1. Ireland’s Celtic Tiger: The Social Impact of Economic Growth Peadar Kirby Professor of International Politics and Public Policy University of Limerick

2. Introduction 2007 election: people voted for ‘wealth over health’ draws attention to social deficits Main ‘puzzle’ of Irish ‘boom’ success in growth, employment, exports failures in poverty, inequality, health provision Uncovers ambiguous nature of Ireland’s adaptation to globalisation salutary lessons for other latercomers

3. Social impacts Three principal forms: Inequality Multiple and reinforcing State helps produce it Social provision Decline in state spending as % of GDP/GNP: outlier in EU ‘Anorexic welfare state’ (Boyle, 2005) Social breakdown Violence, drugs, suicide Erosion of sense of belonging

4. Accidental or structural? Nature of the Irish ‘model’: Based on attracting high levels of FDI IDA as ‘hunter and gatherer’ Low corporation tax as key mechanism Contribution of education EU structural funds A low-tax model supplemented by EU social investment Regressive nature of structure of taxation Vulnerabilities of tax base

5. Nature and role of the state An activist state But a fragmented one For long industrial policy left to IDA Captured by MNC interests In 1980s new spaces emerged for policy innovation Helped by EU funding Innovation smothered by neo-liberal tax cutting from mid 1990s

6. What kind of state? A developmental network state or a competition state? Uneven nature of state capacity Success in winning FDI contrasts with relatively weak state of indigenous industry Very successful macroeconomic management contrasts with poor state of health services Institution of social partnership hides highly elitist nature of policy making Central logic informing state actions is economic competitiveness

7. International comparisons No attention by Irish analysts to question of size Neo-classical economists regularly compare Ireland to US! How does size constrain? How manoeuvre? Benefit of comparative studies with other small states Study of Ireland and Costa Rica (Paus, 2005)

8. Facing the challenges ahead Ireland’s long-term development problems camouflaged rather then resolved Economic dependence: Vulnerabilities of Irish model: failure to embed success in indigenous economy Social inequality: Legacy of deepening social polarisation: failure to foster a more egalitarian society Role of the state: Capacity developed but too fragmented: failure to balance regime of accumulation with strong regime of distribution

9. Conclusions Ireland is a major success case if all we observe are growth indicators But economic growth is not an end but a means to a better society This requires a strong regime of distribution, usually fostered through an activist civil society Ireland has squandered much of its opportunity for development Now faces need to develop capacity amid cutting costs It is a warning of the social costs of economic success in this era of globalisation