IDEAS home Printed from
   My bibliography  Save this article

Social Partnership, Competitiveness and Exit from Fiscal Crisis


  • Barry, Frank

    (Trinity College Dublin)


The contribution of social partnership to Ireland’s economic boom remains the subject of controversy. This paper analyses at a theoretical level how a multi-period deal on wages and taxation of the type struck in the late 1980s could enhance competitiveness and facilitate an economy in escaping from fiscal crisis. Such a deal would not be possible in a spot labour market. The high unemployment rates of the late 1980s suggest that the Irish labour market of the time cannot be characterised as a spot labour market, however, and such a deal could be struck under these circumstances. Short-term tax reductions would have worsened the short-term budgetary position and hence would have been politically unacceptable. An agreement entailing a commitment by government to future tax reductions in exchange for current wage moderation on the part of organised labour imparts a supply-side stimulus to the economy and improves the immediate fiscal position. The concluding comments provide a gloomy assessment of whether partnership could play an equivalent role in the current recessionary environment.

Suggested Citation

  • Barry, Frank, 2009. "Social Partnership, Competitiveness and Exit from Fiscal Crisis," The Economic and Social Review, Economic and Social Studies, vol. 40(1), pages 1-14.
  • Handle: RePEc:eso:journl:v:40:y:2009:i:1:p:1-14

    Download full text from publisher

    File URL:
    File Function: First version, 2009
    Download Restriction: no

    References listed on IDEAS

    1. Bertola, Giuseppe & Drazen, Allan, 1993. "Trigger Points and Budget Cuts: Explaining the Effects of Fiscal Austerity," American Economic Review, American Economic Association, vol. 83(1), pages 11-26, March.
    2. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-193.
    3. Brendan M. Walsh, 2004. "The transformation of the Irish labour market : 1980-2003," Working Papers 200412, School of Economics, University College Dublin.
    4. O'Rourke, Kevin, 1995. "Emigration and Living Standards in Ireland since the Famine," Journal of Population Economics, Springer;European Society for Population Economics, vol. 8(4), pages 407-421, November.
    5. Sutherland, Alan, 1997. "Fiscal crises and aggregate demand: can high public debt reverse the effects of fiscal policy?," Journal of Public Economics, Elsevier, vol. 65(2), pages 147-162, August.
    6. Barry, Frank, 2002. "FDI, Infrastructure and the Welfare Effects of Labour Migration," CEPR Discussion Papers 3380, C.E.P.R. Discussion Papers.
    7. Slobodan Djajic & Douglas D. Purvis, 1985. "Intersectoral Adjustment and the Dynamics of Wages and Employment Opportunities," Working Papers 603, Queen's University, Department of Economics.
    8. Blanchard, Olivier J. & Summers, Lawrence H., 1987. "Hysteresis in unemployment," European Economic Review, Elsevier, vol. 31(1-2), pages 288-295.
    9. John FitzGerald, 1998. "Wage Formation and the Labour Market," Papers WP095, Economic and Social Research Institute (ESRI).
    10. Andersson, Fredrik & Forslid, Rikard, 2004. "A fundamental asymmetry of asymmetric shocks," European Economic Review, Elsevier, vol. 48(2), pages 337-351, April.
    11. Faini, Riccardo, 1996. "Increasing returns, migrations and convergence," Journal of Development Economics, Elsevier, vol. 49(1), pages 121-136, April.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Niamh Hardiman & Muiris MacCarthaigh, 2013. "How Governments Retrench In Crisis: The Case of Ireland," Working Papers 201315, Geary Institute, University College Dublin.
    2. Sebastian Dellepiane & Niamh Hardiman, 2012. "Fiscal Politics In Time: Pathways to Fiscal Consolidation, 1980-2012," Working Papers 201228, Geary Institute, University College Dublin.
    3. Eoin O'Malley, 2012. "A Survey of Explanations for the Celtic Tiger Boom," The Institute for International Integration Studies Discussion Paper Series iiisdp417, IIIS.

    More about this item


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eso:journl:v:40:y:2009:i:1:p:1-14. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martina Lawless). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.