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Celtic phoenix or leprechaun economics? The politics of an FDI led growth model in Europe

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  • Aidan Regan

    (School of Politics and International Relations, University College Dublin)

  • Samuel Brazys

    (School of Politics and International Relations and Geary Institute for Public Policy, University College Dublin)

Abstract

In this paper we argue that Ireland’s post-crisis economic recovery in Europe was driven by foreign direct investment (FDI) from Silicon Valley, and whilst this growth model was made possible by Ireland’s low corporate tax rates, it was also a result of these firms using Ireland to directly access the European labour market. We evidence this contention via sectoral and geographic analyses while simultaneously showing that Irish fiscal policies have not redistributed gains from the recovery to the broader population. As a result, the economic recovery has been most actively felt by those in the FDI sectors, including foreign-national workers from the EU and beyond. We suggest that this experience indicates that Ireland’s FDI-led model of capitalist development has created clear winners and losers, with significant distributional implications. The FDI growth regime been made possible by inward migration and European integration, but given the unequal distribution of the economic benefits that this generates, it is unlikely to be politically, or electorally, sustainable.

Suggested Citation

  • Aidan Regan & Samuel Brazys, 2017. "Celtic phoenix or leprechaun economics? The politics of an FDI led growth model in Europe," Working Papers 201701, Geary Institute, University College Dublin.
  • Handle: RePEc:ucd:wpaper:201701
    as

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    References listed on IDEAS

    as
    1. Whelan, Karl, 2014. "Ireland’s Economic Crisis: The Good, the Bad and the Ugly," Journal of Macroeconomics, Elsevier, vol. 39(PB), pages 424-440.
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    5. Christopher T. Whelan & Brian Nolan & Bertrand Maítre, 2016. "The Great Recession and the Changing Distribution of Economic Stress across Income Classes and the Life Course in Ireland: A Comparative Perspective," Working Papers 201603, Geary Institute, University College Dublin.
    6. Blyth, Mark, 2013. "Austerity: The History of a Dangerous Idea," OUP Catalogue, Oxford University Press, number 9780199828302.
    7. Alison Johnston & Aidan Regan, 2016. "European Monetary Integration and the Incompatibility of National Varieties of Capitalism," Journal of Common Market Studies, Wiley Blackwell, vol. 54(2), pages 318-336, March.
    8. Thelen,Kathleen, 2014. "Varieties of Liberalization and the New Politics of Social Solidarity," Cambridge Books, Cambridge University Press, number 9781107053168, October.
    9. Anke Hassel, 2014. "The Paradox of Liberalization — Understanding Dualism and the Recovery of the German Political Economy," British Journal of Industrial Relations, London School of Economics, vol. 52(1), pages 57-81, March.
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    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Celtic Phoenix or Leprechaun Economics?
      by Aidan Regan in The Irish Economy on 2017-01-16 23:16:25

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    Cited by:

    1. Dermot Hodson, 2017. "Eurozone Governance in 2016: The Italian Banking Crisis, Fiscal Flexibility and Brexit (Plus Plus Plus)," Journal of Common Market Studies, Wiley Blackwell, vol. 55, pages 118-132, September.
    2. Kerner, Andrew & Crabtree, Charles, 2018. "The Political Economy of Data Production," SocArXiv qsxae, Center for Open Science.
    3. Niamh Hardiman & Joaquim Filipe Araújo & Muiris MacCarthaigh & Calliope Spanou, 2017. "The Troika’s variations on a trio: Why the loan programmes worked so differently in Greece, Ireland, and Portugal," Working Papers 201711, Geary Institute, University College Dublin.

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