The economic implications of peace in Ireland

Abstract

In our paper, we will first set the scene for the post cease-fire economic possibilities by briefly examining what we refer to as the "lost" years since the start of open conflict in the North in 1969. Although economists of nationalist and unionist hues are likely to interpret the historical North-South socio-economic record with differing degrees of emphasis, nevertheless the facts tend to speak for themselves in a relatively uncontroversial way and point generally to the desirability of more imaginative policy experimentation in both parts of Ireland. We then attempt to address more controversial matters and explore three interrelated possible post cease-fire scenarios of peace, that differ in their assumptions concerning North-South economic policy interactions and North-South institutions. The first is the case of peaceful but separate development, or the economic status quo ante. The second is the case of North-South co-ordinated development, where limited forms of political/economic co-operation are put in place. Finally, we attempt to conceptualise the case of a single island economy, borrowing and re-defining a term used in a more restricted context by Sir George Quigley in his address to the CII in 1992 (Quigley, 1992) and elsewhere (Quigley, 1993). For each scenario we try to explore the implications for a range of important issues, such as public finance/expenditure, transitional aid, investment and employment, and island synergies. We conclude with a more speculative view on likely economic developments on this island.