Skip to main content

The story of a North Sea bubble: the strange demise of the Anglo-liberal growth model in the United Kingdom and Ireland

  • Colin Hay (a1) and Nicola Smith (a2)

In the wake of the deepest and longest recession that the United Kingdom has experienced since the 1930s and the Irish Republic has experienced since the 1980s, this paper examines the origins, sustenance, and puncturing of the growth dynamic both economies have enjoyed since the early 1990s. It identifies, in both cases, elements of an ‘Anglo-liberal growth model’. For as long as it lasted, this took the form of a consumer boom fuelled by growing private indebtedness (typically secured against property in a rising housing market) and was itself dependent on the nurturing and sustenance of a low inflation–low interest rate equilibrium. Of the two cases, it is the United Kingdom that presents the purer form of Anglo-liberal growth; in Ireland, a hybrid growth model can be seen to have developed in which Anglo-liberal growth was allied to a more conventional (and ultimately more sustainable) export-oriented growth dynamic. The paper seeks to gauge the character, paradigmatic significance, and effectiveness of the interventions made in the attempt to shore up the Anglo-liberal growth model and the rather different prospects for the resumption of growth in the years ahead. It argues that the Anglo-liberal growth model is, indeed, fatally flawed. In such a context, it is difficult to see how sustained economic growth can be restored, in the UK case, in the absence of a completely new growth model and, in the Irish case, without the cleansing of the long-standing export-oriented growth model of the Anglo-liberal trappings it has acquired in recent years.

Corresponding author
* E-mail:
Hide All
Blyth M. (2002), Great Transformations: Economic Ideas and Institutional Change in the 20th Century, Cambridge: Cambridge University Press.
Brunnermeier M.K. (2009), ‘Deciphering the liquidity and credit crunch 2007–2008’, Journal of Economic Perspectives 23(1): 77100.
Cameron D. (2010), ‘Our whole country is crying out for change’, Speech, 25 January 2010.
Case K.E., Quigley J.M.Shiller R.J. (2005), ‘Comparing wealth effects: the stock market versus the housing market’, Advances in Macroeconomics 5(1): 132.
Conservative Party (2010), A New Economic Model: 8 Benchmarks for Britain, London: Conservative Party.
Cowen B. (2007), ‘Financial Statement of the Minister for Finance, Mr Brian Cowen, T.D.’, 5 December 2007. Retrieved 15 July 2011 from
Cowen B. (2009), Dail Debate 674(1), 10 February 2009. Retrieved 21 August 2012 from
Cowen B. (2010), ‘Speech by Taoiseach Brian Cowen at the North Dublin Chamber of Commerce in Dublin City University’, 13 May 2010. Retrieved 15 July 2011 from
Crouch C. (2008), ‘What will follow the demise of privatised Keynesianism’, Political Quarterly 79(4): 476487.
Crouch C. (2009), ‘Privatised Keynesianism: an unacknowledged policy regime’, British Journal of Politics and International Relations 11(3): 382399.
Central Statistics Office (CSO) (2008), Construction and Housing in Ireland: 2008 Edition, Dublin: Ireland.
Central Statistics Office (CSO) (2011), ‘Annual percentage change in Consumer Price Index (%) by year and commodity group’. Retrieved 15 July 2011 from
Dymski G. (2012), ‘The reinvention of banking and the subprime crisis: on the origins of subprime loans, and how economists missed the crisis’, in M. Aalbers (ed.), Subprime Cities: The Political Economy of Mortgage Markets, Chichester: Wiley-Blackwell, 151184.
Fianna Fail (2010), ‘Issues’. Retrieved 15 July 2011 from
Fine Gael (2011), ‘Fine Gael Manifesto’. Retrieved 15 July 2011 from
Gamble A. (2009a), ‘British politics and the financial crisis’, British Politics 41(1): 450462.
Gamble A. (2009b), The Spectre at the Feast, Basingstoke: Palgrave.
Government for National Recovery (2011), ‘Statement of Common Purpose’. Retrieved 15 July 2011 from
Gramsci A. (1971), Selections from Prison Notebooks, London: Lawrence & Wishart.
Hall P.Soskice D. (eds) (2001), Varieties of Capitalism: The Institutional Foundations of Comparative Advantage, Oxford: Oxford University Press.
Hardiman N. (2010), ‘Bringing domestic institutions back into an understanding of Ireland's economic crisis’, Irish Studies in International Affairs 21: 7389.
Hay C. (2001), ‘The “Crisis” of Keynenianism and the rise of neoliberalism in Britain’, in J.L.Campbell, and O.K. Pedersen, (eds), The Rise of Neoliberalism and Institutional Analysis, Princeton: Princeton University Press.
Hay C. (2007), ‘What's in a name? New Labour's Putative Keynesianism’, British Journal of Political Science 37(1): 187192.
Hay C. (2009), ‘Good inflation, bad inflation: the housing boom, economic growth and the disaggregation of inflationary preferences in the UK and Ireland’, British Journal of Politics and International Relations 11(3): 461478.
Hay C. (forthcoming), ‘Treating the symptom not the condition: crisis definition, blame attribution and the search for a new British growth model’. British Journal of Politics and International Relations.
Hay C.Smith N. (2005), ‘Horses for courses: the political discourse of globalisation and European integration in the UK and Ireland’, West European Politics 28(1): 124158.
Hay C.Wincott D. (2012), The Political Economy of European Welfare Capitalism, Basingstoke: Palgrave Macmillan.
Hay C., Jo-Ann Smith N.Watson M. (2006), ‘Beyond prospective accountancy: reassessing the case for British membership of single European currency comparatively’, British Journal of Politics and International Relations 8(1): 101121.
Hay C., Riiheläinen J., Smith N.Watson M. (2008), ‘Ireland and EMU: the Outlier Inside’, in D. Kenneth (ed.), European States and the Euro, Oxford: Oxford University Press.
Irish Congress of Trade Unions (ICTU) (2009), Shifting the Burden: Why the Government Wants to Load the Cost of the Collapse onto the Less Well Off and Why Their Plan Will Just Make Things Worse, Dublin: Irish Congress of Trade Unions.
Irish Congress of Trade Unions (ICTU) (2010), ‘Budget 2011 shows no sense of “Common Good” ’, 7 December 2010. Retrieved 15 July 2011 from
Kenny E. (2011a), ‘Speech by the Taoiseach, Enda Kenny T.D., at HP's Liffey Park Technology Campus, Leixlip, Co. Kildare’, 25 May 2011. Retrieved 15 July 2011 from's_Speeches_20111/
Kenny E. (2011b), ‘Speech by the Taoiseach, Mr. Enda Kenny, T.D., at the opening of the conference “Delivering a National Youth Entrepreneurship Strategy” ’, Dublin Castle, 15 April 2011. Retrieved 15 July 2011 from's_Speeches_20111/
Kenny E. (2011c), ‘Speech on Nomination of Government’, 25 February 2011. Retrieved 15 July 2011 from's_Speeches_20111/
King M. (2010), ‘Finance: a return from risk’, Speech to the Worshipful Company of International Bankers, Mansion House, London, 17 March 2009.
King M. Speech, University of Exeter, 19 January 2010. Retrieved 21 August 2012 from
Kirby P. (2002), Celtic Tiger in Distress: Growth with Inequality in Ireland, Basingstoke: Palgrave. Retrieved 21 August 2012 from
Kirby P. (2010a), Celtic Tiger in Collapse: Explaining the Weaknesses of the Irish Model, Basingstoke: Palgrave.
Kirby P. (2010b), ‘When banks cannibalise a state: analysing Ireland's financial crisis’, Real Instituto Elcano ARI 178/2010.
Kirby S.Barrell R. (2009), ‘Prospects for the UK economy’, National Institute Economic Review 209: 4259.
Lenihan B. (2008), ‘Financial Statement of the Minister for Finance, Mr Brian Lenihan, T.D.’, 14 October 2008. Retrieved 15 July 2011 from
Lenihan B. (2010), ‘Financial Statement of the Minister for Finance, Mr Brian Lenihan, T.D.’, 7 December 2010. Retrieved 15 July 2011 from
Lucas R.E. (2003), ‘Macroeconomic priorities’, American Economic Review 93(1): 114.
Malzubris J. (2008), ‘Ireland's housing market: bubble trouble’, ECFIN Country Focus 5(9): 17.
Marsh D. (2009), ‘The future of politics’, British Politics 4: 117126.
Minford P. (2010), ‘The banking crisis: a rational interpretation’, Political Studies Review 8(1): 4054.
Norris M., Fahey T. (2009), ‘The changing meaning of social housing in Ireland: the changing meaning of social housing in Ireland’. UCD School of Applied Social Science Working Paper Series, University College Dublin, WPO9/05
Organization for Economic Co-operation and Development (OECD)(2001), OECD In Figures 2001, Paris: OECD.
Payne D., McCashin A. (2005), ‘Welfare state legitimacy: the Republic of Ireland in comparative perspective’. Geary Discussion Paper Series, Geary Institute, Geary WP 2005/10. Retrieved 21 August 2012 from
Prabhakar R. (2009), ‘Asset inequality and the crisis’, Renewal 17(4): 7580.
Schmidt V. (2002), ‘Does discourse matter in the politics of welfare adjustment?’, Comparative Political Studies 35(2): 168193.
Schmidt V. (2002), The Futures of European Capitalism, Oxford: Oxford University Press.
Schwartz H. (2008), ‘Housing, global finance and American hegemony: building conservative politics one brick at a time’, Comparative European Politics 6(3): 262284.
Schwartz H.Seabrooke L. (2008), ‘Varieties of residential capitalism in the international political economy: old welfare states and the new politics of housing’, Comparative European Politics 6(3): 237261.
Smith N. (2005), Showcasing Globalisation? The Political Economy of the Irish Republic, Manchester: Manchester University Press.
Smith N. (2006), ‘Mapping processes of policy change in contemporary European political economies: the Irish case’, British Journal of Politics and International Relations 8(4): 519538.
Sornette D., Woodward R.Zhan W-X. (2009), ‘The 2006–2008 oil bubble: evidence of speculation and prediction’, Physica A: Statistical Mechanics and its Application 388(8): 15711576.
Streeck W. (1997), ‘German capitalism: does it exist? Can it survive?’, New Political Economy 2(2): 237257.
Thain C. (2009), ‘A very peculiar British crisis? Institutions, ideas and policy responses to the credit crunch’, British Politics 4(4): 434449.
Thompson H. (2009), ‘The political origins of the financial crisis: the domestic and international politics of Fannie Mae and Freddie Mac’, Political Quarterly 80(1): 1724.
Tomlinson J. (2010), ‘Sick but not dying’, Political Studies Review 8(1): 6772.
Turner A. (2009), ‘The financial crisis and the future of financial regulation’, The Economist's Inaugural City Lecture, 21 January 2009.
Wainwright T. (2009), ‘Laying the foundations for a crisis: mapping the historico-geographical construction of residential mortgage backed securitisation in the UK’, International Journal of Urban and Regional Research 33(2): 372388.
Watson M. (2008), ‘Constituting monetary conservatives via the savings habit: new labour and the British housing market bubble’, Comparative European Politics 6(3): 285304.
Watson M. (2010), ‘House Price Keynesianism and the contradictions of the modern investor subject’, Housing Studies 25(3): 413426.
Widmaier W., Blyth M.Seabrooke L. (2007), ‘Exogenous shocks or endogenous constructions? The meanings of wars and crises’, International Studies Quarterly 51(4): 747759.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

European Political Science Review
  • ISSN: 1755-7739
  • EISSN: 1755-7747
  • URL: /core/journals/european-political-science-review
Please enter your name
Please enter a valid email address
Who would you like to send this to? *



Altmetric attention score

Full text views

Total number of HTML views: 1
Total number of PDF views: 20 *
Loading metrics...

Abstract views

Total abstract views: 158 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 25th November 2017. This data will be updated every 24 hours.