It’s a question I hope to learn more about.
These kinds of debates always take on heavy ideological overtones. There was the ‘what made the Asian Tigers roar’ debate of the 1980s in which free traders spoke past protectionists and didn’t get very far. There was the ‘Why can’t we be more like New Zealand’ debate until it became harder and harder to ignore the fact that it would be the last thing you’d do if you thought results should be your guide. New Zealand’s performance has been truly aweful – and indeed mysteriously so.
Now of course Ireland’s extraordinary performance can’t be ignored. Their GDP per capita growth has pretty much doubled the next best developed country of any size in the last couple of decades. It’s produced the amazing graph you see above.
The thing about Ireland is that it looks like it’s pursued something a bit like an extension of the approach to economic policy that we did under the Accord. There’s a long standing and continually growing accord between the government, labour and business and others. Is it integral to Ireland’s success? I don’t know right now, but I hope to know more soon.
But if you’re doing a quick job (pdf) for the Cato Institute, (not to be confused with our own C8to institute) it’s better not to even ask. Better to just assume the answer, and of course the answer is ‘economic freedom’. Ireland increased economic freedom and Bob was it’s uncle.
Sure enough wherever the paper goes, it finds that Ireland succeeded because it increased economic freedom. It doesn’t mention the labour market. And barely mentions education. Instead it finds significance in this fact. “Although Ireland has had relatively free trade for a long time the mean tariff rate continued to decline from 7.5 percent in 1985 to 6.9% in 1999.
But be assured, and be advised dear readers that Troppo’s chief investigative economist will battle on through it all and report back.