Analysis of investment decisions in Irish state infrastructure

Abstract

Ireland was the envy of Europe and indeed the world with its apparent economic success, during what was termed the ‘Celtic tiger’ years. Nevertheless, it is now evident that despite the considerable monies invested in physical infrastructure, Ireland still ranks poorly in its state of infrastructure internationally. This paper identifies that government investment in physical infrastructure was clearly stimulated and influenced by the housing boom that Ireland experienced in the period 2000–2008. The physical infrastructural networks analysed in this paper are the water, wastewater and roads networks, as these are entirely funded by government/public monies. This paper uses correlation analysis to investigate the relationship between investment (2003–2009) and a range of determinants, and draws a number of conclusions: water and wastewater and to a lesser extent roads capital investment was driven by the house construction industry, which in turn lacked monitoring of housing numbers and their spatial distribution; and government tax incentives further fuelled the housing industry and thus infrastructure investment. The evidence in this paper clearly identifies the need for a comprehensive and holistic planning framework at national and regional level to ensure that future investment in Ireland's infrastructural networks contributes to Ireland's recovery and growth.