Management adaptation of business association services: long-term stability 1783-2012 and ‘change points’ for Irish chambers of commerce

It has been widely recognised that associations face managerial challenges because their core collective services of representing and lobbying on behalf of their members are non-excludable. These are delivered to members, but it is impossible to prevent consumption by others without being non-members and contributing to their costs (‘free riders’). For example, all relevant firms benefit from a change in government regulations that an association has encouraged, such as tax reduction or tax reform, and all businesses benefit from new infrastructure that an association provides or encourages others to provide. Olson (1971), using collective action theory, suggested that this can lead to chronic under-provision, because managers combine collective services (that cannot exclude free riders) with individual services that only members can access. The fees or incentives for membership to access individual services then provide the resources to deliver non-excludable services. This is often referred to as combining the ‘logic of services’ for excludable activities and the ‘logic of influence’ for the non-excludable activities (Streeck and Schmitter, 1991).

The resulting dual service structure is a form of ‘bundling’. It has been found widely in studies of trade associations (van Waarden, 1991), and generally strengthens retention in many member organisations (Bhattacharya, 1998). More generally, bundling is a managerial strategy to gain advantages of economies of scale and scope from combining service management, marketing and delivery costs. There can also be benefits from ‘cross-shopping’ whereby the provider is seen as a single point of call (Paun, 1993; Bennett and Robson, 2001). This has become familiar in supermarkets and telecoms provision and is frequent for service advisors such as consultants, accountants and lawyers (Dixon and Verma, 2013), who in some respects are similar to association advisers.

Bundling of association services offers the same general advantages of economies of scale and scope, with the additional incentive that it mitigates free-rider behaviour by restricting access to some services to incentivise membership (Olson, 1971; Bennett and Robson, 2001; Bennett and Ramsden, 2007). Perry (2012) has recently demonstrated some influence of this strategy for sector associations comparing Ireland and New Zealand. However, it is important to recognise that sector associations usually draw on stronger incentives for membership than available for bodies like chambers, such as product quality and price controls, especially where cartels can operate. Chambers of commerce rely on representing general community-wide interests for a locality or a region, which usually offers few opportunities for market or price control. This suggests that bundling will offer them greater advantages, which will in turn lead to a higher level of individual service orientation than in trade associations.

Bundling also raises entry barriers for competitors, favouring incumbents. This has been a particular advantage for chambers, as the oldest established business associations. Although market entry is in theory easy, since in a private law system anyone can set up an association, successful large associations take time and cost to develop, with established brand recognition being a valuable asset that reduces search costs for members and raises status with those lobbied. Of course, incumbency may be negative if management is slow to adapt, with strong ‘path dependency’ increasing their vulnerability to changed demands (Olson, 1971; North, 1990; Bennett, 2011). Indeed, chambers have been open to criticisms as conservative, ‘old fashioned’ and having complex and time-consuming governance to achieve consensus through committees. A reform by the Irish chambers national association (Chambers Ireland: CI) explicitly sought to remove any ‘fuddy duddy’ image by re-focusing on service quality (CI, 2004: 17).

Bundling strategies provide one point of entry for investigating long- and short-term managerial adaptation. They suggest that, over time, chambers will develop a broad mix of excludable and non-excludable services, but with strong focus on individual services to offer major incentives for members to join. Additionally, when short-term external pressures increase, managers will respond by increasing excludable services to increase incentives for joining and retention. Chambers will also be under greatest pressure to make these changes when the external pressures are largest. This leads to examining significant ‘change points’.

Transaction cost economics (TCE) provides a more detailed approach to understanding the incentives for different chamber services. TCE seeks to measure characteristics of service organisation to assess the benefits of different management structures. Commonly, this has been applied to the choice of producing in-house rather than outsourcing (Williamson, 1985). However, TCE can be applied more broadly to assess the management of any organisation or service.

For associations, Hirschman (1970, 1982) used TCE to argue that non-excludable services gain transaction cost advantages from the loyalty and commitment of their members: loyalty, voice and involvement with association management incentivises members to join and reduces the chances of exiting. This can be combined with some unique service benefits if commitment and solidarity of members are developed as a broader strategic advantage, e.g. through networking and marketing opportunities that businesses would find difficult to access without membership. The actual process of self-selection by joining an association indicates interests in common that, in effect, prescreen contacts to be like-minded and, hence, relevant in terms of supply, markets or sector concerns. This ‘prescrutiny’ is an advantage over most other networks, since it allows a more ready development of trust between firms. This can be particularly significant in a local or regional setting where a sense of community, clustering, and group solidarity is more likely to develop; so-called social capital (Bennett, 2011). For example, the Dublin chamber has argued that: ‘our members join not just out of self-interest. Many join from a sense of responsibility in relation to their community and their city and the opportunity the chamber offers to fulfil this duty’ (Dublin Chamber of Commerce, 1989: 2).

These features offer potential for some unique transaction cost advantages for chambers over other market agents. For example, Williamson (1991) and Ostrom (2000) argue that trust and commonality of interests between businesses through an association reduce transaction costs in situations where uncertainty and risks are higher, where transactions have high volumes and frequency, and where asset specificity is high introducing ‘lock-in’ effects. Associations emerge and succeed because of specific local and temporal circumstances, which have these characteristics. Taylor and Singleton (1993), Schneiberg and Hollingsworth (1991) and Donner and Schneider (2000) provide empirical evidence of the significance of these incentives for a number of cases of trade and local business associations.

For the specific case of the chamber of commerce, Dawley et al. (2005) demonstrate the validity of these incentives for board members in the US chambers. Survey evidence from UK chamber managers shows how transaction cost advantages derive from combining specialist staff skills with member-member and chambermember marketing opportunities. Cost reductions derive from service inter-connectedness for high frequency, medium cost, and medium intensity services, where there is high personnel and transaction specificity (Bennett, 1996), in line with the general TCE expectations suggested by Schneiberg and Hollingsworth (1991) and Taylor and Singleton (1993). Cost advantages of chamber services draw particularly on trust relationships that combine ‘calculative’ or ‘self-interested’ trust (to get something from a network), with personal trust and social rewards (Moellering, 2003; Bennett and Robson, 2004; Bennett and Ramsden, 2007). Cost and quality benefits from trust have been found to be particularly important for the ‘soft’ supports of advice and information when linked to yield ‘hard’ impacts (on profit and turnover). Chambers appear to offer more benefit from the combination of ‘hard’ with ‘soft’ supports than most other associations (Ramsden and Bennett, 2005). This provides advantages over the general market for management consultancy and business advice.

TCE suggests that chamber managers will try to increase the use of trust-based and networking services to balance free riding. These efforts will tend to increase over the long-term and will also be developed as a response to short-term challenges when members are more prone to leave, for example, during economic crises. Following Ostrom (2000), the effects will be greatest where uncertainty and risks are higher, for services with high volumes and frequency, and where asset specificity and ‘lock in’ effects are strongest.

Management strategy for bundling and reducing transaction costs can also be interpreted within the theory of organisational evolution, to understand how incentives change over time. Alchian (2008) and Alchian and Reuf (2006), using ecological analogues, argue that organisations enhance durability by adapting goals, maintaining boundaries that demark their specific domain of activities and ‘exclusivity’, and by differentiating their activities and management from competitors. Ecological analogues are particularly useful for examination of transitions and periods of change, showing how changes in the environment influence goals, boundaries and activities. Successful management of ‘change periods’ requires innovation and entrepreneurship to trial new practices, efficient selection and retention processes to adapt existing practices and develop new ones, and internal managerial ‘struggle’ to ensure efficient allocation of resources against constraints.

For associations, Alchian argues that three key managerial opportunities and constraints have to be overcome: first, for retaining commitment and loyalty of members in the face of incentives to exit; second, to get what may be path-dependent structures to adapt; and third, to respond to demands from the regulatory environment and role of the state. ‘Period effects’ occur when all or most organisations experience similar impacts at the same time, but may result in a variety of responses as each adapts goals, boundaries and activities (Aldrich and Staber, 1988). For the analysis of long- and short-term evolution of chambers this suggests a prime focus on points of major change in external environments, e.g. from economic pressures and crises, or changes in political and state activity. Within change periods, there are likely to be age and cohort effects. Age effects mean that organisations of different ages will adapt in different ways, perhaps the oldest being slowest to adapt. Cohort effects mean that, as well as age, other differences between organisations may emerge. For chambers these are likely to derive from their size and management structure. The most important differentiation expected in Irish chambers is between the larger ones managed by full-time staff, smaller chambers with few staff requiring substantial interactions with elected members on chamber management councils, and chambers entirely managed by elected volunteer members. The theory of organisational evolution advanced by Alchian is useful in emphasising long-term incentives and periods of transformation, which can be applied to examining both long-term and short-term transition process for chambers in Ireland.

The perspective of organisational evolution is also useful in emphasising how the external state regulatory environment influences adaptations. The Irish chambers are voluntary, private law bodies that receive no direct state support; if something goes wrong, they suffer losses and risk insolvency. This is a strong contrast to public law chamber systems such as those in France and Germany which, although legally obliged to balance budgets, are underpinned by the state and effectively pass risk to the tax payer. This difference will be particularly significant in a crisis.

Comparisons of private and public law systems of trade associations (van Waarden, 1991) and chambers (Bennett, et al., 1993) have shown that private systems are generally much smaller in membership, resources and geographical area. This makes them more vulnerable to ‘period effects’ and external financial crises. However, private law systems can vary considerably depending on the degree to which they receive other forms of state support. For example, Perry (2012) shows how different institutional forms of support influence capacity of sector associations in Ireland and New Zealand. For chambers, the UK case exhibits how resources from contracts and partnering with government agencies can provide chambers with significant resources, averaging £2–4 million in the 2000s (Bennett, 2011: 593). Evaluation of chambers must, therefore, be sensitive to the roles of state support in the Irish case.

Traditionally, there has been little attempt by the state to partner Irish chambers. Before independence, the Irish chambers disseminated consular information from the UK government’s Board of Trade about foreign trade opportunities, made inputs to negotiations with foreign governments (e.g. over tariffs), and led the first foreign trade missions (Bennett, 2011: 609-616), chiefly through the Dublin chamber. However, after independence, there was no attempt by the Irish government to work with chambers to facilitate economic development. Generally a state-led approach sought to entrench independence and self-sufficiency from the UK through industry grants, tariff protection and restrictions on foreign ownership of firms.

Although recognised as a factor impeding the economic growth as early as in the Whitaker Report (1958), state policies did not change fundamentally until Ireland joined the EU on 1 January 1973. For most of the period after 1973, the whole of Ireland was classified as Objective 1 within EU Structural Funds, making it eligible for maximum support from the major spending programmes of ERDF, Social Fund and agricultural subsidies. For many EU schemes local partners were essential and the government was forced to draw on chambers and other bodies. This brought some chambers and the national association of chambers (CI) into important partnerships. However, the EU initiatives mainly sought partners from state agencies. Assessments in 1982 (NESC, 1982) criticised government policies for remoteness from private sector organisations. The Culliton Report (1992) recommended reorganisation of most state policies for taxation, infrastructure, education, training and technology, and reduced reliance on industrial grants. Culliton also recommended developing local clusters to support SMEs through a decentralised network of partner agencies. There was some reorganisation (Henry et al., 2003) but the main response in 1992 was to establish County Enterprise Boards (CEBs) with a standardised state-led administrative structure (four staff: a CEO, two assistants, and one administrator) and the same budget in each location. Some CEBs used city governments or other partners, but generally chambers and associations had minor roles. An important study by Goodbody (1996) recommended changes to government policy to encourage wider partnerships, but although chambers began to adapt, there was no change in state support. Rather than drawing on associations such as chambers, or SMEs themselves, CEBs tended to compete. Similarly, Industrial Development Association Ireland, the national inward investment body, and Enterprise Ireland, the export promotion body, acted under government departments, with relatively little involvement from chambers or other associations.

The problems recognised by Whitaker, NESC and Culliton were reiterated by the O’Driscoll Report (2004). A network of 62 state-supported business incubation centres, which could have used chambers and other partners, was established in 2004. However, there was little systematic attempt to do so and there has been little recent change despite pressure on government budgets. Generally, public economic policy has remained ‘state-led’. As a result, the main influence of state supports on chambers has come from EU support and the few government initiatives that have involved some chambers. Hence, a variety of different local experiences is to be expected.

Financial evolution of the 14 chambers is presented in Table 2 for total resources, which are available sufficiently and consistently to allow for the comparisons to be made over time and between chambers. Although this single indicator has limitations, it is, nevertheless, a good index of the total service levels. The whole chamber system showed rapid growth over 2001–2008, increasing by up to 500% over the seven years (i.e. from 100 to 517, as an index of total resources in Table 2, for the case of Dublin, and for Arklow to 533). However, only three managed to maintain an almost uninterrupted growth after 2008: Cork, Arklow and Limerick at a more modest level. Table 2 shows that for the rest of the chambers total resources have, at best, run level and, for most, have declined since 2008–09. Nine of the 14 chambers experienced significant real value declines between 2008–09, and a further three declined by 2010. The declines were most severe in Galway, Dun Laoghaire, Clondalkin and Loughrea, which all finished 2012 at below 2001 levels. Resources in Waterford and Wexford declined to a lesser extent.

A recent improvement of fortunes occurred for some chambers. By 2011, seven chambers had increased income compared to 2010, with Arklow exceptional in its level of increase. However, some suffered smaller contractions between 2011–12, as the Euro crisis continued. Continued uncertainties in the Eurozone caused further changes that are not yet recognised in these figures, although the beginnings of a turnaround in the economy during 2012 began to offer relief. The general picture across the chamber system is of a very unstable change period with severe challenges.

The changes for chambers are compared with the Irish economy as a whole, as shown at the bottom of Table 2: for total Irish GNP and total government expenditure. These comparators indicate, that all chamber groups grew faster than the economy as a whole, and most as fast as, or faster than, government expenditure in the upturn. After 2008, chambers declined more slowly, except for group 2, which fell almost as fast as Irish GNP. In comparison with Irish government expenditure, the largest chambers (group 1) expanded faster and retained more of their growth, but the medium and small chambers (groups 2 and 3) declined much more quickly. The contrasts between the different chamber groups are, thus, significant. However, there is no evidence that the oldest chambers are the slowest to adapt, as deemed likely for incumbent organisations by Aldrich. Instead, three of the oldest chambers generally grew fastest in the upswing and retained most in the downswing. The exception to this trend was Limerick, the third oldest chamber, which remained remarkably stable through the whole period, responding to growth opportunities only from 2009. It is perhaps the leading example of a slow-responding incumbent. However, from 2009, it began to take strategic action. It feared the effects of the economic stresses on its members. It expanded services to raise user fees (mainly from certificates) and keep subscriptions down. It also reduced its costs by 2–4% per year after 2009 as a prudential strategy to build up reserves against any future difficulties (interview comments from chief executive and annual accounts).

The chambers in group 1, as well as being the oldest, are also the largest incumbents, with the strongest existing resources, personnel and service bundles. On average, their resources grew by a factor of 3.3 over only seven to eight years. This is an astonishing record of expansion, most of which has been maintained after 2008, despite the economic contraction. This experience suggests that it was generally size that allowed chambers to expand services more easily in the post-Euro entry boom years. However, within group 1 there was considerable variation, with Galway having a severe decline between 2008–11. It was forced to sell its airport share, which was purchased by the city in 2011. This was completed in 2013 for a sum of €1.1 million, which matched deposits that the Bank of Ireland was holding back to cover outstanding debts. The airport’s crisis was precipitated by the decline in the economy, causing airlines to withdraw all flights, financial pressures on the government, which cancelled its annual subsidy of €1.8 million at the end of 2011, and the failure of a planned park-and-ride scheme (interview comments from local officials; reports in Connacht Tribune, 10 November 2011, 1 February 2012, 8 January and 20 August 2013).

The general experiences of the chambers in groups 2 and 3 are remarkably similar to each other, despite the contrasts in staff resources: almost a two-fold growth in resources over the seven years between 2001–2008 (excluding Arklow). However, there are considerable internal contrasts, and there is the exceptional pattern for Arklow, which has the highest growth rate of all 14 chambers in the sample. This distorts the more general development of group 3 chambers so that, to aid comparisons, the average for this group is shown both inclusive and exclusive of Arklow. Over these groups, Arklow, Drogheda, Sligo and Loughrea show aggressive efforts to expand resources, achieving a rate of growth similar to that for chambers in group 1. After 2008, there were severe contractions, far greater than in the Irish economy as a whole. However, compared to the earlier growth, only Wexford and Clondalkin experienced a decline by 2011 relative to 2001, followed by Dun Laoghaire in 2012. Clearly the chambers were taking different views of their resource options and had different opportunities in both the expansion and contraction phases. Moreover, differences were as great within the two groups as between them. Having a small staff to help manage the chamber does not seem to have produced a different resource profile for group 2 chambers compared to the purely voluntary group 3 chambers. It is clear, therefore, that volunteers can often achieve as much as employed staff if they choose to do so, have sufficient effective volunteers, and act with sufficient entrepreneurship.

The Arklow case is an important exception. It is essentially a voluntary chamber that booked no employee remuneration over most of the period. However, its location within the Arklow Business Enterprise Centre allowed it to take advantage of partnerships with others. Interview comments from its chairwoman state that most important was the participation in the Foras Áiseanna Saothair (FÁS) Community Employment Scheme providing work experience for unemployed adults as part of the government’s efforts at economic support. The chamber provided work placements through its members, managed by two part-time staff at about 19.5 hours each employed by the Centre, with the chamber receiving a management fee.2

The chamber incurred small staff salaries over 2007–09 when the scheme was initiated, before they were taken on by the Business Enterprise Centre: interview comments from chamber chairwoman.

The comparison of the chamber groups shows that in a private law chamber system there will be great variation between individual chambers, which make quite different responses to the opportunities on offer, in line with their local economic circumstances, management capacity and member priorities. Whilst there is some evidence of the systematic effects of age and rank-size down the urban hierarchy, any influence from age and the urban pattern is limited compared to the major influence of differences in government and EU support, with the most extreme exception being Arklow, a relatively small centre with the highest growth over the period. Hence, the experiences of these chambers suggest that opportunities can be gained when state supports are available.

The second aspect of analysis compares website information on service offers collected in 2005–2006 and 2010– 2012. These are only snapshots but there are, however, some clear findings. First, there was a sharpening of chamber focus on services and marketing. There was major expansion of service offers for almost all of the chambers, especially those from group 1 and 2. This expansion came chiefly from an increased use of discounted market services, from new programmes launched in relation to the EU and other initiatives through the national association CI and, in some cases, from the involvement in government schemes (chiefly FÁS Community Employment Schemes). Discounted services were provided to members at a reduction to market rates from outside providers, thus expanding service offers at low cost and low risk (since no new staff had to be employed for the new services offered) - taking advantage of transaction cost and bundling opportunities from service interconnectedness. The rapid growth of the Irish economy over 2001–2008 provided many opportunities for chambers to act as marketing points for other business service providers. This was also reflected in some growth of membership, with greater membership from professional service firms and consultants, as well as expansion of retail, health and leisure industries (membership data in Bennett, 2011: 702, and comparison of member web lists).

Expansion based on EU and government supports (including those through CI and FÁS) fell into two subcategories. First, mainstream corporate supports, especially for corporate social responsibility activities and human resource (HR) programmes for SME training and advice (to help compliance with employment regulations etc.). Second, programmes with social objectives derived from EU initiatives: training schemes for entry to employment, school and college links, etc. With the financial collapse of 2008 and the economic contraction that followed, these schemes and initiatives held up remarkably well. However, volumes suffered. Thus, whilst there is little evidence of trimming the range of services, there have been pressures on resources and, hence, on personnel to do more for less (interview comment from CI). This is indicated by the small changes in staff levels, as shown in Figure 1, with most reductions in Waterford. Similarly, the chambers in group 2 that employed only small staff anyway have not seen staff numbers change significantly.

Expansion based on EU and government supports (including those through CI and FÁS) fell into two subcategories. First, mainstream corporate supports, especially for corporate social responsibility activities and human resource (HR) programmes for SME training and advice (to help compliance with employment regulations etc.). Second, programmes with social objectives derived from EU initiatives: training schemes for entry to employment, school and college links, etc. With the financial collapse of 2008 and the economic contraction that followed, these schemes and initiatives held up remarkably well. However, volumes suffered. Thus, whilst there is little evidence of trimming the range of services, there have been pressures on resources and, hence, on personnel to do more for less (interview comment from CI). This is indicated by the small changes in staff levels, as shown in Figure 1, with most reductions in Waterford. Similarly, the chambers in group 2 that employed only small staff anyway have not seen staff numbers change significantly.

The severity of the economic crisis has, however, made adjustments necessary. On the one hand, a greater business-led approach sought to address the needs for specialist expertise in rapidly changing conditions. On the other hand, the extensive need for leadership by the state after the economic crisis, especially through state ownership/guarantees of banks and the convoluted negotiations over Eurozone and IMF supports for sovereign and banking debts, led to the Irish economy still having strong state-led characteristics that have restricted business leadership. However, an important contributor to the relative stability of the chambers was EU programmes, which were not subject to cuts at the rate of Irish government programmes.

A third aspect of short-term adaptation has been government partnering with chambers (mainly through EU programmes), already implicated in the discussion above. Partnering is part of a general trend in the EU (Greenwood, 2002). Given their scale of membership and range of services, chambers offer considerable advantages to governments and the EU as partners. Policy calls by the European Commission’s Green Paper on Entrepreneurship (EC, 2003) and Action Plan (EC, 2012) have sought to use associations to enhance SME services. Chambers are ‘natural’ partners with government for this (Bennett, 2011: 590). First, they provide a network of connections to businesses that may be most committed to local collective efforts. Second, they can be contracted for provision, offering brand recognition, trust and marketing benefits to government programmes to increase their potential. Third, business involvement often improves programme design and implementation.

The first significant EU initiative was the Irish EU Euro-Info Centres set up in 1989–90 becoming parts of the European Enterprise Network (currently based at the chambers in Dublin, Cork, Galway, Sligo and Waterford). Other EU and government initiatives have used chambers to deliver small business training, help to the unemployed and local economic development programmes. For example, Galway chamber received an average of 24% of income from EU grants and contracts over 1994–2005 (Galway Chamber, Annual Accounts, 1995, 2005). Limerick chamber received EU and government supports for 15% of income in 1999, rising to 25% in 2000 and 37% in 2006.

As well as the activities of individual chambers, the national association of chambers (CI) also became an active EU service provider: both directly to firms, and through the member chambers. Typically, a programme would be negotiated at national level, with CI acting as manager, but with delivery through the individual chambers. By 1974, CI was receiving grants to contribute to the Irish Business Bureau in Brussels (IR£4,000 in 1974). However, EU programmes grew significantly in the early 1990s, with CI’s ‘regional development activities’ increasing from IR£8820 in 1991, to reach IR£179,828 by 1999, mainly for LEADER and INTERREG. EU funding then grew even more rapidly, reaching a peak in 2007 of about €3.9 million, mainly for the Diversity At Work Network (DAWN), which was a collaboration with local chambers to engage with SMEs (all figures form published accounts). These schemes were administered by Enterprise Ireland and contracted to CI. However, following various tensions and reforms, CI withdrew from all EU programmes in 2008 (Bennett, 2011: 528-9). Hence, all EU partnering is now channelled solely through local chambers and this has led to a reduction of EU supports throughout the system.

The limited involvement of the government with Irish chambers contrasts strongly with many EU countries, including the UK. A discussion about restructuring the Irish government’s approach to business associations following Culliton (1992) recognised that Ireland had a poor record of stimulating SMEs. The chambers were suggested as providing significant potential for cluster policies in local areas. Given the geography of the Irish economy, with most of the main population and business centres dispersed around the seaboard, with considerable distances between them, localisation of SME support offered significant efficiencies. An important study by Goodbody (1996: 55-56) recommended:

Building associations more effectively into the government’s business support policies;

Culliton stimulated a change in the chamber system that allowed the national association to exert greater control. This was also influenced by the UK chamber’s Development Strategy (ABCC, 1991; Bennett, 2011: 351) that emphasised a process of national accreditation and inspection, which was adopted in Ireland by CI. A Best Practice Manual for chambers was launched at the CI conference in May 1993. The structure of the 1980s, with 59 local, 30 county/city and eight regional chambers was replaced by a more integrated structure, launched in 2005, which remains the essential aspiration today (CI, 2004: 17). It is based on defining four service levels within four types of chamber: (i) city chambers, (ii) county chambers, (iii) local or district chambers, and (iv) associate chambers (CI, Best Practice Manual, 2005).

The chamber system in Ireland has, thus, experienced changes from the 1990s, in line with most of the recommendations of Culliton and Goodbody. However, the government did little. Instead, decentralisation occurred within the state-led CEBs and almost all the potential for development was swamped by the economic boom following entry into the Euro, leaving fundamental economic and political reforms un-addressed. Indeed, it has been claimed that this boom reinforced a political-economic system that was heavily based on a system of political patronage inherited from Britain that was very unlikely to divest its powers and controls. The boom years after 1999 suggested that reforms could be ignored, whilst the economic largesse that became available reinforced the stateled approach and the boom in the private sector suggested that no supports from associations were needed (Cullen, 2002; O’Toole, 2009; Byrne, 2012). This was the time when Ireland was referred to as a ‘Celtic tiger’ economy

Some possibility of stronger involvement of chambers in partnerships was raised in 2012, connected with the reform of the CEBs. The reform had the aim of devolving more power locally and overcoming ‘overlaps and duplication in the provision of various services and supports by the CEBs and Local Authorities leading to confusion and inefficiencies on the ground’ (DJEI, 2012: 6). However, actual reforms have focused on drawing local authorities more closely into partnerships and have largely bypassed chambers and other SME organisations. The new structure replaced CEBs with local enterprise offices (LEOs) from July 2013, based on service level agreements between county councils and government, financed through Enterprise Ireland. Although proposals originally suggested that they would ‘work closely with local Chambers of Commerce and other Business Associations’ (DJEI, 2012: 15), the consultations ignored non-state partners (CI, 2013) who were not even listed as consultees by DJEI (2012: 18–19) and there were no performance criterion for networking or local engagement. CI was concerned ‘that the structure … established to support business start-ups and enterprise [should] include representation from the local business community’ and that the functions of LEOs should limit ‘mission creep’ into the private sector (CI, 2013). Limerick called for LEOs to ‘engage stakeholders from the business community’ (Limerick Chamber, 2013). Hence, with no systematic involvement of LEOs with chambers, business associations or SMEs, it seems clear that the financial crisis has not been used as an opportunity to improve public sector partnering.