Seminar: From state building to international challenges


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National and international influences affecting Iceland's development in official statistics.

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Seminar: From state building to international challenges

  1. 1. 20.8.2013 M.S.M. Tema: Statistikkens rolle i styrningen av samfunnsutviklingen – et historiskt tilbakeblikk Seminar i Bergen,14. august 2013
  2. 2. Magnús S. Magnússon Director of social statistics, Statistics Iceland From state building to international challenges – National and international influences affecting Iceland's development in official statistics. 20.8.2013 M.S.M.
  3. 3. Subject matter of this presentation • First of all I will draw a brief account of the historical development of Iceland with regard to the national status of Iceland. • Secondly, I will speak about the important Danish influences affecting the first decades of Icelandic official statistics as they continued on a permanent basis. • Thirdly, I will deal with aspects of the centralisation vs. decentralisation tendencies influencing official statistics in Iceland. • Fourthly, I will consider the effects of „globalisation“ aspects on official statistics in Iceland, and also the most recent tendencies are outlined and addressed with the the question: Where are we going to? 20.8.2013 M.S.M.
  4. 4. Section I. National status of Iceland in history, or how Iceland came under Danish control? 874: Official date of permanent settlement in Iceland. 7th century is closer to the truth. 930: Althingi (Parliament) established. Commonwealth period begins 1262: Collapse of the Commonwealth. Icelanders sign agreement with the Norwegian crown. 1383: Political control over Iceland transferred from Norway to Denmark. Danish monarchy ruled in Iceland until 1944. 1918: Iceland became independent. Danish-Icelandic Act of Union passed by the Parliaments of both countries. 1944: Althingi elected a president when the Icelandic republic is established on 17 June. 20.8.2013 M.S.M.
  5. 5. Section I. Status of Althingi in different periods 1262–1944 1262–1662: Althingi was a legislative body in cooperation with the Norwegian and later the Danish crown. 1662–1800: Althingi serves as a court under Danish absolutism. 1800–1845: Althingi not operating. 1845–1874: Althingi re-established as an advisory body (with no independent financial powers). 1874–1904: Constitutional monarchy. Althingi with legislative rights in domestic matters, with rights to issue a finance bill. 1904–1918: Home Rule period with representative government (parliamentary rule). Icelandic minister located in Reykjavík. 1918–1944: Iceland is practically an independent state. 1944– : Iceland is a republic. 20.8.2013 M.S.M.
  6. 6. Section II. Danish influences in Iceland - Modernisation and social change since the late 19th century • Several key events in Danish history occurred during the 19th century which promoted modernisation of political and economic institutions in the Danish monarchy, including Iceland. • Many leaders who struggled for Icelandic independence were educated in Copenhagen, lived there, and used Icelandic history, law and statistics as political arguments. The liberal national hero of the Icelanders, Jón Sigurðsson (1811–1879), had all these elements in common. 20.8.2013 M.S.M.
  7. 7. Section II. Danish-Icelandic relations 1848-1913 • 1848/1849: End of absolutist rule in Denmark. The Danish king declared himself a constitutional monarch. The Danish king grants Icelandic National Assembly permission to convene in Reykjavík., but postponed until 1851. • 1851: National Assembly held in Reykjavík but dissolved by a royal representative and Governor. End of revolutionary tide. • 1858-1875: Danish government supports financially annual publication of Icelandic statistics collected into 5 volumes (Skýrslur um landshagi á Íslandi). Marks the beginning of continuous publications of Icelandic statistics. Main activities took place in Copenhagen, Denmark. 20.8.2013 M.S.M.
  8. 8. Section II. Danish-Icelandic relations 1848-1913 (cont.) • 1873-1904: Administration strengthened in Reykjavík by appointing an Icelandic governor (landshöfðingi) as the highest representative of the Danish crown in Iceland with a Danish minister in Copenhagen. The governor served as royal representative in the Icelandic Parliament. Icelandic statistics were produced on a permanent basis although no statistical agency had been established. • During the 19th century all population censuses of Iceland were produced and published by Danish statistical authorities, • The population census in 1901 became a source of friction between Danish and Icelandic officials of the Crown. • In the period of Home Rule some nationalist sentiments led to a decision by Althingi in 1909 to undertake the census of 1910 without Danish participation. 20.8.2013 M.S.M.
  9. 9. Section II. Danish influences contributing to Iceland’s modernisation • Democracy and liberal rights in Denmark in the 19th century • Removal of institutional „constraints“ in the economy. Modern institutional setup as incentives to economic growth. • Semi-autonomy of Iceland. Iceland was often referred to in Danish as a biland, a dependency (not a colony), of Denmark. • Iceland entered a free-trade era in 1855. • Human capital is important in explaining rapid modernisation in Iceland. Reading and writing skills were widespread among the general public. University access open to Icelanders in Copenhagen for centuries. • Property rights were well established in Iceland 20.8.2013 M.S.M.
  10. 10. Section III. Centralisation vs. decentralisation in the development of official statistics in Iceland • III a — Centralisation tendencies in the first era of an open market economy • Statistics Iceland, founded (by legal act no. 24/1913) in January 1914. SI in entrusted with manifold duties in accordance with the law. Ambitious statistical program written in the law. • The establishment of Statistics Iceland in 1914 was a clear statement of confidence that Iceland was prepared to build institutions which manifested national independence right before World War I. 20.8.2013 M.S.M.
  11. 11. Section III. a The main original tasks of Statistics Iceland • Statistics Iceland was professional from the start in 1914 and a highly independent institution. • The law expresses great ambitions and many tasks to be dealt with • The main constraints consisted in the limited number of staff persons in the office, or simply in the budget. • Statistics Iceland was entrusted with primary statistical collection • Main statistical domains: vital statistics, external trade, agriculture, fishing, cost-of-living, general elections, population and housing censuses. 20.8.2013 M.S.M.
  12. 12. Section III. a Results 1914–1931 • No serious challenges against the central position of Statistics Iceland in the first two decades from 1914 onwards. • Very few agencies produced statistics outside Hagstofa (example: Postal- and telecommunication authority). • Period of centralisation in statistics. • Free market economy in play until 1931. 20.8.2013 M.S.M.
  13. 13. III b — Decentralisation tendencies in the era of a regulated economy 1931–1990 • General remarks: Sector statistics transferred to „interest“ organisations supported by the government. • 1942: Fisheries statistics transferred to the Fisheries Association of Iceland. • Monetary statistics were transferred to the National Bank of Iceland in the 1950s which handed them over in 1961 to the newly established Central Bank of Iceland. • Agricultural statistics: SI discontinued in 1967. Farmer’s organisations partly in charge of agricultural statistics, also the National Economic Institute (1974–2002). • 1934–36: Commission for Economic Planning (Skipulagsnefnd atvinnumála). Erik Lundberg advisor of the Commission. Range of important statistics, including a number of main aggregates of the economy. Although this work was discontinued. • Statistics Iceland did compile records of net income and property assets, based on tax returns of individuals and companies, reaching back to 1922. 20.8.2013 M.S.M.
  14. 14. III b — Economic imbalances 1940–45 • British-American occupation of Iceland. Dramatic changes in demand for Icelandic goods and services. • Economic prosperity. Accumulation of foreign reserves. • Sudden change from long-term unemployment to full employment. Growing strength of organisations of labour • Inflation becomes a problem • Icelandic currency (króna) constantly overvalued • Spiral of raising wages and prices. Problems of wage- indexation. • Rising demands for new types of statistics • SI faces rising challenges by interest organisations 20.8.2013 M.S.M.
  15. 15. III b — Economic imbalances after WWII • Positive credit balance led to investment which quickly emptied the Icelandic foreign reserves. • Temporary abandonment of foreign troops from Iceland led to a rapid fall in demand • Icelandic króna heavily overvalued leading quickly to shortage of foreign currencies. • Rationing of imported goods became a custom in the period 1947 to 1959. • Political leaders stuck between interest factions of a regulated economy • Most economists occupied in solving technicalities, not the real problems • Only a handful of economists did challenge the ideological foundations of the regulated economy • Marshall Plan. Iceland secured a high share (per capita) of the aid 20.8.2013 M.S.M.
  16. 16. III b — Economic imbalances after WWII (cont.) • High degree of political control over investment for most of the post- war period and across most sectors of the economy. • The Development Bank of Iceland founded in 1953 to monitor foreign aid and investment in the country. • Up to the mid-1950s: Lack of macroeconomic statistics to monitor imbalances in the economy • Production of national accounts established in the Development Bank of Iceland in 1953 • Statistics Iceland established the National Register of Persons (administrative register). • Statistics Iceland established the Register of Enterprises in 1969 (administrative register). • National Economic Institute 1974–2002 (national accounts) 20.8.2013 M.S.M.
  17. 17. III b — A few conclusions about the period 1945-1990 • The statistical production in Iceland became more diffused in this period than ever before or after. These “decentralisation tendencies” occurred on a broad scale • Economic sectors and interest organisations were involved in the outcome. • The political system was closely connected to investment policies, promoting „industrial policies“ as a compromise between the need to liberalize foreign economic relations and the demand for domestic protection against excessive external competition. 20.8.2013 M.S.M.
  18. 18. III c — Centralisation tendencies in the era of economic liberalism 1990–2008 • The 1990s: enters the EEA-agreement – Increasing centralisation tendencies • Late 1980s: Iceland (EFTA-member) partner in negotiations preparing the European Economic Area (EEA) • European statistics early on the agenda • Labour Market Survey in April 1991 for the first time in Iceland by SI • 1994: Iceland member of the EEA-agreement. About 30 legal acts in original list of EU statistical regulations • 1998–2010: Rapid increase of EU-legislation in statistics • The EEA-agreement was a turning point in Icelandic statistics • Act on Statistics Iceland and official statistics, No. 163/2007 underlines the coordination role of SI within the Icelandic Statistical System. 20.8.2013 M.S.M.
  19. 19. Section IV. Consequences of joining EEA – the globalisation process • National peculiarities and deviations no longer acceptable in statistics • Comparability in statistics as a challenge for all statistical agencies • Need for improved allocation of resources challenged irresponsible or outdated institutional setup in statistics • Decentralisation tendencies were reversed by transferring statistical tasks to SI • Demand for improved timeliness in statistics led to more frequent publications. • Statistical release calendar of SI put pressure on other agencies with statistical obligations to follow suit. • Increased organisational management needed to improve the infrastructure of statistical agencies (quality aspects, writing of standardised reports, management of contracts and grants, preparations of international meetings, staff management; continuing vocational training of staff members, etc.) 20.8.2013 M.S.M.
  20. 20. Some preliminary conclusions from Icelandic history • There appears to exist correspondence between the workings of a fairly well functioning market economy and tendencies towards centralisation in official statistics. • There appears also to exist correspondence between economic state interventions and tendencies towards decentralisation in official statistics. • If this holds true it is tempting to conclude that in the Icelandic case one of the major potential threats against impartiality and objectivity in official statistics come from interest groups, rent-seekers, pressure groups and others which rely on state interventions more or less for their own benefits. • In countries with institutional culture based on careful application of decentralised statistical agencies there is no reason to worry, if they are supplied with necessary „resources“ to meet the challenges of modern official statistics. 20.8.2013 M.S.M.
  21. 21. Thank you MSM 20.8.2013 M.S.M.