IDEAS home Printed from https://ideas.repec.org/p/ucd/wpaper/201701.html
   My bibliography  Save this paper

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

Author

Listed:
  • 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

    Download full text from publisher

    File URL: http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201701.pdf
    File Function: First version, 2017
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stephen Kinsella, 2012. "Is Ireland really the role model for austerity?," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 36(1), pages 223-235.
    2. Jonathan P Doh & Kraiwinee Bunyaratavej & Eugene D Hahn, 2009. "Separable but not equal: The location determinants of discrete services offshoring activities," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(6), pages 926-943, August.
    3. Robert E. Lipsey, 2010. "Measuring The Location Of Production In A World Of Intangible Productive Assets, Fdi, And Intrafirm Trade," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 56(s1), pages 99-110, June.
    4. 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.
    5. 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.
    6. 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.
    7. Ban, Cornel, 2016. "Ruling Ideas: How Global Neoliberalism Goes Local," OUP Catalogue, Oxford University Press, number 9780190600396.
    8. Whelan, Karl, 2014. "Ireland’s Economic Crisis: The Good, the Bad and the Ugly," Journal of Macroeconomics, Elsevier, vol. 39(PB), pages 424-440.
    9. Dancygier,Rafaela M., 2010. "Immigration and Conflict in Europe," Cambridge Books, Cambridge University Press, number 9780521150231.
    10. Thelen,Kathleen, 2014. "Varieties of Liberalization and the New Politics of Social Solidarity," Cambridge Books, Cambridge University Press, number 9781107679566.
    11. Dancygier,Rafaela M., 2010. "Immigration and Conflict in Europe," Cambridge Books, Cambridge University Press, number 9780521199070.
    12. Blyth, Mark, 2013. "Austerity: The History of a Dangerous Idea," OUP Catalogue, Oxford University Press, number 9780199828302.
    13. Thelen,Kathleen, 2014. "Varieties of Liberalization and the New Politics of Social Solidarity," Cambridge Books, Cambridge University Press, number 9781107053168.
    14. Sebastian Dellepiane & Niamh Hardiman, 2012. "Fiscal Politics In Time: Pathways to Fiscal Consolidation, 1980-2012," Working Papers 201228, Geary Institute, University College Dublin.
    Full references (including those not matched with items on IDEAS)

    Citations

    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

    Citations

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


    Cited by:

    1. Niamh Hardiman & Saliha Metinsoy, 2017. "How do ideas shape national preferences? The Financial Transaction Tax in Ireland," Working Papers 201710, Geary Institute, University College Dublin.
    2. Akcay, Ümit & Jungmann, Benjamin, 2022. "Political economy of growth regimes in Poland and Turkey," IPE Working Papers 190/2022, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Bulfone, Fabio & Ergen, Timur & Kalaitzake, Manolis, 2022. "No strings attached: Corporate welfare, state intervention, and the issue of conditionality," MPIfG Discussion Paper 22/2, Max Planck Institute for the Study of Societies.
    4. 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.
    5. Kerner, Andrew & Crabtree, Charles, 2018. "The Political Economy of Data Production," SocArXiv qsxae, Center for Open Science.
    6. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Baccaro, Lucio & Pontusson, Jonas, 2018. "Comparative political economy and varieties of macroeconomics," MPIfG Discussion Paper 18/10, Max Planck Institute for the Study of Societies.
    2. Donato Di Carlo & Christian Lyhne Ibsen & Oscar Molina, 2024. "The new political economy of public sector wage-setting in Europe: Introduction to the special issue," European Journal of Industrial Relations, , vol. 30(1), pages 5-30, March.
    3. Schneider, Martin R., 2021. "Labor-Management Relations and Varieties of Capitalism," GLO Discussion Paper Series 934, Global Labor Organization (GLO).
    4. Weisstanner, David, 2019. "Insiders under pressure: Flexible employment and wage inequality," INET Oxford Working Papers 2019-06, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    5. Ochsenfeld, Fabian, 2018. "The Relational Nature of Employment Dualization: Evidence from Subcontracting Establishments," SocArXiv ta4r6, Center for Open Science.
    6. Arthur Corazza, 2020. "Power, interest and insecurity: A comparative analysis of workplace dualization and inclusion in Europe," LEQS – LSE 'Europe in Question' Discussion Paper Series 153, European Institute, LSE.
    7. Chiara Benassi, 2016. "Liberalization Only at the Margins? Analysing the Growth of Temporary Work in German Core Manufacturing Sectors," British Journal of Industrial Relations, London School of Economics, vol. 54(3), pages 597-622, September.
    8. Liam Kneafsey & Aidan Regan, 2019. "The Role of the Media in Shaping Attitudes Toward Corporate Tax Avoidance: Experimental Evidence from Ireland," Working Papers 201904, Geary Institute, University College Dublin.
    9. Thomas Paster & Dennie Oude Nijhuis & Maximilian Kiecker, 2020. "To Extend or Not to Extend: Explaining the Divergent Use of Statutory Bargaining Extensions in the Netherlands and Germany," British Journal of Industrial Relations, London School of Economics, vol. 58(3), pages 532-557, September.
    10. Fleckenstein, Timo & Lee, Soohyun Christine, 2018. "Organised labour, dualisation and labour market reform:Korean trade union in economic and social crisis," LSE Research Online Documents on Economics 86340, London School of Economics and Political Science, LSE Library.
    11. Werner Eichhorst & Paul Marx, 2021. "How stable is labour market dualism? Reforms of employment protection in nine European countries," European Journal of Industrial Relations, , vol. 27(1), pages 93-110, March.
    12. Christian Lyhne Ibsen & Lisa Sezer & Virginia Doellgast, 2023. "Coordination versus organization: Diverging logics of firm cooperation in Denmark and Sweden," British Journal of Industrial Relations, London School of Economics, vol. 61(3), pages 526-549, September.
    13. Guglielmo Meardi & Melanie Simms & Duncan Adam, 2021. "Trade unions and precariat in Europe: Representative claims," European Journal of Industrial Relations, , vol. 27(1), pages 41-58, March.
    14. Egidio Riva & Roberto Rizza, 2021. "Who receives occupational welfare? The importance of skills across Europe’s diverse industrial relations regimes," Transfer: European Review of Labour and Research, , vol. 27(1), pages 97-112, February.
    15. Susanne Pernicka & Vera Glassner & Nele Dittmar & Klaus Neundlinger, 2021. "Forces of reproduction and change in collective bargaining: A social field perspective," European Journal of Industrial Relations, , vol. 27(3), pages 345-363, September.
    16. Xavier St‐Denis & Matissa Hollister, 2023. "Two paths towards job instability: Comparing changes in the distribution of job tenure duration in the United Kingdom and Germany, 1984–2014," British Journal of Industrial Relations, London School of Economics, vol. 61(3), pages 723-751, September.
    17. Dingeldey, Irene & Kathmann, Till, 2017. "Einführung und Wirkmächtigkeit des gesetzlichen Mindestlohns in Deutschland: Institutionelle Reformen und gewerkschaftliche Strategien in einem segmentierten Tarifsystem," Schriftenreihe Institut Arbeit und Wirtschaft 21/2017, Institut Arbeit und Wirtschaft (IAW), Universität Bremen und Arbeitnehmerkammer Bremen.
    18. Daniel Herrero & Julián López-Gallego, 2022. "Revisiting varieties of capitalism: an empirical analysis of the institutional determinants of innovation in Germany," SN Business & Economics, Springer, vol. 2(8), pages 1-31, August.
    19. David Weisstanner, 2017. "Dualization and inequality revisited: Temporary employment regulation and middle-class incomes," LIS Working papers 720, LIS Cross-National Data Center in Luxembourg.
    20. Martin Behrens & Andreas Pekarek, 2021. "Divided We Stand? Coalition Dynamics in the German Union Movement," British Journal of Industrial Relations, London School of Economics, vol. 59(2), pages 503-531, June.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    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:ucd:wpaper:201701. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Geary Tech (email available below). General contact details of provider: https://edirc.repec.org/data/geucdie.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.