The Allure of False Competitiveness

February 4, 2011
Canadian-made games and the question of outsourcing

In the mid-1990s, the Irish government began enticing multinational corporations with offers of big tax cuts. Major tech companies including IBM, Google and HP took up the offer, which led to rapid economic growth and Ireland’s transformation into a “Celtic Tiger.” Over the course of a decade, the country went from one of Western Europe’s poorest economies to one of its wealthiest.

But critics warned that the incentives were creating a false competitiveness – that Ireland’s high-tech economy couldn’t really hack it if things got tough. To some extent, they were right.

2008–2011 Irish financial crisis

The costs of the bank rescues, NAMA and government deficits over the period look set to push Irish National Debt up to a ratio of 125% of GDP by 2015.