It is difficult to believe now that one country recently sent 19 delegations to Ireland to study how well our economy was managed. The revelation that our model of economic management featured positively in political and economic discussion in countries including Estonia, Greece and Scotland may also come as a surprise.
As we survey the ruinous aftermath of the collapse of a property and banking bubble, it is salutary to read that ‘Ireland turned out to be the first country in which policy makers would turn to get ideas about successful public policy reforms, almost in every single sector of public policy’.
This is one the most interesting insights of What Did We Do Right?: Global Perspectives on Ireland’s Miracle edited by Michael J O’Sullivan and Rory Miller. Experts from abroad review the positive elements of our recent economic performance and analyse what other economies can learn from our experience.
This books stands out as welcome antidote to analytical gloom. It reminds the reader that in our recent history, economic and regulatory decisions have been made which were correct, and which worked.
It achieves this through breadth of analysis. Reviews from Scotland, France and America are amongst the more predictable inclusions. However the insights from Greek, Chinese, Vietnamese, Egyptian and Indian experts provide a fresh spectrum of thinking.
A shared framework engaged in by most of these writers involves dividing our performance into two independent, though overlapping, phases. The first ‘catch up’ era saw income, employment and standard of living surge. This economic miracle then gave way to the collapse of a bubble, that is seeing the loss of many of those gains.
The articles in this book focus on this first stage as a period that can be learned from. Khuong Minh Vu compares Vietnam to Ireland in its success of supporting free markets, proper governance and human capital development. A comparison of Irish and Portuguese productivity gains by Perdro Lains shows how exceptional productivity gains by Irish workers underpinned our competitive advantage.
While these essays do not uncover any new causes for our economic resurgence and decline, the interest is in the relative weight they allocate to commonly understood factors.
They argue that ‘intangible infrastructure’ was crucial in driving our economic performance. These are defined as ‘the set of factors that develop human capability and permit the easy and efficient growth of business activity’. These elements are mainly political or social and include respect for the rule of law, a strong intellectual property framework and respect for our institutions.
Many of these commentators review how these capacities led to the decisions on ‘harder’ infrastructure or investments. This includes our ability to win foreign direct investment and creating an environment to reward business endeavour.
This strongly infers that the failure of regulatory systems, the demise in the value of legitimate profit making activity, and the collapse of social partnership, will not just have a current cost. It will erode the ability to make the shared decisions to keep our country and economy secure.
The erosion of these elements means that no author greets the subsequent collapse with any surprise. As the editors acknowledge ‘there is no sign here of the mixture of denial and bewilderment that colours the accounts of Irish policy makers and commentators’.
A reminder of how our own decisions contributed to sustainable growth is needed. This is not just for our national mood, but also to help ensure similar policies are pursued in the future.
A crucial conclusion is that efforts to rebuild intangible infrastructure are, at least, of equal importance as decisions on our roads, broadband and Luas lines. Decisions on protecting international property, restoring the effectiveness of law, and rebuilding faith in the fairness of our institutions will make a crucial difference.
All books are a product of their time and liable to date as soon as they are published. However international comment on how we are dealing with the national depression is of real interest at home. In fairness, the editors are clear in acknowledging their focus on the ‘pre-collapse’ stage. But some comment from this rich array of writers on how current efforts are perceived would have added to the interest and appeal of this work.
The authors conclude by noting that ‘nations and economies have emerged strongly from crises once they have undertaken serious reform and adapted themselves to the new world order’.
This work forcefully reminds us that we have made these changes in the recent past and that we can do so again.