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Catching The Celtic Tiger By Its Tail

Listed author(s):
  • Ferreira, Luisa


    (European Investment Bank, Projects Directorate)

  • Vanhoudt, Patrick


    (European Investment Bank, Projects Directorate)

The paper attempts to assess the major sources behind the exceptional Irish growth performance in the 1990s. Contrary to other Tigers, Ireland's growth is due to efficiency gains, rather than capital deepening, but the causes for the swift growth in total factor productivity cannot be pinned down to a single factor. Human capital, foreign direct investment, Social Partnership agreements, sound budget and economic policies since the late 1980s, EU membership, all seemed to have interacted to produce this high-growth economy. This paper focuses on the two mostly quoted catalysts - i.e. FDI and human capital. It provides evidence that - although crucial as enablers for the Irish economic performance - neither the rapid expansion of the compulsory education system in the 1970s and 1980s nor the sheer volume of FDI inflows can by themselves explain why Ireland has grown so much faster than other world economies. Instead, it argues that higher education, especially the vocational/technical slant of educational provision, and the sector composition of FDI in favour of high-tech industries, were self-reinforcing factors and have been decisive for the Republic's extraordinary boom.

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Paper provided by European Investment Bank, Economics Department in its series Economic and Financial Reports with number 2002/1.

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Length: 58 pages
Date of creation: 01 Mar 2002
Handle: RePEc:ris:eibefr:2002_001
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  1. repec:sae:niesru:v:160:y::i:1:p:63-75 is not listed on IDEAS
  2. Denny, Kevin & Harmon, Colm & Redmond, Sandra, 1999. "Wages and Human Capital: Evidence from the Irish Data," Papers 99/3, College Dublin, Department of Political Economy-.
  3. John FitzGerald, 1999. "Understanding Ireland's Economic Success," Papers WP111, Economic and Social Research Institute (ESRI).
  4. John FitzGerald, 1998. "An Irish Perspective on the Structural Funds," Papers WP094, Economic and Social Research Institute (ESRI).
  5. John FitzGerald, 2000. "Ireland's Failure-And Belated Convergence," Papers WP133, Economic and Social Research Institute (ESRI).
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