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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
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    References listed on IDEAS

    as
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    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. 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).
    2. 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.
    3. Kerner, Andrew & Crabtree, Charles, 2018. "The Political Economy of Data Production," SocArXiv qsxae, Center for Open Science.
    4. 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.
    5. 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.
    6. 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.

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