IDEAS home Printed from https://ideas.repec.org/a/sae/loceco/v31y2016i8p873-891.html
   My bibliography  Save this article

A cautionary tale of two ‘tigers’: Industrial policy ‘lessons’ from Ireland and Hungary?

Author

Listed:
  • David Bailey
  • Helena Lenihan
  • Alex De Ruyter

Abstract

This paper draws industrial policy lessons for small Central and Eastern European states through a critical evaluation of recent Irish and Hungarian experiences. The paper outlines a ‘holistic view’ of industrial policy before exploring the experiences of the two economies. Whilst both have managed to ‘do’ policy well in some regards, substantial challenges remain in making foreign direct investment attraction the centrepiece of industrial policy, as has been highlighted recently. Overall, the paper suggests that wholesale emulation of the Irish and Hungarian approach is problematic for small open Central and Eastern Europe states, and that more balanced approaches to development – and hence industrial policy – are warranted.

Suggested Citation

  • David Bailey & Helena Lenihan & Alex De Ruyter, 2016. "A cautionary tale of two ‘tigers’: Industrial policy ‘lessons’ from Ireland and Hungary?," Local Economy, London South Bank University, vol. 31(8), pages 873-891, December.
    • Handle: RePEc:sae:loceco:v:31:y:2016:i:8:p:873-891
    DOI: 10.1177/0269094216677779
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.1177/0269094216677779
    Download Restriction: no
    File URL: https://libkey.io/10.1177/0269094216677779?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Howard Stein, 2010. "Financial liberalisation, institutional transformation and credit allocation in developing countries: the World Bank and the internationalisation of banking," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 34(2), pages 257-273, March.
    2. Zoltán J. Ács & Colm O'Gorman & László Szerb & Siri Terjesen, 2015. "Could the Irish Miracle be Repeated in Hungary?," Chapters, in: Global Entrepreneurship, Institutions and Incentives, chapter 30, pages 584-603, Edward Elgar Publishing.
    3. Holger Görg & Eric Strobl, 2016. "Multinational Companies, Technology Spillovers and Plant Survival," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT, chapter 16, pages 289-303, World Scientific Publishing Co. Pte. Ltd..
    4. Krueger, Anne O, 1990. "Government Failures in Development," Journal of Economic Perspectives, American Economic Association, vol. 4(3), pages 9-23, Summer.
    5. repec:bla:jcmkts:v:45:y:2007:i::p:81-103 is not listed on IDEAS
    6. David Coates, 2007. "The Rise and Fall of Japan as a Model of ‘Progressive Capitalism’," Chapters, in: David Bailey & Dan Coffey & Phil Tomlinson (ed.), Crisis or Recovery in Japan, chapter 9, Edward Elgar Publishing.
    7. Lenihan, Helena & Hart, Mark & Roper, Stephen, 2005. "Developing an Evaluative Framework for Industrial Policy in Ireland: Fulfilling the Audit Trail or an Aid to Policy Development?," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2005(2-Summer), pages 1-17.
    8. Holger Gorg & Frances Ruane, 2001. "Multinational Companies and Linkages: Panel-Data Evidence for the Irish Electronics Sector," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 8(1), pages 1-18.
    9. Leonhard Plank & Cornelia Staritz, 2013. "‘Precarious upgrading’ in electronics global production networks in Central and Eastern Europe: the cases of Hungary and Romania," Global Development Institute Working Paper Series ctg-2013-31, GDI, The University of Manchester.
    10. Peter J. Buckley & Frances Ruane, 2010. "Foreign Direct Investment in Ireland: Policy Implications for Emerging Economies," Palgrave Macmillan Books, in: Foreign Direct Investment, China and the World Economy, chapter 16, pages 365-385, Palgrave Macmillan.
    11. André Sapir, 2006. "Globalization and the Reform of European Social Models," Journal of Common Market Studies, Wiley Blackwell, vol. 44(2), pages 369-390, June.
    12. Gabor Hunya, 2014. "Regional Policy and FDI Location – an Overview of the Larger New EU Member States," wiiw Research Reports 393, The Vienna Institute for International Economic Studies, wiiw.
    13. Martin Sokol, 2001. "Central and Eastern Europe a Decade After the Fall of State-socialism: Regional Dimensions of Transition Processes," Regional Studies, Taylor & Francis Journals, vol. 35(7), pages 645-655.
    14. Karoly Fazekas, 2005. "Effects of FDI Inflows on Regional Labour Market Differences in Hungary," Economie Internationale, CEPII research center, issue 102, pages 83-105.
    15. Seá Ó Riain, 2004. "The politics of mobility in technology‐driven commodity chains: developmental coalitions in the Irish software industry," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 28(3), pages 642-663, September.
    16. Frances Ruane & Ali Ugur, 2005. "Export Platform FDI and Dualistic Development," The Institute for International Integration Studies Discussion Paper Series iiisdp028, IIIS.
    17. André Sapir, 2005. "An agenda for a growing Europe: the Sapir report. Special symposium on the report of the Sapir Group," ULB Institutional Repository 2013/8124, ULB -- Universite Libre de Bruxelles.
    18. Deborah Mabbett & Waltraud Schelkle, 2007. "Bringing Macroeconomics Back into the Political Economy of Reform: the Lisbon Agenda and the ‘Fiscal Philosophy’ of EMU," Journal of Common Market Studies, Wiley Blackwell, vol. 45(1), pages 81-103, March.
    19. David Bailey & Alex De Ruyter & Noel Kavanagh, 2007. "Lisbon, Sapir and Industrial Policy: Evaluating the 'Irish Success Story'," International Review of Applied Economics, Taylor & Francis Journals, vol. 21(3), pages 453-467.
    20. Ashish Arora & Alfonso Gambardella, 2005. "The Globalization of the Software Industry: Perspectives and Opportunities for Developed and Developing Countries," NBER Chapters, in: Innovation Policy and the Economy, Volume 5, pages 1-32, National Bureau of Economic Research, Inc.
    21. Patrizio Bianchi & Sandrine Labory (ed.), 2006. "International Handbook on Industrial Policy," Books, Edward Elgar Publishing, number 3451.
    22. Zoltan Gal, 2013. "New Bangalores - The role of Central and Eastern Europe in business and IT services offshoring," Journal of Economic Development, Environment and People, Alliance of Central-Eastern European Universities, vol. 2(3), pages 77-100, September.
    23. Bernadette Andreosso-O'Callaghan & Helena Lenihan & Padraic Reidy, 2015. "The Development and Growth of the Software Industry in Ireland: An Institutionalized Relationship Approach," European Planning Studies, Taylor & Francis Journals, vol. 23(5), pages 922-943, May.
    24. repec:ulb:ulbeco:2013/8112 is not listed on IDEAS
    25. David Bailey & Helena Lenihan & Ajit Singh, 2009. "Lessons for African Economies from Irish and East Asian Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 357-382, December.
    26. Patrick Collins & Seamus Grimes, 2008. "Ireland's Foreign‐Owned Technology Sector: Evolving Towards Sustainability?," Growth and Change, Wiley Blackwell, vol. 39(3), pages 436-463, September.
    27. André Sapir, 2006. "Globaliseringen och de europeiska sociala modellernas reformering," ULB Institutional Repository 2013/8118, ULB -- Universite Libre de Bruxelles.
    28. David Bailey & Helena Lenihan, 2015. "A Critical Reflection on Irish Industrial Policy: A Strategic Choice Approach," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 22(1), pages 47-71, February.
    29. Karl Aiginger, 2007. "Industrial Policy: A Dying Breed or A Re-emerging Phoenix," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 297-323, December.
    30. Paul Teague, 2009. "Developing Ireland: Committing to Economic Openness and Building Domestic Institutional Capabilities," WIDER Working Paper Series RP2009-24, World Institute for Development Economic Research (UNU-WIDER).
    31. Barry, Frank & Van Egeraat, Chris, 2008. "The Decline of the Computer Hardware Sector: How Ireland Adjusted," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI), vol. 2008(1-Spring), pages 38-57.
    32. Plank, Leonhard & Staritz, Cornelia, 2013. ""Precarious upgrading" in electronics global production networks in Central and Eastern Europe: The cases of Hungary and Romania," Working Papers 41, Austrian Foundation for Development Research (ÖFSE).
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Piers Thompson & Wenyu Zang, 2018. "The foreign business and domestic enterprise relationship: Its implications for local entrepreneurial resilience," Local Economy, London South Bank University, vol. 33(1), pages 10-39, February.
    2. Gál, Zoltán, 2019. "Az FDI szerepe a gazdasági növekedés és a beruházások területi differenciálódásában Magyarországon [The foreign direct investment role in Hungarys economic growth and territorial differentiation of," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(6), pages 653-686.

    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. David Bailey & Helena Lenihan & Ajit Singh, 2009. "Lessons for African Economies from Irish and East Asian Industrial Policy," Journal of Industry, Competition and Trade, Springer, vol. 9(4), pages 357-382, December.
    2. David Bailey & Helena Lenihan & Ajit Singh, 2008. "Tiger, Tiger, Burning Bright? Industrial Policy Lessons from Ireland and East Asia for Small African Economies," Working Papers wp374, Centre for Business Research, University of Cambridge.
    3. Marco R. Di Tommaso & Stuart O. Schweitzer, 2013. "Industrial Policy in America," Books, Edward Elgar Publishing, number 13749.
    4. Olubunmi Ipinnaiye & Declan Dineen & Helena Lenihan, 2017. "Drivers of SME performance: a holistic and multivariate approach," Small Business Economics, Springer, vol. 48(4), pages 883-911, April.
    5. Pisany Paweł, 2016. "Comparative Models of Capitalism in the Areas of Financial System and Corporate Governance – the Diversity of Capitalism Approach Perspective," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 52(1), pages 59-76, December.
    6. Tiago Florindo & Ana I. Ferraz & Ana C. Rodrigues & Leonel J. R. Nunes, 2022. "Residual Biomass Recovery in the Wine Sector: Creation of Value Chains for Vine Pruning," Agriculture, MDPI, vol. 12(5), pages 1-18, May.
    7. Reinhard Steurer & Andre Martinuzzi & Sharon Margula, 2012. "Public Policies on CSR in Europe: Themes, Instruments, and Regional Differences," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 19(4), pages 206-227, July.
    8. Lobanov, M. & Zvezdanovic Lobanova, J. & Zvezdanovic, M., 2022. "Typologization of industrial systems in the countries of Central-Eastern and South-Eastern Europe," Journal of the New Economic Association, New Economic Association, vol. 56(4), pages 92-122.
    9. Hynes, Kate & Kwan, Yum K. & Foley, Anthony, 2020. "Local linkages: The interdependence of foreign and domestic firms in Ireland," Economic Modelling, Elsevier, vol. 85(C), pages 139-153.
    10. Muinelo-Gallo, Leonel, 2022. "Business cycles and redistribution: The role of government quality," Economic Systems, Elsevier, vol. 46(4).
    11. Éloi Laurent & Jacques Le Cacheux, 2007. "The Irish Tiger and the German Frog: A Tale of Size and Growth in the Euro Area," Documents de Travail de l'OFCE 2007-31, Observatoire Francais des Conjonctures Economiques (OFCE).
    12. Nicholas Charron & Niklas Harring & Victor Lapuente, 2021. "Trust, regulation, and redistribution why some governments overregulate and under‐redistribute," Regulation & Governance, John Wiley & Sons, vol. 15(1), pages 3-16, January.
    13. Simona Iammarino, 2018. "FDI and regional development policy," Journal of International Business Policy, Palgrave Macmillan, vol. 1(3), pages 157-183, December.
    14. Ana Filipa Pinto & Hermínia Gonçalves, 2023. "European Tendencies of Territorialization of Income Conditional Policies to Insertion: Systematic and Narrative Review," Societies, MDPI, vol. 13(8), pages 1-20, August.
    15. Gisela Di Meglio & Stefano Visintin, 2014. "Efficiency of the Services Sector: a Parametric Approach," Documentos de Trabajo del ICAE 2014-19, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico.
    16. Pitafi, Abdul Hameed & Rasheed, Muhammad Imran & Kanwal, Shamsa & Ren, Minglun, 2020. "Employee agility and enterprise social media: The Role of IT proficiency and work expertise," Technology in Society, Elsevier, vol. 63(C).
    17. Ylenia Curci & Nathalie Greenan & Silvia Napolitano, 2024. "Innovating for the good or for the bad. An EU-wide analysis of the impact of technological transformation on job polarisation and unemployment," TEPP Working Paper 2024-02, TEPP.
    18. Michael Anyadike-Danes & Mark Hart & Helena Lenihan, 2011. "New business formation in a rapidly growing economy: the Irish experience," Small Business Economics, Springer, vol. 36(4), pages 503-516, May.
    19. Plank, Leonhard & Staritz, Cornelia, 2014. "Global competition, institutional context, and regional production networks: Up- and downgrading experiences in Romania's apparel industry," Working Papers 50, Austrian Foundation for Development Research (ÖFSE).
    20. Asya Bellia & Lorenzo Corsini, 2024. "Disability and Life Satisfaction: The Role of Accessibility," Journal of Happiness Studies, Springer, vol. 25(8), pages 1-37, December.

    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:sae:loceco:v:31:y:2016:i:8:p:873-891. 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: SAGE Publications (email available below). General contact details of provider: http://www.lsbu.ac.uk/index.shtml .

    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.