Good Friday Agreement: Has Northern Ireland seen a peace dividend?

The number of people employed in clothes manufacturing has fallen over the last 25 years

On the eve of the Good Friday Agreement in 1998 14,000 people worked in clothes manufacturing in Northern Ireland.

The most recent comparable figures, covering the third quarter of 2022, showed that workforce had dwindled to less than 1,000.

The number of people employed in "computer programming and consultancy" jumped from 3,000 to almost 16,000.

Those numbers help illustrate the changes in the Northern Ireland economy in the last 25 years.

But that transformation is not unique: the decline of manufacturing, the rise of services, the impact of digital technology and the growth of China have reshaped western economies.

So how much do we know about how the peace, which was cemented by the Good Friday Agreement, has helped transform the Northern Ireland economy?

'Disappointingly small'

Three economic historians at Queen's University, Graham Brownlow, David Jordan and John Turner, have analysed the evidence in an attempt to quantify the "peace dividend".

They conclude that the dividend exists, but that it is disappointingly small.

They define a peace dividend as the economic boost a nation or region receives with the ending of a conflict.

The clearest evidence they find of this dividend in Northern Ireland is in the jobs market.

The QUB study found Northern Ireland's service economy has grown in the last 25 years

High unemployment was a persistent feature of the Northern Ireland economy during the Troubles.

But the academics found that since 1998 Northern Ireland has experienced the strongest employment growth of any region outside London, with the total number of people employed up by almost 23%.

Growth was particularly healthy in higher value services: between 1998 and 2022, employment in financial and insurance activities grew 36%, higher than in any other UK region.

The unemployment rate in Northern Ireland also fell rapidly in the years after the agreement and remains lower than in Scotland, Wales or the north east of England.

However, the unemployment performance may be flattered by Northern Ireland's persistently high rate of economic inactivity - a measurement of people who are not in work and not looking for work.

The service economy, including retail, now makes up a bigger proportion of the NI economy

The real improvements in the jobs market have not however done much to improve Northern Ireland's productivity.

Stagnant productivity

Productivity measures the amount of economic output generated by each worker.

In the long-term, rising living standards are dependent on rising productivity.

In 1998, Northern Ireland's economic output per person was 20% lower than the overall UK level, though it was higher than in either Wales or the north east of England.

Fast forward to 2020 and the picture was basically unchanged: Northern Ireland was still about a fifth less productive than the UK average, but still a bit better than Wales or north east England.

The academics say this illustrates how "distortions that emerge in response to a crisis such as the Troubles are not fully reversible, even once the crisis ends.

"Just as the sectarian enmities that helped to sustain violence during the Troubles did not just disappear in 1998, so the economic scars caused by political violence have not fully healed since the signing of the Good Friday Agreement."