The State, Economy and Public Policy
The State, Economy and Public Policy connects political authority to economic outcomes. It tests whether you can define the state, explain its economic roles, and analyse a policy cycle using Irish and EU evidence.
Core rules and concepts
- The state has four elements: territory, population, government and sovereignty. It is distinct from the government of the day and from the nation.
- Roles of the state: provider (health, education), regulator (competition, environment), employer, redistributor (tax and welfare), and economic manager (fiscal policy - though Ireland's monetary policy is set by the ECB).
- Keynesianism favours demand management and public spending in downturns; neoliberalism favours markets, deregulation, privatisation and lower taxes.
- Policy cycle: agenda setting, formulation, implementation, evaluation.
- Taxation: progressive (rates rise with income), proportional, regressive (VAT hits lower incomes proportionally harder).
- Irish specifics: 12.5% corporation tax, FDI-led growth, social partnership (1987–2009), post-2008 austerity and the Troika programme, the National Development Plan, and EU fiscal rules.
Worked example
The government raises carbon tax and recycles revenue into fuel allowance. Evaluate: ecological effectiveness depends on price elasticity and alternatives; distributive justice depends on whether transfers offset costs for low-income and rural households; administrative feasibility depends on collection and enforcement. Link each criterion to a state role - regulator, redistributor, manager.
Traps
- Equating the state with the government.
- Assuming all taxation is progressive.
- Ignoring EU and ECB constraints on Irish policy.
- Describing a policy without evaluating outcomes.