These Little PIIGS Went to Market: Enterprise Policy and Divergent Recovery in European Periphery

Samuel Brazys and Aidan Regan
Additional contact information
Samuel Brazys: School of Politics and International Relations and Geary Institute for Public Policy, University College Dublin
Aidan Regan: School of Politics and International Relations, University College Dublin

No 201517, Working Papers from Geary Institute, University College Dublin

Abstract: The 2008 financial crisis hit few places harder than the European periphery. Faced with high levels of public debt, Portugal, Italy, Ireland, Greece and Spain (the PIIGS) were each compelled to implement harsh austerity reforms. Yet despite this common policy response, the recoveries, particularly in Ireland, have shown significant divergence. We challenge the prevailing narrative that Ireland’s export-led recovery from the crisis is due to austerity induced cost competitiveness. Instead, we argue that Ireland’s state-led enterprise policy situated the country to be a recipient of foreign direct investment driven by the low borrowing costs, brought on by the United States’ Quantitative Easing (QE) programs. Using quantitative and qualitative investigation we find evidence that this state-led enterprise policy mechanism, rather than austerity-induced cost competitiveness, kick started Ireland’s export growth engine. As Ireland is a critical case for the “success” story of austerity in Europe, our findings represent a significant challenge to the politics of adjustment in the Eurozone.

Keywords: Austerity; Crisis; Debt; Ireland; PIIGS; Enterprise Policy (search for similar items in EconPapers)
Pages: 44 pages
Date: 2016-05-18
New Economics Papers: this item is included in nep-eec and nep-ger
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201517.pdf First version, 2016 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ucd:wpaper:201517

Access Statistics for this paper

More papers in Working Papers from Geary Institute, University College Dublin Contact information at EDIRC.
Bibliographic data for series maintained by Geary Tech ().