Kennedy, Kieran (1935–2013), economist, was born on 14 July 1935 in Newbridge, Co. Kildare, the fourth of five sons of Patrick Kennedy, a garda, and his wife Margaret (née Callahan). As his father was transferred frequently, Kieran spent much of his early life alone with his grandmother on a farm in east Galway; this possibly contributed to his aloofness in adulthood. He re-joined his nuclear family in Limerick where he was well educated by the Christian Brothers at Sexton Street and acquired his lifelong Munster accent. In 1953 he won both a state scholarship and a corporation scholarship for university, but was unable to avail of either due to muddled regulations. He joined the civil service in 1954 as an executive officer in the Office of the Comptroller and Auditor General before switching the next year to the Department of Industry and Commerce. He took night classes in UCD, graduating with a diploma in public administration (1956) and a first-class honours B.Comm. (1958). During this period he joined the Legion of Mary, an association of lay catholics dedicated to Marian devotions and helping the needy. He grew close to the Legion’s founder Frank Duff (qv) and like him was involved in various ecumenical groups.
In 1958 Kennedy won a competition to join the elite administrative corps of the Department of Finance. Although he was then stricken by tuberculosis, the eighteen-month recuperation period off work afforded time to study for a masters degree in economic science at UCD. He graduated with first-class honours in 1960, also winning a travelling scholarship for his dissertation. The secretary of the Department of Finance, Ken Whitaker (1916–2017), arranged his leave of absence to study in Nuffield College, Oxford, for a degree in economics, awarded in 1963. He then went to Harvard on a teaching fellowship where, under the supervision of future Nobel prize-winning economist Simon Kuznets, he undertook a doctoral thesis on Irish industrial growth since independence, receiving a Ph.D. in economics in 1968. This thesis was expanded into his first book, Productivity and industrial growth: the Irish experience (1971), which was praised for being among the first academic treatments of Ireland’s twentieth-century economy.
Returning to Ireland in 1965, he finished his Harvard thesis while working as an assistant principal officer in the economic policy section of the Department of Finance and lecturing part-time in economics in UCD. In June 1966 he married Finola Flanagan, who was also a UCD economics lecturer and a member of the Legion of Mary. Duff had introduced them. They settled in Sydney Parade Avenue in Sandymount, Dublin, and had three sons and three daughters. Finola published on public spending and the links between economic change and family change and strongly influenced her husband, most notably when he later opposed the universal provision of free public services, arguing instead for spending to be targeted at those most in need.
In 1968 the department seconded him as a senior research officer to the Economic and Social Research Institute (ESRI), which had his mentor Whitaker as its president. (Despite their occasional disagreements, he and Whitaker maintained good personal and professional relations.) Upon joining the ESRI permanently two years later, he was loaned to the Central Bank as an economic consultant before returning in 1971 to become director of the ESRI. The institute was most known for making short-term forecasts in its quarterly economic commentary, but it also published on assorted economic and social issues. From 1986 he oversaw the supplementing of the ESRI’s short-term forecasts with a five-year forecast, published annually.
Stern and exacting behind outward diffidence, he ensured that the state-funded ESRI maintained its reputation for independent, well-researched analysis. He also coped with high staff turnover, as researchers moved into academia, the civil service or business. Pitching the ESRI somewhere between pure research and specific problem-solving, he sought findings that would prove useful for policymakers within the next five to ten years. Many outsiders were sceptical with one terming the ESRI an ‘intellectual monastery with Dr Kennedy as its abbot’ (Sunday Independent, 8 Sept. 1974, 17). In 1987 he confirmed this impression by admitting to never owning a television. A teetotaller, he unwound by walking, fishing and pipe-smoking.
Initially hindered by the paucity of official statistics, during the 1970s the ESRI developed a sophisticated survey unit capable of generating reliable data. In 1979 a published ESRI survey concerning the attitudes held in the Irish Republic towards the conflict in Northern Ireland drew furious denials from across the political spectrum for results showing twenty-one per cent of the public supporting the IRA’s aims to some degree. The survey was also questioned by other ESRI researchers and by the civil servants, academics and businessmen comprising the members’ council. Kennedy defended the report’s methodology, which was praised by international experts, and arranged in 1980 for the ESRI to publish further studies, one criticising the original survey, the other upholding it.
As well as pieces in religious journals of a non-economic nature, he produced over seventy academic papers, generally in collaboration with one of his researchers, and wrote, co-wrote or edited fourteen books with a focus on unemployment, small-scale manufacturing and Ireland’s past and present industrial development. His publications and talks on Ireland’s twentieth-century economic development outlined a history of mediocre growth, persisting into the 1990s, which he blamed on a failure to grasp the implications of being a small economy, myopic policymaking and the neglect of training and education. Latterly he continued his engagement with economic history by being the main mover behind the early work of the Historical National Accounts Group for Ireland, founded in 1994 to collect statistics on the Irish economy between the Great Famine and 1914.
A proponent of state intervention, often decried for his increasingly unfashionable neo-Keynesianism, he admitted that progressive taxes reduced economic growth, but held that the social problems arising from inequality cost more. His interventionism was fairly modest, as he was conscious of the constraints associated with being a small, open economy and of the vested interests nourished by a proliferating public sector. He took a soft line on inflation and the budget deficit because he prioritised reducing Ireland’s stubbornly high rates of unemployment, the corrosive effect of which was brought home to him by his work ministering to the poor with the Legion of Mary. He observed that politicians focused on improving the living standards of those already with jobs while relying on emigration to shorten the dole queues.
From the mid-1970s he maintained that the strategy of attracting capital intensive industries from abroad was incapable of providing enough work for a young population that was less likely to emigrate than before. This led to sharp public exchanges with the Industrial Development Authority, which he accused of embellishing its job creation figures. His analysis was largely vindicated by an ensuing generation of slow growth and high unemployment, belatedly alleviated by mass emigration. Contending that the post-1950s turn towards foreign investment had perpetuated the lack of a self-sustaining industrial base, leaving Ireland reliant on a multinational sector that contributed relatively little to employment, he suggested subsiding jobs while focusing on developing industries based on home-produced raw materials.
In condemning various governments for wastefully accumulating foreign debt during the 1970s, he warned that as national bankruptcy was a slow process, other commentators’ repeated mistaken predictions of imminent disaster encouraged complacency. He variously proposed cutting the national deficit through means-testing public services, public sector pay restraint, community service for the unemployed, boosting the Department of Finance’s authority, a constitutional amendment requiring a balanced current budget and taxes on farmers, wealth, residential properties and foreign holidays. His prescriptions reflected an ethos of self-denial that found little purchase in an emerging consumer society. Similarly, he supported the economic pain required by Ireland’s hard currency policy from 1979.
He was a member of the small steering committee formed in 1982 to help the government prepare an economic plan for eliminating Ireland’s budget deficit. The way forward plan was published in October 1982, marking an overdue move towards fiscal restraint, but the projections were criticised as unrealistically optimistic. Kennedy enjoyed working on the plan with Taoiseach Charles Haughey (qv), who he lauded for possessing the most incisive intellect he ever encountered. (He thought rather less of Haughey’s rival, the Fine Gael leader Garret FitzGerald (qv) who was taoiseach (1981–2; 1982–7).) The government’s immediate fall rendered The way forward redundant, though its medium-term perspective informed Haughey’s successful budgetary policies when he returned to power in 1987.
The resulting cutbacks bore heavily on the ESRI, which was mostly funded by a state grant. Having long protested that relying on commissioned research would compromise the ESRI’s independence, he began seeking five-year funding commitments for sponsored research programmes. By 1995 the ESRI was generating most of its revenue through commissioned or sponsored research, mainly on behalf of state or European Union bodies, and employed forty full-time researchers, up from twenty-five in 1987. The ESRI’s continued reliance on the state meant doubts remained about its independence, regardless of Kennedy’s readiness to criticise government policy and the regularity with which opposition parties cited ESRI publications.
His arguments for state support of selected small indigenous businesses influenced policy modifications introduced during the 1980s and the conclusions reached by the Industrial Policy Review Group in its 1992 report. Appointed to the government task force charged with implementing this report, he was outnumbered there by civil servants who watered down or thwarted the proposed reforms. Moreover, from 1993 a spectacular, foreign investment-driven surge in employment discredited his critiques of Ireland’s industrial development strategy within political and media circles. He also chaired the government working group responsible for examining the causes of the forced devaluation of the punt in 1993.
After retiring as director in October 1996, he continued with the ESRI for several years as a part-time researcher. He was made an MRIA in 1973 and received an honorary degree from TCD in 1993. In early retirement he served as ombudsman for FÁS trainees. Subsequently he devoted himself to painting, which fulfilled his need to be wholly absorbed in the task at hand. He also promoted the case for Frank Duff’s canonisation, helped research his wife’s biography of Duff and spent one week a year evangelising lapsed catholics within the Irish community in England. Following a long illness, he died on 6 February 2013 in Clonskeagh Hospital, Dublin, and was buried in Shanganagh cemetery, Co. Dublin.