Ireland: Celtic Tiger in Austerity—Explaining Irish Path Dependency

Abstract

Previous Irish crises have proved to be path shaping. The paper argues many features of Irish policy responses to crisis including low taxation, user charges, privatisation, deregulation and more conditional welfare are consistent and at times intensify the liberal deregulated low tax model that characterised the pre-crisis Celtic Tiger model. It makes the case that the differential impacts on Irish citizens were significant enough in scale and impact to occasion a critical juncture and significant shifts in political cleavage or a double movement and asks why there has been no path shaping critical juncture. This article explores why Irish path dependence is so strong in this crisis and utilises Hay's (2004) analytical framework and a mixed method approach to explain the gradient and orientation of change as an outcome of the relationship between institutions, interests and ideas. It concludes an elite political coalition reshaped institutions and sustained a strong narrative to maintain path dependency.