The Rise and Fall of the Celtic Tiger: When Deal-Making Trumps Developmentalism

摘要

Over the last two decades, the Irish economy has experienced some of the most remarkable turnarounds in development history. Long one of the poorest countries of Western Europe, with a GDP p.c. of 62 % of the OECD average in 1990, Ireland closed and surpassed this income gap during the 1990s, giving rise to the Celtic Tiger. But by the late 2000s, the country was mired in deep economic crisis. Grounded in a capabilities-based approach, the analysis demonstrates the important role of proactive government policies in promoting social capabilities, advancing local firm capabilities, and supporting the movement of transnational corporations (TNCs) toward higher value-added activities in the host country. The analysis highlights that the presence of TNC production does not automatically translate into technology spillovers to local producers. It illustrates how some location- and time-specific contingencies contributed to successful economic outcomes while others made their achievement more difficult. And it shows how misguided microeconomic incentives and neglect of macroeconomic fundamentals can seriously derail an upgrading strategy and lead to economic crisis.