Rebalancing and Regional Economic Performance: Northern Ireland in A Nordic Mirror

Abstract

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.

Planning for an ageing city: place, older people and urban restructuring

“…Land assembly, decontamination and infrastructure provision (roads, water, sewage and utilities) dominate the Regional Development Strategy for Northern Ireland (2035) and related planning policy statements and development control guidance. The problem is framed in highly technocratic ways, but in particular by the overarching need to modernise Northern Ireland after decades of violence, deindustrialisation and a failure to connect to the highgrowth, global service economy (Brownlow and Birnie 2018). Growth, competitiveness and creating an enabling environment for investment are dominant tropes.…”

All aboard Belfast’s ‘brandwagon’: from ‘pariah city’ to ‘energised city’

“…Relatedly, the scarring of scathing stereotyping meant Belfast became starved of investment so the city, and the wider region, became reliant on UK Government subvention to support the economy. Today, concerns over dependency on the public sector for GDP and employment feed plans to 'rebalance the economy' towards the private sector and inward investment (Brownlow & Birnie, 2018). More theoretically, this reflects an exposure to the 'competitiveness mantra' and 'conventional economics' of neoliberalism (Boland, 2014;Ramsey, 2013).…”

Sense making of Brexit for economic citizenship in Northern Ireland

“…A first way in which we need to think about the appropriate tools needed to investigate the economic impact on Brexit within Irish Agrifood is to recognise the complexity of the Northern Irish context. Discussions of the Northern Irish economy often assume that the problem is merely that it suffers from an excessive dependence on the public sector and the cure is rebalancing (HM Treasury, 2011, Centre for Economic Empowerment, 2014;MacFlynn, 2016a, Brownlow andBirnie, 2018). Yet this diagnosis is unhelpful in thinking about the post-Brexit economic landscape.…”

“…Yet this diagnosis is unhelpful in thinking about the post-Brexit economic landscape. In essence, NI's economy faces three different categories of economic problem, none of which can be plausibly reduced solely to the relative size of the public sector (Brownlow and Birnie, 2018). 7…”

“…7 In any case large public sectors can correspond with vibrant, successful small open economies (Rodrik, 1998). What the empirical evidence suggests is that NI is not unusual in having a large public sector, but it is unusual in not developing a sufficiently diverse and high performing export sector (Brownlow and Birnie, 2018). 8 Most evidence on productivity points to the ownership structure and firm size being key determinants (Bloom and Van Reenan, 2010;Van Reenan, 2011, Swinney andBreach, 2017).…”