group’.
A second, perhaps more cogent, theoretical explanation combines
the work of Scharpf (1997), which outlines the importance of
institutions in shaping policy actors’ preferences, with other studies by
Laver (1997), and Shepsle and Bonchek (1997), which elaborate on
ideas of private interests and rational behaviour of negotiators. While
the latter authors particularly emphasise that policy-makers are rational
actors which have certain preferences and resources that may be used in
order to achieve preferred outcomes, Scharpf highlights that policy
bargaining by such actors takes place within an institutional structure.
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By ‘institution’, Scharpf refers to a system of legal rules and social norms
that frame the actions that negotiating actors may choose (Scharpf,
1997: 38).
One may argue that there were two main dimensions to the
institutional structure – which ultimately guided which actors would
participate and exert disproportionate influence in the privatisation
process – where the first relates to dynamics at the supranational level
and the second to those at the national level. The first more
supranational dimension, which also served as a framework for other EU
states that embarked on public sector reform, were the EU rules that set
the context for privatisations. Of importance here were two initiatives
from Brussels since the mid-1980s/early 1990s. One initiative was the
EMU, which called for states to pursue (domestic-level) policies in order
to reduce deficits and debts. Policies consistent with these ends include
either selling loss-making companies in order to prevent future budgetary
drain or selling profitable enterprises in order to raise revenues. The
other EU-led initiative was concerned with overall liberalisation of
member state economies in the drive towards the completion of the
Single Market. An obvious means to achieve this was to reduce state
economic participation while opening up markets in important sectors to
other investors from the EU.
A second, more domestic, dimension to the institutional structure
relates to the place of privatisation policy vis-à-vis other macroeconomic
policies in Ireland. While policies, such as tax incentives, were clearly
institutionalised within a bargaining structure wherein labour was
guaranteed a role by way of social partnership agreements since the
1980s, privatisations fell outside this scope. This effectively meant that
labour was not guaranteed a role in the privatisation policy process. This,
coupled with the fact that collective bargaining was not a constitutional
requirement28 per se when privatising, helped structure an environment
that was certainly not conducive to labour participation. More
importantly, it helped create an environment wherein actors who shared
similar goals – namely political and economic actors – could negotiate
together based on their self-supporting interests, largely free from any
external influence given the institutional structure that effectively ‘guided
them’ (in terms of establishing what needed to be done in the wake of EU
initiatives) and ‘protected’ them (from having to include labour in the
process, given that privatisations fell outside the scope of social
partnership agreements).
In context of these two institutional dimensions, what exactly were
the interests that both main actors shared, how can they be seen as selfsupporting and why could they inevitably act alone? On the one hand,
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from the perspective of political actors heading Finance, who were
influenced by the rules and norms of the supranational dimension of the
institutional structure, there was a two-fold desire: to gain state
withdrawal from companies suffering from a history of losses (Irish Sugar
and Irish Steel) and to gain revenues through the sale of profitable
companies (Telecom Eireann). This would ultimately serve to these
actors’ goals of preventing long-term budgetary drain (or injecting more
revenue into the Treasury) and increasing overall economic
competitiveness by means of state withdrawal in important sectors such
as Telecoms, while attracting EU investment. On the other hand, again
guided by the supranational dimension of the institutional structure,
economic actors desired to move freely to new markets within the EU by
attaining financially restructured companies according to terms they
demanded (Irish Steel and Telecom Eireann), or re-sell part of the
company back to the state for a price greater than their purchase (such as
that of Irish Sugar). Both of these developments would eventually serve
to economic actors’ goals of attaining viable companies in the EU that
were potentially profitable. Both actors needed each other: economic
actors needed the state (that was willing to negotiate) in order to achieve
their goals, while the state similarly needed economic actors (in order to
take over the company). Further, both of these actors’ self-supporting
goals were not consistent with those of other social interests, who were
obviously wary of privatisation given potential of downsizing, wage
insecurity, and job precariousness. However, such social actors could be
excluded from the process, given that the domestic dimension of the
larger institutional structure did not guarantee their participation because
privatisation policy making was outside the scope of policies negotiated
under social partnership.
Why did economic actors eventually exercise the upper hand over
political actors in privatisation policy making? This asymmetry can be
understood in terms of potential benefits and losses for each of the actors
should a deal not have gone through, which can also be understood in
context of the supranational dimension of the institutional structure. In
the worst of the cases, the main fear for economic actors if the
negotiations failed to meet their demands would have been the decision
not to invest in Ireland. Although there were clearly benefits in wanting
to invest in Ireland, given the increasing transnationalisation of capital in
Europe, the potential losses should the deal have crumbled were minimal,
given that they were multinationals which had already invested
throughout the Single Market and thus had firm Community
foundations. Given that economic actors had more to gain than to lose
by privatising, it was a rational strategy for them to attempt to set the
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conditions of the sale. However, the main fear of the state was that lossmaking companies (such as Irish Sugar and Irish Steel) would have
continued to drain budgets, while the state would have potentially lost
out on a firm source of revenue by selling profitable companies (Telecom
Eireann.) From this perspective, privatising made budgetary sense and
not privatising would have been against the general European goals of
EMU convergence criteria of the 1990s, which demanded reduced
budgetary deficits and debts, and would have gone against the general
principles and objectives of the EU Single Market, which demanded
increasing liberalisation and free-market competitiveness (by way of a
reduction of state intervention in the economy). From this perspective,
the state had few benefits in either holding on to loss-making companies,
or forgoing potential revenue from sales of profitable ones. The state also
potentially suffered more risks in not privatising once the process had
been started, because that this may have been perceived by other
members of the EU-15 as non-compliance with the overall objectives of
both EMU and Single Market policies. Given that the state feared that it
had more to lose than to gain by not privatising, it was a rational strategy
to allow economic actors to take the lead in determining the conditions
of the sales and to simply ‘get the deals done’.
It is useful to ask how commensurable are these findings and
explanations with pre-existing ones on Irish policy making. As discussed
earlier, authors such as Hardiman have pointed to the importance of
social partnership in some aspects of Irish (macro)economic policy
making, with a focus on nation-wide wage agreements between state,
capital, and social partners since the late 1980s. This present study has
concluded that the elitist model most adequately explains privatisations
in Ireland throughout the 1990s. Despite the apparent differences,
however, one may conclude that the explanations presented here are not
necessarily incommensurable with findings in the pre-existing literature,
pointing to the idea that different models of interest intermediation may
be relevant in understanding different economic policies given that
different institutional contexts may be at play over time.
As above, the elitist nature of privatisations in Ireland can be
explained based on the idea that EU rules and norms, coupled with the
fact that privatisations never historically formed a part of any socialpartnership agreement, helped set the context that allowed rationally
acting economic and political actors privileged positions in policy
making. Using the same reasoning, one can argue that the continued
success of labour in certain (macroeconomic) policy areas, such as taxes
and wage bargaining, can be explained precisely because of a larger
institutional environment: although the need for partnership agreements
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in the 1980s can be explained as a reaction to economic crisis that was
faced by the country throughout the 1980s as earlier discussed by
Hardiman, over time social-partnership has become entrenched as the
means to negotiate certain (macro)economic policies over the last 15
years. This points to the argument that ‘social partnership’ has itself
become a ‘institution’ – or part of the rules – that must be followed when
determining how certain (macro)economic policies are to be negotiated
and developed. In such (macro)economic policy areas, then, labour will
continue to have a significant policy-making role, allowing one to argue
that the larger institutional structure has helped influence who has
gained, and will continue to have, cemented negotiation positions
regarding certain policies. In some economic policies, labour has thus
held for a significant amount of time, and will continue to hold, a strong
‘power’ position (that did not particularly exist during the privatisations)
vis-à-vis the other actors in different economic policy areas, such as wage
agreements, tax reform and social welfare payments. From this point of
view, if organised labour was not satisfied with, for example, wage
agreements at a national level, both economic actors and the state ran the
serious risk of a justifiable retaliatory action by labour, such as workstoppages or a nation-wide general strike, because an institutional
structure surrounding negotiations of these policies had been established.
Thus, capital and state actors may have reasonably feared the potential
larger costs that outweighed any potential benefits if labour was not
treated as an equal partner during wage agreements. However, the same
could not be said for privatisations. Given that the policy itself was
guided by different institutional structures that can be characterised by
both the supranational and domestic dimensions, namely EU initiatives
coupled with no codified rules that guaranteed labour participation when
privatisations were to be discussed, both capital and state actors could
negotiate policy without significant participation – and even backlash –
from labour.
Conclusions
Set in the context of the literature on patterns of organised interests in
Western Europe, this study has had two main objectives. The first was to
examine the policy-making process when Irish state enterprises were
sold, focusing on the role of interest groups in sale formulation and to
characterise this process in light of different theoretical patterns, namely
pluralism, corporatism and elitism. The second was to explain why the
theoretical pattern that emerges does so and to situate these findings in
context of the Irish policy-making literature.
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The evidence in the first section suggested a disproportionate
influence of capital during the privatisation negotiation process in
Ireland, pointing to the importance of the elitist school. Specifically, the
sale of Irish Steel saw Ispat negotiating the conditions it desired,
resulting in over £38 million in Treasury funds being transferred before
the sale. Pre-sale dynamics of Irish Sugar witnessed private actors
profiting by buying and then selling their minority stake in the
subsidiary of Irish Sugar (SDH), before the actual privatisation. Further,
during the flotation, both organised labour or farmers exercised little
influence in determining the nature of the sale. The first tranche sale of
Telecom Eireann (TE) saw Comsource setting the main conditions,
including a fund re-investment towards its purchase and a derogation
of liberalisation in order to secure TE’s short-term monopoly position.
While the second tranche sale of TE experienced some participation by
organised labour, it was suggested that the price paid for its shares was
disproportionately higher than that paid for by economic actors some
years earlier and, that having to secure a substantial loan to finance its
purchase theoretically prevented employees from receiving potential
dividends that were earmarked to the financial capital granting the
loan. It was argued that even though the second tranche sale witnessed
labour achieving limited access, the idea that its gains were
comparatively less than capital points to the elitist nature of the
process. Similar dynamics were also manifest in sales in other European
countries.
In explaining why capital is granted a privileged position in
privatisation negotiations, the second section underlined the importance
of both the institutions in shaping policy actors’ preferences and the
rational behaviour of main negotiators. Attention was particularly paid to
two main dimensions of the institutional structure. The supranational
dimension highlighted the larger EU institutional rules and norms that
called for both deficit and debt reduction, as well as increased
liberalisation of the economy. The domestic dimension highlighted that a
privatisation policy per se has never formed part of the wider social
partnership agreements, thereby not guaranteeing labour a role in
privatisation policy-making process. It was argued that both dimensions
of this institutional structure served as a framework for capital and state
actors, who were bound by their symbiotic goals, to negotiate rationally
with relatively little influence or interference by labour. And it was also
argued that the supranational dimension, in particular, helped define an
asymmetrical power relationship between the two actors. Because the
state’s potential costs (by not complying with overall EU objectives: fiscal
tightness and liberalisation) were greater than its potential benefits if the
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privatisation deals did not go through, it was a rational strategy that
economic actors were allowed disproportionate influence in setting the
conditions of the sales.
It is useful to extract broader lessons that may be of value to students
of Irish politics. The main one to be derived from this study is that some
patterns of organised interests may offer stronger insights compared to
others in explaining policy making in certain areas. In other words,
although the evidence in this policy area suggests the importance of the
‘elitist’ school in explaining privatisations given the very nature of the
deals set in context of a larger (EU and domestic-based) institutional
structure, which helped define which actors could negotiate and which
would be sidelined, this is not necessarily incommensurable with the
findings in the pre-existing literature pointing to the importance of social
partnership arrangements in Ireland. As Murphy cogently argued, the
Irish experience indeed demonstrates that no country ‘fit(s) any model of
interest group activity precisely’ (Murphy, 1999). With this in mind, the
ideas raised in this article suggest that in order to understand why
different models emerge in different areas in different states, attention
must be focused on the institutional structure at the time – which may be
a result of developments at both the supranational and domestic levels –
coupled with the self-interests and symbiotic goals of rationally acting
policy actors whose participation is guided by, cemented by, and even
protected by the larger institutional structure. From this perspective,
future research should be concerned not so much about finding which
model of organised interest is the most significant or best characterises
the Irish policy-making process, but rather, why different models are
relevant in different policy areas at different times.
Acknowledgements
RSC and HM thank state and company officials in Dublin and Brussels
who were kind enough to be interviewed and allow access to documents
throughout the study. RSC is particularly grateful to Michael Gallagher,
Michael Laver, and Michael Marsh for comments and encouragement
during the writing and research phases, to Billie Crosbie for comments
on drafts, and, as always, to Martha Peach for providing a ‘home-base’ at
the Instituto Juan March in Madrid. Both authors especially acknowledge
the constructive criticisms and comments by the two anonymous referees.
RSC and HM acknowledge the generous support of the HEA for its
financial assistance through the Institute for International Integration
Studies (TCD) and RSC thanks the continued generous support of the
Arts and Social Science Benefactions Funds (TCD).
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Notes
1. Crouch and Menon also mention two other patterns, namely consociationalism and
étatisme. However, they themselves argue that, ‘Consociationalism (wherein
representation of groups is based on religious, cultural and ethnic divisions; rather
than on specific economic interests in society as seen in corporatism) might be
regarded as a specific form of corporatism.’ Further, étatisme, which contends that the
‘state takes a leading role in allocating functions to organized interests and in choosing
(policy-making) partners,’ may be considered to be a pattern based exclusively on
historical developments in French politics where the role for independently minded
interest groups seeking to maximise their influence (and hence, benefits) in the policy
process is, by definition, limited. Please see Crouch and Menon, 1997: 154.
2. The Economist, 10 January 1998.
3. For details, please see the Community’s Official Journal No L121, 1996/05/21, p.16.
4. This aid, however, was not notified to and officially approved by the European
Commission as required by Articles 87 and 88. As such, EU approval was not sought
on this aid, although one would have expected that the Irish government was legally
bound to notify the Commission.
5. Interviews with Greencore officials, January 2000.
6. The following discussion of the pre-sale dynamics is in Kerrigan, 1996: 273–196.
Aspects of the dynamics before the flotation are also found in the Official Journal,
1997, L 258, when the European Commission investigated and later fined Irish Sugar
for its non-compliance with article 81 (ex 86) of the EEC Treaty as discussed below
(note 8).
7. Interviews with Greencore official(s), January 2000.
8. In May 1997, the Commission imposed a fine on Irish Sugar in the amount of ECU
8,800,000 based on various abuses of its dominant position between 1985 and 1995
that were inconsistent with Article 81 (ex 86) of the EEC Treaty (please see the Official
Journal, 1997: L 258). Although Greencore attempted to overturn the decision
through the EU’s Court of First Instance (CFI), the CFI ultimately upheld the
Commission’s decision in 1999 (please see the Judgement of the Court of First
Instance (Third Chamber) of 7 October 1999; Irish Sugar plc vs. Commission of the
European Communities; Celex number: 697A0228). Despite the Commission’s
investigation into Irish Sugar’s/Greencore’s abuse of its dominant position, however, it
has yet to fully analyse whether or not the state aid aspects, either when the company
pertained to the state or after its sale, are inconsistent with Articles 87 and 88 (ex 92
and 93) of the EEC Treaty which state that any form of aid with public funds (such as
recaps, cash injections or debt write-offs) must be notified to the Commission by the
state and later approved by DG Competition. For an excellent analysis of these and
other aspects of EU competition policy, please see Cini and McGowan, 1998.
9. Dáil Eireann, Vol. 400, Questions, Oral answers, 21 June 1990.
10. Interviews with Greencore official(s), January 2000.
11. When it belonged to the state, Irish Sugar was subject to worker participation whereby
one-third of the Directors would be elected by the workforce.
12. 194,892 shares went to employees based on 109 shares per employee as discussed in
the Greencore Offer of Sale, 1991, 25.
13. As quoted by a present Greencore high-ranking official in interviews, January 2000.
14. Telecom Eireann, International Offering Memorandum, Dublin, 1999, 63.
15. ‘Promises, Promises’, Business and Finance Magazine, 12 June 1997.
16. Telecom Eireann, 1999, 136.
17. Interviews with Department of Finance Officials, February–March 2000.
18. There were three main aspects of Community liberalisation regulations in the Telecom
sector. First, Article 3d of Directive 90/338/EEC stated that direct interconnection of
mobile telecommunications networks with foreign networks was to take place as of
January 1, 1997. Secondly, Article 2(2) of the same Directive of 1990 provided that
the exclusive rights granted to Telecom Eireann with regard to the provision of voice
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19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
telephony and network infrastructure had to be abolished by January 1, 1998. And
Article 2(2) of the Directive stated that by July 1, 1996, restrictions on the following
services had to be lifted: networks established by the provider of the service,
infrastructures provided by third parties, and the sharing of networks, other facilities
and sites. See Official Journal L 41, 12 February 1997, 10, Commission Decision of
27 November 1996.
Telecom Eireann, 1999, 137–138. The actual price was P241.3 million minus the
contribution of P127 million given by Telecom Eireann to ESOT for their purchase of
the 9.9 per cent; this leaves a total purchase price of P114.3 million.
9.9 per cent of the company represented approximately 218,574,842 shares. If the
total cost was P114.3 million, each share would cost approximately P1.91.
Calculations based on data presented in Telecom Eireann, 1999, page H-1.
Telecom Eireann, 138.
Ibid.
Ibid.
The Irish Times, 1 June 1999.
The Economist, 6 February 1999.
In Portugal, where the Treasury has raised over USD 5.3 billion between 1985 and
1995, privatisations have been generally associated with downsizing of workforces
which had little influence in the negotiation processes as seen in Telecom Portugal’s
sale in the late 1990s. Please see the Ministry of Finance (Portugal), Privatisation and
Regulation, September 1999.
In Austria, the latter part of the 1990s has been characteristic of a large number of sales
that some commentators contend have given ‘windfall profits’ to the buyers. Please see
Kuhn, 2000: 21–35.
As Kerr argues, ‘It would appear that the courts are not prepared to accept that the
constitutional guarantee of free association includes a right to have ones trade union
recognised by ones employer for collective bargaining purposes and have held that
there is no duty placed on an employer to negotiate with any particular body of
citizen.’ See Kerr, 1997: 367.
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R.S. CHARI is a Lecturer in the Departmnt of Political Science, Trinity College Dublin
(TCD), and a Research Associate of the Institute for International Integration Studies (IIS),
TCD. He has previously published in journals such as West European Politics, Electoral
Studies and Government and Opposition.
H. McMAHON is a Doctoral Candidate in the Department of Political Science, TCD.
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