CASE 2: Irelands Economic Transformation

Summary

Irelands economic growth over the past 35 years has been remarkable. The country boasts one of the developed nations' highest sustained economic growth rates. Currently, it has a Gross National Income (GNI) per capita of $64,000. This number is comparable to the United States and significantly higher than the United Kingdom and Germany. However, Irelands economic transformation has not always been easy. Following its independence from the United Kingdom in 1922, Ireland adopted a nationalistic agenda, with a policy of high trade barriers and import substitution that stagnated its economy. The situation in Ireland was so bad that many people left, hoping to build better lives elsewhere. In 1987, Ireland admitted defeat and moved in a new direction, deregulating business, lowering corporate and individual tax rates, cutting public spending, and encouraging private enterprise. Irelands transformation was facilitated by its young, well-educated workforce and membership in the European Union. Under its new agenda, Ireland became a magnet for foreign technology companies, including Intel, Microsoft, Google, and Apple. The countrys private sector grew substantially, supporting a sustained period of economic growth. The 2008 great recession revealed a property bubble that eventually forced Ireland to seek financial assistance from the European Union and the IMF. However, despite a temporary slowdown related to the COVID-19 pandemic, Irelands economy is back on track today. Discussion of the case can begin with the following questions:

QUESTION 1: Following its independence from the United Kingdom in 1922, Ireland embraced nationalistic policies. Why did the country choose this path?

QUESTION 2: How did economic and political reforms in the early 1980s help Ireland achieve its current economic growth trajectory?

QUESTION 3: Many U.S. tech companies have invested in Ireland. How was Ireland able to attract these companies, and what do they mean to future economic growth in the country?

Three page response, single spacing.