Peripherality and Northern Ireland

By Begg, Iain; Mayes, David | National Institute Economic Review, November 1994 | Go to article overview

Peripherality and Northern Ireland


Begg, Iain, Mayes, David, National Institute Economic Review


In writing recently about the economic problems that Northern Ireland faces (Begg and Mayes, 1994) we argued, uncontroversially, that an end to the 'Troubles' would significantly alter the region's prospects. Our analysis, nevertheless, focused on other factors which might be amenable to policy action. With an end to the Troubles in Northern Ireland now on the cards, these other characteristics of the Northern Ireland economy must be expected to be of increased importance in determining the Province's competitiveness compared with other parts of the UK and, indeed, other regions of the European Union. In particular, Northern Ireland is a prime example of a 'peripheral' economy, located as it is at the North-Western corner of the EU and facing the further barrier of a sea crossing to markets other than the Republic of Ireland. It is also a region that shares a number of the characteristics of the older industrial regions of Britain, such as high unemployment, persistent emigration of working-age population and difficulties in achieving industrial restructuring (Harris et al., 1990; Harris 1991).

Northern Ireland, however, differs from the declining industrial areas of Northern England and Scotland in one key respect. This is that its high unemployment is the result not so much of job losses as the high 'natural' growth of the working population. In both the 1970s and the 1980s, employment grew in the Province, in contrast to Northern England which lost jobs. Only Wales amongst the regions traditionally classified as 'assisted' in the UK had a better employment record than the Province in the last decade (Cambridge Econometrics, 1994). The growth in employment in Northern Ireland has, of course, been largely the result of massive public spending associated both with security and with programmes to enhance services. In so far as it can be identified by territory (defence spending, for example, cannot be), public expenditure in Northern Ireland per capita has been around 50 per cent above the UK average (Heald, 1990).

Although the Northern Ireland economy has been extensively analysed, there has been a temptation to ascribe its difficulties largely to the twin effects of the Troubles and of the Province's remote location, both of which have, hitherto, been viewed as essentially unalterable by economic policy. If the Troubles are genuinely over, the first of these overarching obstacles to progress disappears. Our purpose in this note is to question the conventional view that Northern Ireland's peripheral location is as profound a barrier as is so often assumed. In attempting to answer this, we assess how peripherality interacts with other determinants of Northern Ireland's competitive position. Understanding how peripherality affects a regional economy is a key first step in formulating a policy response. Our analysis suggests that there is little scope for improving the Province's competitive position by further action to improve transport infrastructure or services, and we conclude that in terms of operating costs, Northern Ireland is penalised in some respects, but benefits in others. However, a wider view of the economic impact of peripherality points to different sorts of problems to be overcome, many of which could be affected by policy changes. We consequently explore the scope for public and private sector responses in the Province, the UK and the EU within the framework of current policy and the market economy.

The next section of the note provides an overview of approaches to the measurement and appreciation of peripherality and presents an alternative. We then provide an assessment of how its relatively remote location affects Northern Ireland and highlight the facets of this which seem most pertinent. The concluding section explores the policy implications of these findings.

Assessing the significance of peripherality

Peripherality is an ill-defined word, although its obvious geographical definition is in terms of remoteness from the centre of an economic system. …

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