Should the fiscal powers of the Northern Ireland Assembly be enhanced?

Abstract

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.

US Corporate Tax Rate Cuts: Spillovers to the Irish Economy

“…Regardless of the overall economic calculus political parties in Northern Ireland, covering a range of views on the constitutional positon, have backed these proposals. The potential concentrated benefits to business, particularly when combined with the potentially much more diffused costs of those who would suffer from the reductions in public expenditure, helps explain the commercial as well as political popularity of reducing corporate taxation in Northern Ireland relative to Britain (Birnie and Brownlow, 2016). Daragh Clancy's emphasis on circumstances is one with clear resonance for anybody thinking about the complexities involved in Northern Ireland deviating from British corporate tax levels.…”

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

“…Advocates of this policy take the distinctly non‐Hayekian line that such tax reduction could act as a ‘silver bullet’ to rectify NI's economic weaknesses. The intellectual merits or otherwise of this proposal could justify a paper in their own right and indeed have already been much debated by academic, business and policy economists (PriceWaterhouseCoopers ; Budd ; Birnie and Brownlow ). But rather than arguing over the credibility of the claim that lower taxation in isolation could create a step improvement in the NI economy, it should be noted that it does not seem politically likely.…”

“…Yet regardless of whatever political situation emerges, it would be our contention that any genuine attempt at improving regional economic performance should draw on the insights provided here. For more information on the costs and benefits of decentralising taxation in the Northern Irish case see (Budd ; Birnie and Brownlow ). For a discussion of the institutional economics applied to the devolution project in Scotland, Wales and Northern Ireland, see Brownlow ().…”

A critical review of competitiveness measurement in Northern Ireland

“…For example, the UK government's White Paper on industrial strategy in November 2017 and the Northern Ireland draft Industrial Strategy published in January 2017. All this reflects a longstanding perception in Northern Ireland, and in the UK in general, that competitiveness remains a fundamental challenge, which must be resolved in order to deliver performance improvements ( DTI, 2004;HM Treasury, 2004;Birnie & Brownlow, 2017).…”