Doctoral dissertation, PhD Public Policy, University College Dublin
Irish social partnership was the result of a historically contingent political strategy to
navigate the integration of a small open economy into a globalized market, in which
being able to attract and retain volatile capital was paramount. The main architect
behind this strategy was the state, and the primary objective was industrial stability.
At a critical juncture in 1987 the Irish government chose to adopt a labour inclusive
strategy of adjustment to a fiscal crisis, the opposite of what occurred in the UK.
This choice resonated with the ideational toolbox of the leading political party in
power, Fianna Fáil. Given external constraints, and institutional legacies, the terms
had to be such that no beneficial constraints were going to be imposed on business.
Unlike other small open European countries no legal-statutory changes were introduced
to institutionalise the countervailing power of trade unions.
Social partnership was premised on a privatized political exchange in which wage
moderation was compensated with increases in private consumption through tax reductions.
It was not premised on the social democratic bargain of increasing public
consumption and redistribution that occurred in classic Scandinavian corporatism.
The author drives us through the various stages of social partnership pre and post
EMU, from its origins as crisis management and economic development, to a subsequent
phase in which government used the spoils of economic growth to buy off
social dissent, to its eventual collapse in response to the Eurozone crisis. The book
takes a strong stance against economistic accounts of institutional change in which
actors pursue rational strategies and come up with optimal institutional designs.
Drawing upon theories of institutional change in comparative political economy,
it argues that economic institutions are premised on volatile political coalitions,
and the main determinants of outcomes are the power resources controlled by the
various actors. It is these domestic institutional resources that condition how national
actors respond to the adjustment constraints of global market capitalism.