A presentation of a paper about Irish model of Industrial Relations at the IIPPE2014 conference in Naples.

1. A Faustian Pact with neoliberalism?
The rise and the fall of social pacts in the
Republic of Ireland
Vincenzo Maccarrone & Roland Erne

2. Neoliberalism or what?
Which kind of social model characterized the
development and the fall of the “Celtic Tiger”?
It is correct to talk about a neoliberal turn in the
Republic of Ireland even if it had a model of
industrial relation with centralized bargaining?

3. Irish neoliberalism
Beginning: 1989, with the government of the
coalition of Fianna Fail and Progressive Democrats
(PD)
The coalition enacts severe austerity measures to
reduce the public debt, which had risen in the 70s-
80s.
lIn the following 25 years there is a neoliberal turn

4. Irish neoliberalism (2)
Privatisation of public enterprises (ambiguous
results and a clear fail in case of Eircom) (Sweeney,
2005)
A tax system which favourites the elites (Hardiman,
2002b; Allen, 2007)
Deregulation of financial markets (McDonough and
Dundon, 2010)
Results? Rise in inequality (McDonough e Loughrey,
2009; Kirby e Murphy, 2011).

5. Irish Neoliberalism?
A big theoretical issue if you want to insert Ireland
in the neoliberal framework: its model of labour
relations, the s.c. “social partnership”
Starting from 1987, there have been seven pacts
between State, Trade Unions and Firms
A clear contrast with the “classic” neoliberal model
of labour relations!

6. Irish Social Partnership
The roots of Irish SP can be found far back in time,
starting from the 50s until the 70s
Yet, in the 80s Ireland was back to a decentralized
wage setting system
In the meanwhile, there was a severe economic
crisis.
The first agreement-the “Programme for national
recovery” (1987), born in these conditions.

7. Irish Social Partnership (2)
The 3 main actors had good reasons to implement the pacts
The government driven by the Fianna Fail needed to enact
austerity policies in a difficult macroeconomic situation and
at the same time was concerned with avouding a clash with
trade unions.
Trade unions were weakened by the decentralized wage
system and by the fall of unionization + fear of Thatcherism
due to rising consensus towards PD
Firms were concerned with the macroeconomic situation
and wanted to link the agreement of wage moderation with
the reforms they wanted

8. Irish Social Partnership (3)
Features of PNR: 3-years agreement.
Wages could not rise more than 2.5% in each year of the
interval 1988-1990 (special clause for low salaries to)
In exchange the government offered a tax cut for 225
millions of Irish pounds for the 3 years covered by the
agreement.
At the same time of the agreement, the government
reduced public spending for 900 millions of pounds (cfr
Von Prondzynski [1998] on the reduced capacity of
opposition of trade unions to these cuts after joining the SP
agreement).

9. Irish Social Partnership (4)
From 1987 onwards seven SP agreement
-First pacts more concerned with reacting to an economic crises
- the followings took into consideration new problems, eg the
management of the growth process or the satisfaction of the
criteria to enter in the EMU (Roche, 2007; O'Connor, 2011).

10. Irish Social Partnership (5)
The systems of IR during the era of SP was,
according to McDonough e Dundon (2010) and Von
Prondzynski (1998):
 Voluntarist
 Antagonist
 Centralized and institutionalized
 Collectivist

11. Irish Social Partnership (6)
The system of SP resisted for more than 20 years,
against the expectations of many commentators.
Yet, it entered in a serious crisis during the current
economic disaster (due to the unilateral decision of
the government on cuts- especially to wages of
public sector)
The failure of “Croke Park 1” and “Croke Park 2”
agreements

12. Different views on Social Partnership
Teague&Donaghey (2009): SP as one of the
“institutional complementarities” that triggered the
economic growth of Celtic Tiger.
Allen (2000; 2003), O'Hearn (2003) and
McDonough&Dundon (2010): SP as “disguised
neoliberalism” or “thatcherism delayed”.
Roche e Cradden (2003), Hardiman (2002a), Erne
(2010, 2011a): SP as “competitive corporativism”->
we support this view

13. Irish competitive neocorporativism

14. Irish Neoliberalism&SP: pragmatic
neoliberalism?
Does this last argument flaw the hypothesis of a
neoliberal turn in Ireland?
The answer is no!
1) the context (historical, institutional, social)
matters! (see also O' Riain, 2014)
2) (Harvey, 2005): tension between theory and
praxis in neoliberalism
Neoliberalism as a class move

15. Pragmatic neoliberalism
Wage quote diminished well below the Eu average
(54.34 against an EU average of 67.3), while in the
80s it was closer (71.2 against an EU average of
71.8).
Striking was made harder by the Industrial relation
act (1990)+ Ireland does not have yet a mandatory
legal process through which a trade union can
obtain recognition from the employer.

16. Pragmatic neoliberalism (2)

17. Pragmatic neoliberalism
So why should capitalists complain at all?

18. Further developments
What about the crisis? Path dependence of
neoliberal policies (Murphy, 2014)
From “let's accept a smaller share of the cake in
order to get a bigger cake” to “let's accept a smaller
slice of a shrinking cake” (Erne, 2013).

19. Thanks for you attention!

20. Bibliography
Allen, K.; (2000), The Celtic Tiger: The Myth of Social Partnership. Manchester:
Manchester University Press.
Allen, K. (2003), Neither Boston or Berlin: Class Polarisation and Neo-Liberalism in
the Irish Republic in C. Coulter and S. Coleman (a cura di), The End of Irish History:
Critical Reflections on the Celtic Tiger, Manchester, Manchester University Press, pp.
56-73.
Allen, K. (2007), The Corporate Takeover of Ireland, Dublin, Irish Academic Press.
Dumenil, G. e Levy, D. (2004), Capital Resurgent, Cambridge, MA., Harvard University
Press.
Erne, R. (2010), European Unions: Labour's Quest for a Transnational Democracy,
Ithaca, NY., Cornell University Press.
Erne, R. (2011a), Interest Association in Caramani, D. (a cura di), Comparative Politics,
2nd edition. Oxford, Oxford University Press. pp. 259-274.

21. Bibliography(2)
Erne, R. (2013), Let’s accept a smaller slice of a shrinking cake. The Irish Congress of
Trade Unions and Irish public sector unions in crisis. in Transfer: European Review of
Labour and Research, August, 19 (3).
Hardiman, N. (2002a), From Conflict to Co-ordination: Economic Governance and
Political Innovation in Ireland, in West European Politics, 25(4), pp. 1-24.
Hardiman, N. (2002b), The Development of the Irish Tax State, in Irish Political Studies,
17(1), pp. 29-58.
Harvey, D. (2005), A Brief History of Neoliberalism, Oxford, Oxford University Press.
Kirby, P. e Murphy M. P. (2011), Towards a Second Republic. Irish Politcs after the
Celtic Tiger, London, Pluto Press.
McDonough, T. e T. Dundon (2010), Thatcherism Delayed? The Irish Crisis and the
Paradox of Social Partnership, in Industrial Relations Journal, 41 (6), pp. 544-562.
McDonough, T. e Loughrey J. (2009), The H.E.A.P Chart: Hierarchy of Earnings,
Attributes and Privilege Analysis, Dublin, Tasc.

22. Bibliography(3)
Murphy, M. (2014): Ireland: Celtic Tiger in Austerity—Explaining Irish Path
Dependency, Journal of Contemporary European Studies, 22:2, 132-142, DOI:
O'Connor, E. (2011), A Labour History of Ireland: 1824-2000, Dublin, UCD Press.
O’Hearn, D. (2003), Macroeconomic Policy in the Celtic Tiger, in Coulter, C. and
Coleman, S. (a cura di), The End of Irish History: Critical Reflections on the Celtic
Tiger, Manchester: Manchester University Press, pp. 34-55.
Ó Riain, S. (2014) 'The Rise and Fall of Ireland's Celtic Tiger: Liberalism, Boom and
Bust'. Cambridge University Press.
Roche, W. K. e Cradden, T. (2003), Neocorporatism and social partnership, in Adshead,
M. e Millar, M. (a cura di), Public Administration and Public Policy in Ireland, London,
Routledge, pp. 69-87.
Teague, P. e Donaghey , J. (2009), Why has Irish social partnership Survived?, in British
Journal of Industrial Relations, 47(1), pp. 55-78 .
Von Prondzynski, F. (1998), Ireland: Corporatism Revived, in Ferner, A. e Hyman, R. (a
cura di), Changing Industrial Relations in Europe, Oxford, Blackwell, pp. 55-73.