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 Explaining The Celtic Tiger, Where did it come from?
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Back in the early 1990s nobody foresaw the arrival of the Celtic Tiger in Ireland. The term itself, since its first appearance in the mass media, has been a subject of rigorous academic scrutiny. Various theorists of the developmental state, historians, political scientists and, naturally, politicians saw the underlying causes of the Celtic Tiger from two completely different angles. One group argued that the economic boom of the 1990s was a result of a series of strategic policies pursued by the successive Irish governments since the 1960s while the other saw it in a more global and dependency perspective. Nonetheless, divided as they are they all agree on one point – something has been happening in Ireland over the last decade and none of them seems to be saying that nothing has changed in that country at least in the economic sphere. But could the Irish experience be explained purely in economic terms? Or was it perhaps a result of a freakish conflation of various political, economic and historical factors?
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Polish politicians before 2004 used to show Ireland as an example of the EU's funds key role in the economic development. And their view is quite popular in Poland, but as always - the problem is more complicated.
The Irish government had changed its economic policy in the early 60s: it decided to end protectionism strategy. Firstly they had signed the agreement with the UK (AIFTA - Anglo-Irish Free Trade Agreement), then in 1973 Ireland became a member of EEC (European Economic Community, actually European Union).
Irish economic growth was fast in the 70s and it accelerated after access to the EEC. But it wasn't so impressive in comparison to the 90s.
QUOTE(paulus) Back in the early 1990s nobody foresaw the arrival of the Celtic Tiger in Ireland. (...) One group argued that the economic boom of the 1990s was a result of a series of strategic policies pursued by the successive Irish governments since the 1960s
The other thing is that thirty years before rapid economic growth in Ireland there was a baby boom, so in 90s demographic structure was really profitable and labour force rate very high. The same benefit has the Polish economy now. Irish investment in education since 1960s caused, that their labour force was highly valued by entrepreneurs. Mixed with low taxes, effective government policy and slow increase in wages - it was enough for bigger and smaller investors - foreign as well as domestic.
QUOTE(paulus) the other saw it in a more global and dependency perspective
It's the next important factor. Irish rapid development was built on the strong effect of convergency in Europe. GDP per capita in 1992 was 79% of the EU average, in 1997 it was 103%. But to make use of this effect the proper economic policy was needed.
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QUOTE Polish politicians before 2004 used to show Ireland as an example of the EU's funds key role in the economic development. And their view is quite popular in Poland, but as always - the problem is more complicated.
The most benefits from being in UE Ireland got in early 90's, and then the growth was high, but not as great as later(in comparison to last years). So it is no right to emphasise UE dotations and support as a main factor of Irish success.
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QUOTE(krzystofer @ 11/10/2006, 20:37) The most benefits from being in UE Ireland got in early 90's, and then the growth was high, but not as great as later(in comparison to last years). So it is no right to emphasise UE dotations and support as a main factor of Irish success.
I've found some data to analyze this problem...
According to the European Commission, structural funds in years 1989-1993 created an extra 0,5% GDP average growth per year in Spain, Portugal, Greece and Ireland. The accumulated effect of EU's transfers from 1988 to 1999 was an extra 3,7% GDP growth and 0,4% decline in the unemployment rate. In the comparison with the Irish global economic growth it's not an amazing achievement, but we should remember that it's impossible to check how many investors had been attracted by developing communication, transport and education in Ireland (thanks to EU's funds).
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CODE The other thing is that thirty years before rapid economic growth in Ireland there was a baby boom, so in 90s demographic structure was really profitable and labour force rate very high. The same benefit has the Polish economy now. Irish investment in education since 1960s caused, that their labour force was highly valued by entrepreneurs. Mixed with low taxes, effective government policy and slow increase in wages - it was enough for bigger and smaller investors - foreign as well as domestic.
I think you’ve touched upon a couple of interesting points here. The period between the 1960s and the 1980s was indeed dominated by the state-led heavy investment in technical and scientific education. This one-stream educational policy has often been criticized by various social scientists but it must be noted here that, by and large, it has enjoyed the support of the public since its very beginning because it led to the creation of a well-educated and IT-oriented workforce which was modern and forward-looking. Thus, while nobody foresaw the arrival of the Celtic Tiger at that time when it did arrive Ireland had a manpower to take advantage of it. So how was education geared up to the arrival of the Celtic Tiger? The roots of the reform of education go back to the 1960s when a series of governmental measures were introduced to adjust the future generations of labour force to the capitalist reality of the post-war world. Crucial in this respect was not only the need to increase participation but also the growing awareness of the link between education and labour demands of a modern capitalist society. It should therefore come as no surprise that in no time education became a social product that could be utilised to achieve economic goals. The Investment in Education Report of 1965 with its emphasis on vocational education heralded the rise of subjects like business, accountancy, economics and engineering. Five years later these aspirations found an outlet in the establishment of the first Regional Technical Colleges which contributed to the creation of the necessary technical reservoir of manpower, so effectively used when it had to meet the demands of the growing IT market in the 1990s. Without the surplus of IT specialists created as a result of those policies the conflation between the IT engineers and the arriving TNCs would never have taken place. This unique development has often been regarded as a fortuitous coincidence yet the specialist knowledge those graduates possessed has proven extremely important considering the type of foreign companies that landed in Ireland. Additionally, their skills were complemented by the fact that they were all English-speaking.
Another unique development closely associated with the Celtic Tiger was the new, totally unheralded by the experience of the previous centuries, demographic phenomenon of mass immigration. The significance of this phenomenon lay in the fact that the immigrant groups consisted not only of guest workers but also involved a large number of Irish returnees. As is well-known many of those ‘homing pigeons’ were third-level graduates who, apart from bringing with them the money earned all over the world, had their own share of skills, ideas and contacts gained while abroad. It is therefore fair to conclude that education, experience and IT knowledge previously regarded as a product for export, should be seen as the underlying causes of the Celtic Tiger.
Best wishes,
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24/06/2006, 8:22
