Northern Ireland has been characterised as having an excessively large public sector. This characterisation has led some to explain poor regional economic performance in terms of 'crowding out'. This diagnosis has been used to justify a policy of 'rebalancing' and the region copying its southern neighbour's lower rate of corporation tax. The experience of large public sectors in the Nordic economies seems however to suggest that higher public spending is not necessarily damaging. This argument is examined critically. Rodrik's comparative institutional analysis indicates that in the Nordics a large public sector was the result of building a successful tradable private sector rather than its cause. In terms of the possible 'economic dividend' from devolution we suggest that a Hayekian insight is better: no 'silver bullets' exist.JEL codes: O25, O52, R11, R50.

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Should the fiscal powers of the Northern Ireland Assembly be enhanced? Northern Ireland has been characterised by an inability to narrow the persistent economic gap relative to Britain. Some commentators have suggested that regional Corporation Tax variation may be the "game changer" in closing this gap. This paper draws on a range of papers that help us better understand the historical and institutional context. However, the analysis of tax variation is broader than this. Consideration is given as to which taxes might be the most suitable candidates for devolution. While greater tax variations could certainly complement an emphasis on increased competitiveness aimed at improving economic outcomes, they are no substitute for such a focus. As is often the case in institutional and economic development, issues of sequencing and policy capacity are salient.

Measurement of regional competitiveness is an important and complex issue. Previous research has mostly considered national economies. However, indicators and measures identified at the national level may not apply well to regions. This paper contributes to knowledge by providing an analytical narrative of how the concept of the measurement of competitiveness has developed over time in Northern Ireland. The various stages in the development of measurements are critically evaluated. The region's chronic competitiveness shortfall is identified and possible explanations are indicated. The conclusions assess the most recent position regarding competitiveness measurement alongside a review of future research needs.

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