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Rebalancing and Regional Economic Performance: Northern Ireland in A Nordic Mirror

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  • Graham Brownlow
  • Esmond Birnie

Abstract

Northern Ireland has been characterised as having an excessively large public sector. This characterisation has led some to explain poor regional economic performance in terms of ‘crowding out’. This diagnosis has been used to justify a policy of ‘rebalancing’ and the region copying its southern neighbour's lower rate of corporation tax. The experience of large public sectors in the Nordic economies seems however to suggest that higher public spending is not necessarily damaging. This argument is examined critically. Rodrik's comparative institutional analysis indicates that in the Nordics a large public sector was the result of building a successful tradable private sector rather than its cause. In terms of the possible ‘economic dividend’ from devolution we suggest that a Hayekian insight is better: no ‘silver bullets’ exist.

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  • Graham Brownlow & Esmond Birnie, 2018. "Rebalancing and Regional Economic Performance: Northern Ireland in A Nordic Mirror," Economic Affairs, Wiley Blackwell, vol. 38(1), pages 58-73, February.
    • Handle: RePEc:bla:ecaffa:v:38:y:2018:i:1:p:58-73
    DOI: 10.1111/ecaf.12267
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    References listed on IDEAS

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    2. John Fitzgerald & Edgar Morgenroth, 2019. "The Northern Ireland Economy: Problems and Prospects," Trinity Economics Papers tep0619, Trinity College Dublin, Department of Economics, revised Aug 2019.

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