In this blog and its associated NERI Report Series No. 37, NERI Co-director Paul Mac Flynn seeks to start the debate on how we define success in economic policymaking in Northern Ireland.
It would not be unfair to say that Northern Ireland has an economy that has never really lived up to expectations. It is consistently ranked as one of the lowest performing regions of the UK and trails the Republic of Ireland by a considerable distance. This performance was brought to light in the recent debates about Northern Ireland’s constitutional future. In evaluating the prospect of a united Ireland, many point to this gap in performance as an insurmountable barrier to integration while others see it as a measure of the potential gains from a unified economy. Many argue that it is the status quo that has brought about this underperformance, while others argue that constitutional change will only degrade the situation further.
All of these opinions are valid. However, what they all have in common is a desire to see Northern Ireland’s economic performance improve. Whether the goal is the status quo or constitutional change, raising the game for Northern Ireland’s economy is a necessary and immediate task.
While there has been much work detailing how the failings of policy and the legacy of the past have brought us to our present circumstances, there has perhaps been less commentary about where exactly we want policy to take us in the future. We all want Northern Ireland’s economy to be successful, so what might that success look like?
A new NERI report seeks to begin that debate by looking at the comparative performance of productivity between Northern Ireland, the Republic of Ireland and the UK. Looking at the overall gap in performance, but also looking at the sectoral level allows us to see more accurately what the scale of the task will be. Delving down to the sectoral level also allows us to look at issues of structure and what the economy produces along with how it produces it.
Seeing the gaps in productivity levels North-South and East-West reveals the scale of the task at hand. But in which direction should Northern Ireland look for transformation? The answer is not as obvious as the figures would suggest. While the Republic is clearly the best performing economy, many elements of its performance are simply not realistically replicable in an NI context. Seeking to match many of the Republic’s policies such as low corporation tax may simply not be feasible or fruitful in the current global economic climate. But equally, the UK has been one of the worst productivity performers of the G7 and hardly a candidate emulation.
The answer may be to seek the best of both worlds. As with the post-Brexit trade arrangements, Northern Ireland should seek to take advantage of convergence possibilities with both economies. In some sectors, there should be no barrier to Northern Ireland converging with the Republic, but in others it may be more realistic to aim for UK levels of productivity. Structural changes also matter and how we apportion resources within our economy will also be key to success.
The report seeks to start the debate on how we define success in economic policymaking in Northern Ireland. Yes, the scale of the task may still be considerable, but there needs to be a long-term plan to lift Northern Ireland’s performance. Targets can seed motivation and also allow proper evaluation of success. If Northern Ireland is to be a successful economy, we need to be more specific and realistic about what the success looks like.