Debating Austerity in Ireland: Crisis, Experience and Recovery

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Debating Austerity in Ireland: Crisis, Experience and Recovery Debating austerity Debating austerity: Debating austerity: The austerity crisis, experience in Ireland: that followed the recent economic and financial crisis in and recovery Ireland led to impassioned debates crisis, across the social sciences and among the public at large. The depth of the interacting economic, banking and budgetary crises experience sparked intense public interest and polarised opinion. Debating austerity brings together and recovery leading national and international experts from across the social sciences, and challenges us to adopt a more nuanced Edited by Emma Heffernan, approach to understandings of austerity and paths John McHale and to recovery. Niamh Moore-Cherry “A timely contribution to a Niamh Moore-Cherry John McHale and Emma Heffernan, Edited by national debate that will continue to define public policy discussion in Ireland for years to come” PATRICK HONOHAN, former governor of the Bank of Ireland www.ria.ie ISBN: 978-1-908997-68-5 9 7 8 1 9 0 8 9 9 7 6 8 5 COVER TO PRINT.indd 1 7/26/2017 11:36:59 AM Debating austerity in Ireland: crisis, experience and recovery TEXT TO PRINT.indd 1 8/10/2017 10:48:09 AM TEXT TO PRINT.indd 2 8/10/2017 10:48:09 AM Debating austerity in Ireland: crisis, experience and recovery EDITORS Emma Heffernan, John McHale and Niamh Moore-Cherry TEXT TO PRINT.indd 3 8/10/2017 10:48:09 AM Debating austerity in Ireland: crisis, experience and recovery First published in 2017 by Royal Irish Academy 19 Dawson Street, Dublin 2, Ireland www.ria.ie Copyright © Royal Irish Academy 2017 The authors have asserted their moral rights. ISBN 978-1-908997-68-5 (PB) ISBN 978-1-908997-69-2 (pdf) ISBN 978-1-908997-70-8 (epub) ISBN 978-1-908997-71-5 (mobi) All rights reserved. The material in this publication is protected by copyright law. Except as may be permitted by law, no part of the material may be reproduced (including by storage in a retrieval system) or transmitted in any form or by any means; adapted; rented or lent without the written permission of the copyright owners. British Library Cataloguing in Publication Data. A CIP catalogue record for this book is available from the British Library. Printed in Ireland by Sprint-PRINT 10 9 8 7 6 5 4 3 2 1 Sponsors: TEXT TO PRINT.indd 4 8/10/2017 10:48:11 AM Contents List of figures vii List of tables viii About the authors ix Foreword Patrick Honohan xi Introduction Austerity in Ireland: a debate Niamh Moore-Cherry, John McHale and Emma Heffernan 1 Part 1: Austerity as concept and practice 1. A general theory of austerity Simon Wren-Lewis 17 2. Why austerity? John McHale 37 3. The ideological project of austerity experts Kieran Allen 53 4. Irish media coverage of the housing bubble and austerity Julien Mercille 67 Part 2: Experiencing austerity 5. Austerity in the European periphery: the Irish experience Niamh Hardiman, Spyros Blavoukos, Sebastian Dellepiane Avellaneda and George Pagoulatos 83 6. Austerity and inequality in Ireland Christopher T. Whelan and Brian Nolan 100 7. Austerity, resistance and social protest in Ireland: movement outcomes Niamh Hourigan 115 TEXT TO PRINT.indd 5 8/10/2017 10:48:11 AM 8. Housing and austerity: a two-way street Ronan Lyons 129 9. Poverty and risk: the impact of austerity on vulnerable females in Dublin’s inner city Emma Heffernan 144 10. Child poverty in a period of austerity Dorothy Watson, Bertrand Maître, Christopher T. Whelan and James Williams 157 11. Resilience: a high price for survival? The impact of austerity on Irish higher education, South and North Rosalind Pritchard and Maria Slowey 175 12. Migration patterns, experiences and consequences in an age of austerity Mary Gilmartin 191 13. The austerity myth: parenting and the new thrift culture in contemporary Ireland Fiona Murphy 204 Part 3: Beyond austerity? From crisis to recovery 14. Ireland’s recovery: explanation, potential and pitfalls Seán Ó Riain 219 15. Resources available for public services: how does Ireland compare now and how to prepare for the future? Seamus Coffey 235 16. Towards an inclusive and just recovery Seán Healy 255 Conclusion: progressing debates on austerity in Ireland John McHale, Niamh Moore-Cherry and Emma Heffernan 270 Appendices 281 Bibliography 310 Index 334 TEXT TO PRINT.indd 6 8/10/2017 10:48:11 AM List of figures 2.1 Growth in general government expenditure revenue, consumer prices, gross domestic product, and general government revenue, 2002 to 2007 2.2 Annual changes in Exchequer revenue by category 2.3 Actual and underlying general government deficit, % of GDP 2.5 Evolution of the debt-to-GDP ratio, % of GDP 2.6 Evolution of real social protection and non-social protection expenditure, billions of euro 2.7 Evolution of Irish and German 10-year bond yields, monthly averages 2.8 Evolution of the primary and total deficit, % of GDP 3.1 Investment and return on equity 4.1 Number of Irish Times articles on the housing bubble published by year, 1996–2011 5.1 Competitiveness index 5.2 Asymmetrical macroeconomic adjustment in trade relations 5.3 Scale of fiscal retrenchment, 2009–2012 5.4 Total unemployment rate 5.5 Real effective exchange rates 6.1 Poverty indicators through the crisis 6.2 Decile shares of equivalised disposable income among persons, 2007 to 2013 6.3 Mean stress by country, welfare regime and year of survey 6.4 Changing income class effects on economic stress between 2008 and 2012 8.1 Projected nominal GDP (billions of euro) 2004–2020, from IMF World Economic Outlook reports 2007–2015 8.2 Revenues from stamp duty, VAT, and income tax, 2000 to 2014 8.3 The total level of government spending (left-hand scale) and the fraction of government spending and of GDP spent on housing (right-hand scale),1995–2015 8.4 Capital spending, 1983–2013 10.1 Timing of the GUI surveys (see text for details) 10.2 Trends in material deprivation (see text for details) 10.3 Change in the economic vulnerability level of families between the first and second waves of the GUI surveys 10.4 Economic vulnerability groups. 10.5 Adjusted risk of socio-emotional problems by economic vulnerability 11.1 Core (state) income for higher education by total student numbers (Republic of Ireland: 2007/8–2015/16) 11.2 Recurrent grant to universities in Northern Ireland 2007/8 to 2015/2016 14.1 Capital Investment in Ireland, 1995–2014 (current prices) 14.2 R&D staff employed by Irish and foreign firms 15.1 Health, education and social welfare 16.1 Total revenue and total expenditure as a percentage of GDP, 2005–21.* vii TEXT TO PRINT.indd 7 8/10/2017 10:48:11 AM List of tables 3.1 Government deficit and debt-to-GDP ratio: Germany and Ireland 3.2 Percentage of tax revenue Ireland 2008–14 from capital and labour 3.3 Net value added at factor cost and net national income at market prices: domestic trading profits and wage and salaries 2008–13 (€ million) 10.1 Relative risk ratios for potentially problematic SDQ by characteristics of child and family 11.1 Irish universities: Times Higher Education World University Rankings 2015 12.1 Migration flows to and from Ireland, 1996–2016 (‘000s) 12.2 Immigration to and emigration from Ireland by nationality, 2007–16 (‘000s) 14.1 Fiscal balance, social contracts and production regimes in Europe 14.2 Persons in employment, 2008–15 (000s, Quarter 3, seasonally adjusted) 15.1 The business economy in Ireland, annual averages 2008–12 15.2 Contribution of US-controlled enterprises to the business economy in EU countries, 2008–12 15.3 Distribution of US companies’ profits, employment and investment in the EU, 2008–12 15.4 Adjusted general government expenditure, % national income 16.1 Five policy areas to deliver a just and sustainable society. viii TEXT TO PRINT.indd 8 8/10/2017 10:48:11 AM About the authors Kieran Allen is a senior lecturer in the School of Sociology in University College Dublin (UCD). He is the author of a number of books on Irish society and its economy. These include Austerity Ireland: The Failure of Irish Capitalism (2013), The Irish Economic Crash (2009) and The Corporate Takeover of Ireland(2007). He advocates radical change and is the author of Marx and the Alternative to Capitalism (2011). His latest publication is 1916: Ireland’s Revolutionary Tradition. Spyros Blavoukos (PhD, Essex) is an assistant professor at Athens University of Economics and Business. His research focuses on the structural features of the international and European political economy system and the international interactions of the EU, espe- cially with other International Organizations. He has published in Review of International Studies, West European Politics, Cooperation and Conflict, Journal of Common Market Studies, European Journal of Political Research, Journal of Public Policy and European Union Politics. Seamus Coffey is a lecturer in economics in University College Cork (UCC). His teaching includes microeconomics, government and busi- ness, advanced microeconomics and econometrics as well as on UCC’s MBA programme. His research and writing focuses on the perfor- mance of the Irish economy. He is a sometime contributor to print, broadcast and online media relating to the Irish economy, including fiscal outcomes, taxation, debt, national accounts and other issues. Sebastian Dellepiane-Avellaneda (PhD, Essex) is a senior lecturer in the School of Government and Public Policy at the University of Strathclyde. He studied economics and political science in Buenos Aires, Argentina. He has held research positions in several European universities, including Essex, Antwerp and University College Dublin.
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