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The effect of 1987 Ireland’s Programme for National Recovery on sustainable economic growth: A synthetic control approach

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Listed:
  • de Abreu Pereira Uhr, Daniel
  • de Oliveira Pinheiro, Magnus Kelly
  • Francisco, Domingos Joaquim
  • de Oliveira, Mauricio Felipe Bemfica
  • Uhr, Júlia Gallego Ziero

Abstract

We examine the effect of the 1987 Programme for National Recovery, (PNR) on Ireland’s long-run GDP per capita. To our knowledge, we are the first to show the importance of the program for sustainable economic growth. We employ World Bank data from 1970 to 2018 and the synthetic control approach. Results show that the PNR contributed significantly to increasing Irish GDP per capita with an average effect of 17,374.24 US$. These conclusions remain robust to a placebo test and the Synthetic Difference in Difference approach.

Suggested Citation

  • de Abreu Pereira Uhr, Daniel & de Oliveira Pinheiro, Magnus Kelly & Francisco, Domingos Joaquim & de Oliveira, Mauricio Felipe Bemfica & Uhr, Júlia Gallego Ziero, 2023. "The effect of 1987 Ireland’s Programme for National Recovery on sustainable economic growth: A synthetic control approach," Economics Letters, Elsevier, vol. 222(C).
    • Handle: RePEc:eee:ecolet:v:222:y:2023:i:c:s0165176522004037
    DOI: 10.1016/j.econlet.2022.110929
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    References listed on IDEAS

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    1. McAleese, Dermot & McCarthy, F. Desmond, 1989. "Adjustment and external shocks in Ireland," Policy Research Working Paper Series 262, The World Bank.
    2. Dmitry Arkhangelsky & Susan Athey & David A. Hirshberg & Guido W. Imbens & Stefan Wager, 2021. "Synthetic Difference-in-Differences," American Economic Review, American Economic Association, vol. 111(12), pages 4088-4118, December.
    3. Alberto Abadie & Alexis Diamond & Jens Hainmueller, 2015. "Comparative Politics and the Synthetic Control Method," American Journal of Political Science, John Wiley & Sons, vol. 59(2), pages 495-510, February.
    4. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
    5. McCarthy, F. Desmond, 2001. "Social policy and macroeconomics : the Irish experience," Policy Research Working Paper Series 2736, The World Bank.
    6. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
    7. Alberto Abadie & Jérémy L’Hour, 2021. "A Penalized Synthetic Control Estimator for Disaggregated Data," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 116(536), pages 1817-1834, October.
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    More about this item

    Keywords

    GDP per capita; Synthetic control; Ireland; Economic growth;
    All these keywords.

    JEL classification:

    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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