Celtic Phoenix or Leprechaun Economics? The Politics of an FDI-led Growth Model in Europe. Issue 2 (4th March 2018)

• Record Type: Journal Article
• Authors: Regan, Aidan; Brazys, Samuel
• Is Part Of: New political economy. Volume 23:Issue 2(2018)
• Page Start: 223
• Page End: 238
• Publication Date: 2018-03-04
• Subjects: Adjustment -- capitalism -- growth models -- European integration; Economics -- Periodicals; International economic relations -- Periodicals; 330.05
• DOI: 10.1080/13563467.2017.1370447
• Languages: English
• ISSNs: 1356-3467

Abstract

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 while 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 workers from the EU and beyond. Building on theories from the study of comparative capitalism, we suggest that this experience indicates that Ireland's FDI-led growth model 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.