Foreign direct investment,cost competitiveness and the transformation of the Irish economy

Ireland has been the economic success story of the 1990s. Growth in GNP and in employment has far exceeded those seen elsewhere. We ask first whether this is simply a delayed catching-up process. Even if this turns out to be so, the question remains as to what the key differences in policy were between the unsuccessful phase, from 1950 to 1988, and the phenomenally successful phase since then. We present a brief overview of the key differences in terms familiar from conventional growth theory, and go on to look more carefully at the constellation of factors explaining the precise timing of the turnaround in economic fortunes.