Abstract
Ireland's rate of growth and employment creation during the 1990s far outstripped economic performance in the rest of the OECD. Competing explanations are available in accounting for these outcomes, one stressing the primacy of the market, the other focusing on political choice. A case is made for the importance of politics, particularly the successful strategic adaptation to the challenges and opportunities afforded by the completion of the Single European Market during the 1990s. Ireland, as a small open economy, needs to combine effective external adjustment with appropriate domestic adjustment policies. Two policy areas are chosen for particular attention: industrial development strategy, and social partnership arrangements. This experience has implications beyond the Irish case, as the new central European and Baltic EU member states face similar challenges of policy adaptation.
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