The contribution of political leadership to economic growth during the Celtic Tiger period

Essay, 2011

10 Pages, Grade: 70%; 1,5


Table of Contents

1. Introduction

2. An Open Economy
2.1 - Policies in the 1960s
2.2 - Joining the European Economic Community

3. Education
3.1 - Ireland’s Skilled Workforce

4. Fiscal Policy
4.1 - Taxation

5. Social Policies
5.1 - Social Partnership

6. Industrial Policies
6.1 - Public Enterprises
6.2 - Foreign Direct Investment

7. Conclusion

8. Bibliography
8.1 – Books
8.2 – Journals
8.3 – Internet Resources

1. Introduction

In 2007 the real GDP growth rate was at 6%.[1]

In 2007 the unemployment rate was at 4%.[2]

In 2007 general government debts accounted for 25% of the GDP.[3]

These are some facts on Ireland by the end of 2007. All three figures are well below the EU average and Ireland is one of the wealthiest countries worldwide. Ireland’s economic success is unprecedented in Europe. Therefore the green Island was also known as the “Celtic Tiger”.

Critics argue that Ireland’s economic success predominantly arose from external factors, such as EU grants and Foreign Direct Investment (FDI). But is this really the case? Probably not, but it was the political framework that established the favourable economic environment.

This paper analyses the impact of political leadership to the economic boom between 1990 and 2007. Since it was not a single decision that attracted foreign firms, but rather an evolving process that fuelled Ireland’s economy, the essay covers the whole period of time between the 1950s and the 2000s.

2. An Open Economy

2.1 - Policies in the 1960s

The problem was obvious: In the early 20th century Irish political leaders sealed off the country from the rest of the globalizing world. Tariffs and trade barriers hampered any industrial development.

Political leaders changed their attitude in 1960. They abandoned the old-fashioned inward-looking strategy and focused instead on the modern open-market policy. Lemass, the successor of de Valera, “opened [Ireland’s] economy, its society and its politics to the modern world”[4]. In 1965 the Anglo-Irish Trade Area Agreement was negotiated, only two years later the Irish government signed the General Agreement on Tariffs and Trade (GATT).[5]

2.2 - Joining the European Economic Community

Ireland joined the EEC (hereinafter referred to as EU) in 1973. The EU market is one “in which free movement of goods, services, capital and persons is ensured and in which European citizens are free to live, work, study and do business.”[6]

Being a member of the EU meant both bigger access to factors of production and serving more consumers. In the course of the years the EU constantly removed tariffs and restrictions on competition. While Irish companies, often ineffective due to former protection by law, suffered from the new European competition, Ireland saw chances to attract American companies who were willing to enter the European market.[7]

Opening the market drove the Irish economy to success. In 1983, “there were almost 1000 foreign firms in Ireland and they had invested well over £4 billion in the country”[8]. The removal of export tariffs led to an enormous increase of exports as a percentage of gross output from 19.4% in 1960 to about 41% in 1987[9].

The choice to open the market was an inevitable political decision. It was wise to rely not only on the domestic but on an international market. The open economy and also the EU membership paved the way for the Celtic Tiger.


[1] IndexMundi, Ireland-GDP, <>, Last accessed: 12.03.2011

[2] IndexMundi, Ireland-Unemployment, <>, Last accessed: 12.03.2011

[3] NTMA, Government Debt /GDP Ratio, <>, Last accessed: 12.03.2011

[4] Green is Good, Economist, 1997, p.21-24

[5] O’Hagon and Newman, 2008, p.21-22

[6] Europa - Internal Market, <>, Last accessed: 13.03.2011

[7] O’Hagon and Newman, 2008, p.22

[8] Kirby, 2002, p.18

[9] Kirby, 2002, p.18

Excerpt out of 10 pages


The contribution of political leadership to economic growth during the Celtic Tiger period
Dublin City University
Introduction to Modern Ireland
70%; 1,5
Catalog Number
ISBN (eBook)
ISBN (Book)
File size
626 KB
This is an excellent essay. Its greatest strength, is the subtle argument that the Celtic Tiger profited from a policy framework that developed over a long period. It is also very well structured, with analysis of Ireland that is generally correct.
Ireland, European, Celtic, Politics, Irland, Europäische, Integration, Keltischer, Tiger, Politik
Quote paper
Constantin Huesker (Author), 2011, The contribution of political leadership to economic growth during the Celtic Tiger period, Munich, GRIN Verlag,


  • No comments yet.
Read the ebook
Title: The contribution of political leadership to economic growth during the Celtic Tiger period

Upload papers

Your term paper / thesis:

- Publication as eBook and book
- High royalties for the sales
- Completely free - with ISBN
- It only takes five minutes
- Every paper finds readers

Publish now - it's free