In 2007 the real GDP growth rate was at 6%.
In 2007 the unemployment rate was at 4%.
In 2007 general government debts accounted for 25% of the GDP.
These are some facts on Ireland by the end of 2007. All three figures are well below the EU average and Ireland is one of the wealthiest countries worldwide. Ireland’s economic success is unprecedented in Europe. Therefore the green Island was also known as the “Celtic Tiger”.
Critics argue that Ireland’s economic success predominantly arose from external factors, such as EU grants and Foreign Direct Investment (FDI). But is this really the case? Probably not, but it was the political framework that established the favourable economic environment.
This paper analyses the impact of political leadership to the economic boom between 1990 and 2007. Since it was not a single decision that attracted foreign firms, but rather an evolving process that fuelled Ireland’s economy, the essay covers the whole period of time between the 1950s and the 2000s.
Table of Contents
1. Introduction
2. An Open Economy
2.1 - Policies in the 1960s
2.2 - Joining the European Economic Community
3. Education
3.1 - Ireland’s Skilled Workforce
4. Fiscal Policy
4.1 - Taxation
5. Social Policies
5.1 - Social Partnership
6. Industrial Policies
6.1 - Public Enterprises
6.2 - Foreign Direct Investment
7. Conclusion
Research Objectives and Core Themes
This paper examines the influence of political leadership on Ireland's significant economic growth between 1990 and 2007. It seeks to determine whether Ireland's "Celtic Tiger" success was primarily driven by external forces or if strategic political frameworks and government policies played the essential role in creating a favorable environment for rapid economic expansion.
- The transition from an inward-looking economy to an open-market model.
- The role of educational investment and workforce development.
- Fiscal strategies, specifically regarding corporate taxation policy.
- The implementation of social partnerships to manage labor relations.
- Industrial policies, including privatization and the attraction of Foreign Direct Investment (FDI).
Excerpt from the Book
2.1 - Policies in the 1960s
The problem was obvious: In the early 20th century Irish political leaders sealed off the country from the rest of the globalizing world. Tariffs and trade barriers hampered any industrial development.
Political leaders changed their attitude in 1960. They abandoned the old-fashioned inward-looking strategy and focused instead on the modern open-market policy. Lemass, the successor of de Valera, “opened [Ireland’s] economy, its society and its politics to the modern world”4. In 1965 the Anglo Irish Trade Area Agreement was negotiated, only two years later the Irish government signed the General Agreement on Tariffs and Trade (GATT).5
Summary of Chapters
1. Introduction: This chapter introduces the context of the Celtic Tiger, presenting key economic data and outlining the central thesis regarding the impact of political leadership.
2. An Open Economy: This section discusses the historical shift in the 1960s from protectionism to an open-market strategy and the subsequent accession to the EEC.
3. Education: This chapter analyzes how government investment in secondary and tertiary education contributed to the development of a highly skilled workforce.
4. Fiscal Policy: This chapter examines the evolution of Ireland's low corporation tax policy and its role in attracting multinational corporations.
5. Social Policies: This section details the introduction of "social partnerships" as a method to mitigate economic crises and harmonize interests between government, unions, and employers.
6. Industrial Policies: This chapter covers the privatization of state-owned enterprises and the strategic efforts of the IDA to secure Foreign Direct Investment.
7. Conclusion: This chapter synthesizes the findings, asserting that political frameworks were the primary catalyst for Ireland's economic transformation.
Keywords
Celtic Tiger, Ireland, Political Leadership, Economic Growth, Foreign Direct Investment, FDI, Social Partnership, Open Economy, Corporate Tax, Industrial Policy, Education, Privatization, Economic History, Trade Policy, Labor Relations.
Frequently Asked Questions
What is the fundamental focus of this paper?
The paper focuses on the economic boom in Ireland between 1990 and 2007, known as the "Celtic Tiger" period, and investigates the role of political leadership in facilitating this growth.
What are the central thematic fields covered?
The study covers trade liberalization, educational reform, fiscal and tax policy, industrial strategy, and social management through partnerships.
What is the primary research question?
The primary goal is to assess to what extent political leadership and the establishment of a favorable economic framework—rather than mere external factors—contributed to Ireland's economic success.
Which scientific method is utilized?
The author employs a historical-analytical approach, reviewing policies from the 1950s through the 2000s to demonstrate how political decisions formed an evolving framework for growth.
What topics are discussed in the main body?
The main body details the shift to an open economy, the expansion of the skilled labor force through education, the implementation of competitive corporate tax rates, the mediation of labor disputes, and the aggressive promotion of Foreign Direct Investment.
Which keywords best characterize this work?
The work is characterized by terms such as Celtic Tiger, Foreign Direct Investment (FDI), Social Partnership, and Economic Policy.
Why was the "social partnership" model considered a success?
It allowed the government and labor unions to reach mutual agreements on wage increases and fiscal policies, which significantly reduced strike days and prevented social unrest during a period of economic transition.
What role did the Industrial Development Authority (IDA) play?
The IDA was critical in attracting high-tech and pharmaceutical companies to Ireland by promoting the country as a destination for foreign investment and fostering export-led growth.
- Quote paper
- Constantin Huesker (Author), 2011, The contribution of political leadership to economic growth during the Celtic Tiger period, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/275950
