Governing the Economy: A Triple Crisis

Abstract:     
The international economic crisis hit Ireland hard from 2007 on. Ireland’s membership of the Euro had a significant effect on the policy configuration in the run-up to the crisis, as this had shaped credit availability, bank incentives, fiscal priorities, and wage bargaining practices in a variety of ways. But domestic political choices shaped the terms on which Ireland experienced the crisis. The prior configuration of domestic policy choices, the structure of decision-making, and the influence of organized interests over government, all play a vital role in explaining the scale and severity of crisis. Indeed, this paper argues that Ireland has had to manage not one economic crisis but three – financial, fiscal, and competitiveness. Initial recourse to the orthodox strategies of spending cuts did not contain the spread of the crisis, and in November 2010 Ireland entered an EU-IMF loan agreement. This paper outlines the pathways to this outcome.

Number of Pages in PDF File: 41

Keywords: Ireland, economic crisis, EU, economic governance

JEL Classification: E61, E62, E65, H11, H30, H61, H63, O50, O52, O57, P52

Accepted Paper Series