Prof Robert Elgie's Inaugural Lecture

Bringing the People Back In: The European Central Bank and the Democratic Deficit
Professor Robert Elgie

It is a great honour to be delivering my inaugural lecture this evening and for two reasons. Firstly, it is an honour to have been appointed a Professor at Dublin City University (DCU). DCU has always had a reputation for embracing change and for promoting socially relevant teaching and research. During my short time here, I have already learned that this reputation is well deserved. In the future, I hope to be able to contribute as fully as possible to this and other aspects of the University''s mission. Secondly, it is a special honour to have been appointed the Paddy Moriarty Professor of Government and International Studies at DCU. It is a great privilege to hold this title and in my work I hope to be able to do justice to the memory of such a great public servant for Ireland. I am particularly delighted that members of his family could be here tonight. I am also delighted that representatives from the sponsors of the Professorship are also present.

As I have already mentioned and as everyone in this audience is well aware, Paddy Moriarty was a very distinguished public servant. He began his career with the ESB in 1945 as a clerk on a salary of £2 9s and 7d. He went on to become Chief Executive of the ESB from 1981-91 and then Chairman from 1991-96. Amongst other appointments, he was also the Chair of the RTÉ Authority from 1979-81 and Chair of the National College of Industrial Relations from 1991 until his untimely death in 1997. Paddy Moriarty was highly respected for his achievements in these and other organisations throughout his career. In addition, he was also a great personality. Indeed, when I mentioned to one of my wife''s uncles that I had been appointed Paddy Moriarty Professor of Government and International Studies, he immediately embarked very fondly on a series of stories about the man and his work.I regret not having had the opportunity to meet him, but I am delighted to hold a title that remembers the man and his work.

In this lecture, I would like to discuss the introduction of the euro, or at least one aspect of it. This is a topic about which I am sure Paddy Moriarty would have had a great deal to say. After all, Economic and Monetary Union (EMU) constitutes the most important economic and political development in the European Union (EU) in recent times. At the heart of EMU is the European Central Bank (ECB). The ECB has the power to make decisions that directly affect the economies of countries both inside and outside the eurozone. In this way, it also has the power to make decisions that affect the politics of these countries as well and it is this aspect on which I would like to focus. The ECB has already been the subject of considerable political controversy. Members of the Bank claim that it is an accountable institution. Others, though, assert that the ECB suffers from a ''democratic deficit''. They argue that the citizens of euroland have little or no opportunity to shape the decisions that affect them.

The aim of this lecture is to address this debate. In particular, I will apply what is called the principal-agent approach to the politics of the ECB. There are three main parts to the lecture. The first part briefly outlines the basic assumptions of principal-agent theory. The second part applies principal-agent theory to the ECB and highlights the logic behind conflicting positions of both the supporters and the critics of the Bank. The third part suggests the most fruitful ways in which critics of the Bank might suggest that any democratic deficit could be avoided. In the conclusion I will say a few words about politics and the study of politics.

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1. The basic assumptions of principal-agent theory
2. Supporters and critics of the ECB
3. The reform of the ECB
In Conclusion