Niamh Hardiman

From Tiger to PIIGS: Ireland and the use of heuristics in comparative political economy

Acronyms for groups of countries provide an often useful shorthand to capture emergent similarities, and terms such as PIIGS, BRICs and LDCs pervade the lexicon of international and comparative political economy. But they can also lead to misleading narratives, since the grounds for use of these terms as heuristic devices are usually not well elaborated. This can become problematic when the use of such heuristics drives market responses in areas such as risk perception and changes in interest rates. In this paper we look at the narrative construction of the group of countries that has been grouped as ‘PIIGS’ (Portugal, Ireland, Italy, Greece, and Spain). We examine the process whereby the group came into being, trace how Ireland became a member of this grouping, and assess the merits of classifying these countries together. Our contention is that the repetition of the acronym in public debate shaped the behaviour of market actors toward these countries. We find evidence of Granger causality, such that increased media usage of the term ‘PIIGS’ is followed by converging interest rate correlations between Ireland and the other PIIGS, compared to the interest rate correlations between Ireland and the ‘northern’ Eurozone economies. We argue that this is a pointer toward the independent effect of perceptions and discourse over economic fundamentals. We conclude with more general thoughts and cautions on the use of heuristics in comparative political economy.

The Development of the Irish Tax State

The method by which states raise their revenues is a fundamental feature of politics. The issues of who pays and who does not pay, how the shares are divided out, and what methods of payment are imposed, are central to the social process of the allocation of resources. States vary widely in the way they organise the structures of taxation, and within a single state, we may see shifts over time in the manner in which the tax burden is imposed. Accounting for the pattern of revenue-raising has become a central concern in comparative political science. Various explanatory variables have been adduced as being important: the institutional configuration through which decisions are made, the relative strength of societal interests and their lobbying powers, and the partisan preferences of governing parties. This paper draws on these explanatory tools in exploring the changing features of tax revenues in Ireland.

Fiscal politics in time : pathways to fiscal consolidation in Ireland, Greece, Britain, and Spain, 1980-2012

The comparative study of debt and fiscal consolidation has acquired a new focus in the wake of the global financial crisis. This paper re-evaluates the literature on fiscal consolidation that flourished during the 1980s and 1990s. The conventional approach to explanation is based on segmenting episodes of fiscal change into discrete observations. We argue that this misses the dynamic features of government strategy, especially in the choices made between expenditure-based and revenue-based fiscal consolidation strategies. We propose a focus on pathways rather than episodes of adjustment, to capture what Pierson terms ‘politics in time’. A case-study approach facilitates analysis of complex causality that includes the structures of interest intermediation, the role of ideas in shaping the set of feasible policy choices, and the situation of national economies in the international political economy. We support our argument with qualitative data based on two case studies, Ireland and Greece, and with additional paired comparisons of Ireland with Britain, and Greece with Spain. Our conclusions suggest that the conventional literature, by excluding key political variables from consideration, may distort our understanding and result in misleading policy prescription.

Ordering Things: The Irish State Administration Database

New theoretical approaches to the state have posed challenges for the comparative analysis of the organizational features of states. The analysis of state bodies and state agencies has largely been confined to the sub-discipline of public administration, and has been resistant to the systematic classification that has made progress possible in other areas of comparative politics. This article argues that there is much to be gained by reconceptualizing state bodies in a comparative context. This paper profiles the classification system underlying the construction of the Irish State Administration Database (ISAD). This paper sets out a new approach to conceptualizing the organizational and functional features of states. ISAD not only provides a valuable research resource for work on the Irish state, but also can provide a framework for building a comparative research agenda.

The Politics of Economic Adjustment in a Liberal Market Economy: The Social Compensation Hypothesis Revisited

Abstract The ‘compensation hypothesis’ holds that increasing trade exposure gives rise to pressures for an expansion in public spending, especially on welfare items. We argue that the underlying relationship between economic openness and public spending and particularly on welfare effort in Ireland shows a surprising consistency that is at odds with this hypothesis. Our preliminary estimates show a persistently weak relationship between trade openness and ‘social compensation’, unlike the experience of other small open economies. We seek to explain these findings with reference to both structural economic constraints and domestic political preferences.

State Retrenchment and Administrative Reform in Ireland: Probing Comparative Policy Paradigms

Abstract Policy choices in response to crisis may carry consequences both for distributive outcomes and for the future policy capacity of the state itself. This paper uses conceptual heuristics to interpret policy practice. It examines the underlying policy paradigms shaping Irish government decisions in the aftermath of the European financial and economic crisis. Drawing on comparative political economy literature, it distinguishes between two such paradigms – market-conforming and social equity – and applies them to three reform themes: reconfiguration of public budgets, the public service pay bargain, and the organizational profile of state competences. The findings entail lessons for understanding the malleability of policy choice, and how state policy choices in response to crisis are framed and implemented.

The New Politics of Austerity: Fiscal Responses to Crisis in Ireland and Spain

This paper adopts a new analytical approach to explaining choices in fiscal politics in Ireland and Spain between 2008 and 2010, in response to international economic crisis. It adopts a comparative cross-national research design to explore why two countries with similar pre-crisis fiscal profiles adopted radically different strategies in the initial phase of the crisis: Ireland adopted an orthodox deficit-reduction strategy, while Spain implemented a ‘heterodox’ stimulus fiscal package. Yet by mid-2010, Spain’s fiscal stance had converged with Ireland’s, as the wider European crisis deepened and the scope for autonomous national policy choice narrowed. The paper tracks this shift in a second stage of the research design, examining within-country variation over time, to provide a nuanced and sophisticated analysis of strategic choices at critical moments. It argues that the shift toward a European politics of austerity is different in a number of important ways from the older politics of fiscal consolidation, and that this has far-reaching implications not only for the evolution of European integration, but also for the balance between democratic politics and transnational markets.

The Troika’s variations on a trio: Why the loan programmes worked so differently in Greece, Ireland, and Portugal

Portugal and Ireland exited Troika loan programmes; Greece did not. The conventional narrative is that different outcomes are best explained by differences in national competences in implementing programme requirements. This paper argues that three factors distinguish the Greek experience from that of Ireland and Portugal: different economic, political, and institutional starting conditions; the ad hoc nature of the European institutions’ approach to crisis resolution; and the very different conditionalities built into each of the loan programmes as a result. Ireland and Portugal show some signs of recovery despite austerity measures, but Greece has been burdened beyond all capacity to recover convincingly.

The politics of fiscal effort in Ireland and Spain: market credibility versus political legitimacy

National governments within the eurozone have had to face tough choices between the need to devise policy responses to stabilise market expectations and the pressure to maintain responsiveness and accountability to their own voters. As Hindmoor and McConnell argue in Chapter 1 of this volume, the dynamics of political competition between the main political parties are central to accounting for what governments choose to do. We wish to show that crisis conditions heighten the difficulties governments experience in bridging the twin demands of economic stabilisation and political legitimacy, and this plays out rather differently depending on the nature of the political cleavages and the degree of policy convergence across the main political parties.