"The drb sustains a level of commentary on Irish and international matters that no other journal in Ireland and few elsewhere can reach. It deserves all the support that can be given it." X
Space to Think, a new book celebrating ten years of the Dublin Review of Books More Information 

Small State, Big World

John Bradley

Late last year, as I was returning from a business trip to Warsaw, the LOT flight was full of young and not so young Poles. I was one of the few native Irish passengers. As the plane touched down, there was a spontaneous outburst of applause. Exiting from the baggage claim area, there were crowds of Poles waiting to greet their compatriots. These were no holidaymakers. Rather, they came in quest of jobs that would give them a higher standard of living than is possible at this time in their homeland. It put me in mind of what Ellis Island must have been like in the early twentieth century – albeit a less traumatic version – when European migrants flooded into the United States. It was Ireland’s time in the sun, and our turn to welcome economic migrants seeking better life chances. We were now a land of opportunity.

If anyone had told me in the depths of the mid-1980s recession that within twenty years the Iron Curtain would be history, Ireland would have full employment, our economy would be the envy of the formerly communist new EU member states, whose liberated citizens would be flooding in to take up jobs, and that I would be advising the Polish and other governments in those states on the use of EU structural funds, I would have thought they were crazy. But all that and more has come to pass.

A huge literature has grown up around what has come to be known as the Celtic Tiger phenomenon, i.e. the period of rapid growth, manifested mainly during the 1990s, when Ireland finally caught up with average EU living standards as measured by income per head. These accounts are mainly economic in their focus, but also embrace social and equity aspects. They can be characterised as coming from the moderate left (for example, O’Hearn, 1998; O’Toole, 2003; Sweeney, 1998); from the moderate right (Clinch, Convery and Walsh, 2002), and from the pragmatic centre (MacSharry and White, 2000; Nolan, O’Connell and Whelan [eds], 2000).

I am uncomfortable with Celtic Tigerdom, with its narrow and derivative terminology, and was embarrassed when an essay I wrote about the economic links between Ireland and Northern Ireland was published in book form with the editor-imposed title Can the Celtic Tiger Cross the Border? (Pollak (ed), 2001). But for better or worse we are stuck with this shorthand for a remarkable period in Irish economic experience. What really matters is that we explore and try to understand the causes and consequences of our recent economic progress, and that we do so in a way that acknowledges the wider historical and geographical context as well as narrow economic and political factors.

Imagination is a much less potent force in economics than it is in literature. Indeed, the very value system built into economics is extraordinarily narrow, crude and pragmatic. Economists work with very circumscribed visions and models of human behaviour, usually based on utilitarian rational choice theory. Most academic economists work with models of a highly abstract kind, where the complexities and mysteries of individual behaviour are subsumed into highly stylised simplifications. Firms use labour and other inputs to produce goods and services; individuals exist only to supply labour, enjoy leisure and consume. Not much else matters. Modern economic theories leave little room for personal insights. They claim to have universal application, even if they are incomplete in detail. Politicians, policy-makers and economists, when they go about their work, seldom come to problems with fresh minds, informed by their own experience. In the colourful words of John Maynard Keynes, at the conclusion of his 1936 path-breaking General Theory of Employment:

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is greatly exaggerated compared with the gradual encroachment of ideas … But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

The great debates in economics are about these systems of thought, and not just about the facts of experience. In the hurly-burly of daily life, one can live with a certain lack of co-ordination, switch direction many times and experiment. Tactical policy mistakes and errors can usually be detected before too much damage is done, and revised policies implemented in a learning game of trial and error. However, this is only the case when the strategic thrust of policy has been set correctly. Getting strategy right is vital mainly because change is difficult and errors are costly. When strategy is wrong, retribution usually follows, as it did in the Ireland of the 1950s. Today, the strategic decisions that we take will determine whether we can consolidate the successes of the 1990s or whether we too will decline in the twenty-first century just as Northern Ireland did after its period in the sun at the beginning of the twentieth.

The Irish development experience took place in the context of a great debate that dominated the twentieth century, which juxtaposed the roles of free markets and central planning. Within the conventional view of free market economics, sub-debates raged: for example, free trade versus protectionism. These somewhat abstract debates never took place in a vacuum, but came bundled with cultural and geopolitical baggage. Large power blocs could often impose their solutions by force on smaller, weaker countries, as with the formerly communist countries of Central and Eastern Europe. Less dramatically, domineering countries and historical events could circumscribe the practical and realistic choices of smaller countries, as with Ireland for forty years after it gained its independence.

To understand properly the recent Celtic Tiger phenomenon, it helps to understand the manner in which Ireland exercised its freedom to choose its path of economic development after independence in 1922. The explanations for recent success, as for past failures, go deep into how policy-makers design and implement long-term strategies. The actual facts of underdevelopment are seldom in dispute: poverty and failure are easy to recognise and castigate. But what is crucial is the way that local (and sometimes international) policy-makers and analysts think about the facts. In other words, the conceptual frameworks that underpin policy actions are all-important: failure to develop is usually associated with incorrect conceptual frameworks rather than the absence of hard work. On the other hand, a framework that is highly appropriate seems to have the power to energise people, dragging them along in its train. Joseph Lee, in his magisterial Ireland 1912-1985, brooded on the causes of failure and reached fairly damning verdicts concerning the role played by contemporary economists and policy-makers (Lee, 1989). Tom Garvin, in his excoriating book Preventing the Future, catalogues the wider collusive coalitions – lay and clerical – that stood in the way of change (Garvin, 2004).

The real origins of the Celtic Tiger go back to the crisis of the late 1950s and the subsequent strategic change in policy direction. The Cumann na nGaedheal governments of 1922 to 1932 had largely continued with pre-independence policy norms: a fixed link with sterling and free trade. Given the absolute dominance of Britain as a destination for Ireland’s mainly agricultural exports few seriously challenged these assumptions. However, the efforts to restore the certainties of the pre-WWI economy – based on free trade and the gold standard – had collapsed by the early 1930s and the world moved into depression, fragmentation and – eventually – war.

In the light of his subsequent role in the modernising moves of the late 1950s, it is interesting to note that Sean Lemass was a reluctant convert to protectionism. In the years 1929-30, before Fianna Fáil came to power, he wrote a detailed position paper where he noted that free trade was an optimum arrangement for a united world economy but that the world was sliding into divisions that made resort to protectionism almost inevitable. In such circumstances, and in light of the poor level of industrialisation in Ireland, there was no option but to follow the world trend.

The driving motivation for the new policies of protection was the need to create an Irish manufacturing sector from almost a zero base. Critics of the post-independence governments do not always realise that the partition of the island in 1922 had split off the only heavily industrialised region, centred on Belfast, leaving the Free State with the very modest remainder. John Maynard Keynes had been invited to deliver the first Finlay lecture in UCD in 1933, which provides a fascinating insight into his thoughts on Ireland and its policy options. Keynes declared – in the most often quoted extract from his Dublin lecture:

Ideas, knowledge, science, hospitality, travel – these are the things which should by their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.

and concluded:

If I were an Irishman, I should find much to attract me in the economic outlook of your present government towards greater self-sufficiency.

What is seldom quoted is what immediately followed these remarks, and heavily qualified them.

But as a practical man and as one who considers poverty and insecurity to be great evils, I should wish to be first satisfied on (some) matters … I should ask if Ireland is a large enough unit geographically, with sufficiently diversified natural resources, for more than a very modest measure of national self-sufficiency to be feasible without a disastrous reduction in a standard of life which is already none too high.

Keynes went on to suggest in the longer tem an economic arrangement with England (sic) that resembled the Anglo Irish Free Trade Agreement that was eventually concluded over thirty years later in 1965. But what is even more interesting are the reasons why Keynes had become temporarily disillusioned with free trade and international interdependence. Remember, Keynes was the author of The Economic Consequences of the Peace, a man who, at the time of the negotiation of the Treaty of Versailles in 1919, foresaw exactly where the vindictive treatment of a fallen Germany would lead. As countries were confronted by depression, and as the post-WWI German economy disintegrated, there was an aversion to international economic interdependence. Nations turned inward, fell back on their own resources, and there was a proliferation of exchange controls, tariffs, import quotas, and the like. Even in Britain – the spiritual home of free trade – the Import Duties Act of 1932 imposed tariffs on a wide range of non-Empire goods. Keynes’s Finlay lecture was given on April 19th, a month after Adolf Hitler was appointed chancellor and three weeks before the burning of books in Bebelplatz, off Unter den Linden in Berlin, on May 10th. Keynes’s worst nightmare had come to pass.

It is little wonder that he declared:

It does not today seem obvious that a great concentration of national effort on the capture of foreign trade, that the penetration of a country’s economic structure by the resources and the influence of foreign capitalists, that a close dependence of our own economic life on the fluctuating economic policies of foreign countries are safeguards and assurances of international peace.

Keynes’s was the wider vision and may not have had much resonance in a country preoccupied with its own internal development problems. He had abandoned the liberal economic agenda for reasons associated with the deterioration in the world political climate, but was to work diligently during and after the coming war to restore this agenda and to avoid repeating the errors of Versailles. The new Fianna Fáil government, on the other hand, had domestic objectives of industrialisation and needed to erect protective tariff barriers to shield the infant industries. However, the protection that was put in place in 1933 endured through WWII (a time when access to vital imports was a more pressing problem than protection) and continued through the period of post-war recovery into the late 1950s. The modest boom of the late 1940s – when Ireland had captive British markets for its agricultural and food products – served to conceal the underlying problems that the resumption of more normal conditions brought during the 1950s.

The mainly historical accounts of Garvin and Lee point to human failings that led to the stagnation of the 1950s. In so doing, perhaps they underestimate the economic and geographical constraints that faced the state even after almost thirty years of independence. The political incorporation of Ireland into the United Kingdom between 1801 and 1922 had generated forces that also led to comprehensive economic and trade integration. The full extent of this integration after more than a hundred years of union is demonstrated by the UK-Irish trade position from just after independence in 1922 to the year 1950, during which the proportion of Irish exports going to the UK remained at nearly 100 per cent. The dilemmas facing the newly devolved administrations of Scotland and Northern Ireland today, as they try to flex their policy muscles, are remarkably similar (Alexander, 2003; Alexander et al (eds), 2004; Pollak (ed), 2001).

The failure of Ireland to diversify its economy away from an almost total dependence on Britain had serious consequences for its economic performance when compared to a range of other small European countries (Mjoset, 1992). Post-independence Irish public administrations found it difficult to deviate too much from British policy norms. It was hardly surprising that Ireland continued to be heavily dependent on the British economy, a dependency that lasted from independence well into the 1960s. While policies and policy-makers in Ireland may have been less assertive and innovative than might have been desired, in the absence of a competitive and export-oriented industrial sector there is probably very little that could have been achieved to accelerate an earlier economic decoupling from Britain.

We have an extraordinary pre-modern statement of the vision of Ireland’s economy in a speech that the taoiseach, Eamon de Valera, gave in 1943:

That Ireland, which we dreamed of, would be the home of a people who valued material wealth as the basis for right living, of a people who were satisfied with frugal comfort and devoted their leisure to the things of the spirit – a land whose countryside would be bright with cosy homesteads, whose fields and villages would be joyous with the sounds of industry, with the romping of sturdy children, the contests of athletic youths and the laughter of happy maidens, whose firesides would be the forums for the wisdom of serene old age. It would, in a word, be the home of a people living the life that God desires that men should live.

Shortly after I joined the ESRI (Economic and Social Research Unit) in 1982, I found a pile of old publications from the Central Statistics Office that was about to be dumped. The cover of a 1949 copy of the dry Statistical Bulletin caught my attention, and seemed to capture de Valera’s odd flight of imagination in a picture:

 

 

The world of reality was very different, even almost forty years later, when the British publication The Economist used the image of a street beggar on the cover of a special survey of the Irish economy on January 16th, 1988 (“Poorest of the Rich”, A Survey of the Republic of Ireland).

Even while the war was in progress, Keynes and others worked to ensure that post-war barriers to trade and currency exchange would not disrupt the efficient functioning of the international economy as it had after WWI. The international institutions that emerged from the Anglo-American negotiations – the IMF, the IBRD (or World Bank), and the GATT (General Agreement on Tariffs and Trades) – were heavily influenced by Keynes, even if the detailed implementations carried the imprint of the now immensely powerful USA. The European scene was further transformed by the European Recovery Programme (Marshall Aid) from April 1948 and the major devaluations against the dollar of September 1949. In addition, the Schuman Plan of 1950 set up the European Coal and Steel Community, and led eventually to the signing of the Treaty of Rome in March 1957. This was the international context that was to test the robustness of inward-looking Irish policies and cruelly expose their weaknesses.

The early part of the 1950s was characterised by a series of balance of payments crises that were handled in the conventional way, by imposing higher taxes and cuts in expenditure to reduce internal demand drastically. But these problems were simply the consequences of the inefficient and uncompetitive manufacturing sector, and not the primary causes. Protection had failed to produce self-sufficiency. Any increase in consumption quickly ran into the sands of the balance of payments constraint. In other words, this was exactly what Keynes had warned about back in 1933: Ireland was simply too small to be a producer of goods where it had no comparative advantage.

The Control of Manufactures Act – which had been used to prevent foreign ownership of Irish industry – was initially relaxed and then formally abolished. By 1956 the Fine Gael-led coalition government had started to use industrial grants to attract foreign activity into Ireland rather than merely to divert domestic industries to particularly needy locations. Also, an export tax relief scheme – exempting profits earned from new or increased exports – was put in place.

The disparate policy changes that evolved during the 1950s were consolidated in Economic Development and codified in the First Programme for Economic Expansion. But just as Christianity arriving in Ireland in the absence of accompanying Roman legions was forced to absorb rather than conquer the pre-Christian religions, so too were the planners of the 1950s obliged to pay homage to the household gods. Education tended to be regarded as “belonging” to the church authorities. Planning (with a big P) was downplayed. The introduction to Economic Development contained an ingratiating quotation from the Bishop of Clonfert:

Although our enterprise in purely spiritual fields has never been greater, we have shown little initiative or organisational ability in agriculture and industry and commerce. There is here the widest and most varied field for the play of the vital force that our religion contains.

Within Economic Development, an extraordinary and diverse range of ideas and proposals was advanced, mainly in the areas of agriculture and the associated food sector. But with the benefit of hindsight this seminal document can now be recognised as a transition between old and new perspectives rather than a wholehearted embrace of a modern, Celtic Tiger view of the economy. For example, the zero rate of manufacturing profits tax, combined with the liberalisation of trade and foreign investment, as well as the freedom to repatriate profits, were absolutely central factors in a process that would inexorably lead to the decline of the indigenous manufacturing sector and the rise and eventual dominance of a new foreign-owned sector. Yet the tax initiative lies buried in Appendix 2 of Economic Development (Measures designed to encourage investment in Irish enterprises) on page 232 and is not mentioned in the main text, which is obsessed with agriculture.

Having gone through the process, we now understand that when a mainly agricultural country attempts to modernise, the primary requirement is for the farming sector to shrink as a proportion of the overall economy, and for the manufacturing sector (and elements of traded services) to expand and develop in a way that drives export growth through improvement in cost competitiveness. Given Ireland’s dismal record of native entrepreneurship in the post-war period, this involved attracting direct investment from America. Yet the vision of Economic Development was one of agriculture-led export growth, with a continuing mainly indigenous manufacturing base. The major educational initiatives came in the train of Economic Development, rather than in the vanguard. The official aim was to emulate Denmark, a classic case of agriculture-led industrialisation. In fact, thirty years later, we had come to resemble Massachusetts, a state whose economy is dominated by high technology firms, except that in the case of Ireland, these firms were of foreign origin. While the official rhetoric of development stressed continuity with the agricultural past, the newly created state development agency (the Industrial Development Authority, or IDA) buzzed with excitement at the potential offered by the new policy regime.

The policy changes made in the 1950s were a heady mixture of a commitment to trade liberalisation, a range of direct and indirect grant aids to private firms and the incentive of zero corporation profits tax on exports. The object was to give a kiss of life to inefficient domestic industries, but that never happened. By the early 1980s, most of the old industries had either failed, downsized or been transformed. Luckily, this policy mix was precisely what was needed to ride the coming tidal wave of American foreign direct investment, in contrast to the declared policy aim of growing on the back of an expanding indigenous agri-industrial base. The policy thrust was uniquely appropriate to Ireland’s development challenge, but the outcome eventually produced by these policies turned out to be very different from what was anticipated. One needs to distinguish between the factors that influence the design of public policy and how the business community actually exploit the new initiatives. One cannot always predict the latter from a knowledge of the former.

The Irish economy emerged from the 1950s still in a weak state, but at least it was now equipped with a policy strategy that happened to be uniquely in tune with the changed times. Furthermore, Ireland was no longer alone in having difficulty in coping in a new European and international environment. American investment into Europe at that time was so dynamic and threatening that it presented the major European economies with what Jean-Jacques Servan-Schreiber characterised in 1967 as Le Défi Américain (the American Challenge).

Europe faced different problems from those confronting Ireland, and the development of the postwar European economy has been recently described by Eichengreen (2007), as a highly successful period of reconstruction and “catch-up” (1945-1970), followed by a less successful struggle to innovate and remain competitive in a global economy (post-1970). One simply cannot understand the deeper, strategic challenges facing Ireland in the absence of an understanding of the wider challenges facing Europe and the USA.

The strong dependency of Ireland on Britain that had endured relatively unchanged from independence until the late 1950s began to weaken after the shift to foreign direct investment and export-led growth that followed the various French-style Programmes for Economic Expansion in the late 1950s and during the 1960s. The opening of the economy and the removal of tariff barriers were necessary policy changes to kick-start from stagnation. Free trade with Britain – Ireland’s main trading partner – happened in the mid-1960s. This initiative provided a very useful opportunity of “testing the water” of outward orientation. Free trade with Europe came later, when Ireland joined the then EEC in 1973. The strategic orientation of Irish economic policy-making since the early 1960s has always emphasised the need to handle the consequences of extreme openness, to encourage export orientation towards fast-growing markets and products, and to be aligned with all European initiatives. Thus, we joined the European Monetary System in 1979, breaking a long link with sterling and its deep economic and psychological dependency. We embraced the Single Market of 1992, the Social Chapter of the Maastricht Treaty and Economic and Monetary Union (EMU) from January 1999. The embrace of openness came to provide a strong and enduring strategic backbone for our economic planning.

But Ireland was still not a very attractive place in which to invest in the early 1960s. It was remote and unknown, had little by way of natural resources and no industrial heritage. The main inducement provided to inward investors was initially a zero rate of corporation tax on exports of manufactured goods. This tax policy, combined with aggressive and sophisticated marketing initiatives designed by the IDA to attract and aid inward investors, provided the main driving force for the modernisation of the economy through export-led growth.

Other factors came together to reinforce Ireland’s success and interacted to create a virtuous circle of superior performance that replaced the previous vicious circle of decades of underperformance, culminating in the failures of the 1950s. Educational standards in the Irish workforce lagged behind the world, a direct consequence of decades of neglect. Policies were urgently needed to bring about a steady build-up of the quality, quantity and relevance of education and training, and this had been initiated by farseeing educational reforms starting in the 1960s. These reforms were later extended by the emphasis given to scientific and technical skill formation through the use of EU structural funds from the late 1980s.

The Irish economic policy-making environment after 1960 gradually shifted from one appropriate to a dependent state on the periphery of the United Kingdom to that of a region more fully integrated into an encompassing European economy. Foreign investment renovated and boosted Irish productive capacity. The Single Market provided the primary source of demand. All that remained was for a big push on improvement in physical infrastructure, education and training, and this arrived in the form of a dramatic innovation in regional policy at the EU level, with the advent of Structural Fund aid from the late 1980s. There was nothing magic about the high growth and convergence that followed. It was simply the inevitable consequence of a well-thought-out embrace of globalisation. What was magic was the combination of a far-sighted industrial strategy in the early 1960s and imaginative use of the new freedoms to shift to export-led growth, setting in train a process of convergence that even the disastrous fiscal policy errors of the 1977-82 period could only delay, not prevent.

It is clear that there were some special circumstances surrounding the Irish switch to trade liberalisation and active encouragement of inward investment. First, the manifest failure of the previous protectionist policies had been so dramatic that almost no domestic group favoured their retention. Second, the range of abilities and expertise available within the Irish public sector was considerable, and there was a willingness to learn from the indicative planning experiences of continental Europe. Third, the completion of European reconstruction, and the growth in importance of the EEC, provided the opportunity to capture some of the rapidly expanding flow of American investment into Western Europe. Fourth, rapid advances in technology and declining transport and communications costs during the 1960s facilitated the process of foreign investment by multinational corporations that culminated in the explosive growth of the 1990s.

However, the path Irish economic development has followed since the 1960s is not without its risks. The most dynamic part of manufacturing is almost completely foreign-owned and is concentrated in a narrow range of technologies that are fast moving towards maturity. In this arena, the policy initiatives that provided us with an advantageous head start in the early 1960s may not be sufficient to facilitate the inevitable switches to newer technologies, since other countries and regions have been learning by watching Ireland doing. Until recently, we could rely on an abundant supply of highly trained Irish workers. But birth rates fell rapidly in the 1980s, and if growth is to continue we may have to rely on inward migration to supply the labour.

Today, on the global economic map, the lines that matter are those defining “natural economic zones”, where the defining issue is that each such zone should possess, in one or other combination, the key ingredients for successful participation in the international economy. With low transportation and telecommunication costs, national economies are destined to become increasingly interdependent, and in the words of former US labour secretary Robert Reich:

the real economic challenge ... [for the nation] ... is to increase the potential value of what its citizens can add to the global economy, by enhancing their skills and capacities and by improving their means of linking those skills and capacities to the world market.

This process of global competition is organised today mainly by multinational firms and not by governments. Production tends to be modularised, with individual modules spread across the globe so as to exploit the comparative advantages of different regions. Hence individual small nations and regions have less power to influence their destinies than in previous periods of industrialisation, other than by refocusing their economic policies on location factors, especially those which are relatively immobile between regions: the quality of labour, infrastructure and economic governance, and the efficient functioning of labour markets.

As to the future of inward investment into Ireland, the fact that foreign ownership of the manufacturing sector is already at a very high level makes it less likely that it can rise much further. The southern European periphery, as well as the new EU states of Central and Eastern Europe, have cost advantages, good human and physical capital infrastructures, geographical proximity to the core markets of Europe, and stabilising macroeconomic, fiscal and monetary environments. Even China and India, remote from European markets, have great cost advantages. The future for Ireland is more likely to involve both a shift towards greater complexity (new products, emerging technologies) as well as a more active reliance on the rapidly modernising indigenous sector. Indeed, the so-called product life-cycle model fits the stylised Irish facts rather well: early inward investment in simple standardised products (“screwdriver operations”), recent shifts to maturing products (e.g Intel Pentium chips) and a potential for attracting more R&D activity in the area of new products.

Perhaps the most sobering lesson of the 1950s is that the true significance of the internal elements of the national strategy was not always fully understood at the time of its inception. In the 1950s the Irish tax system was used creatively to underpin our ability to stimulate exports. Had policy-makers been less radical and corporate tax rates been reduced only marginally rather than slashed to zero, the Irish economy today would probably look more like that of Northern Ireland than like Silicon Valley. But strategic planners today must look to a future where Irish international competitive advantage will rest more on the quality of our infrastructure, the excellence of our education system, our ability to innovate and the wider benefits of living and working in Ireland than mainly on a low corporate tax rate and inward investment. These challenges may seem less urgent than the challenges faced by policy-makers in the 1950s. But they are no less real.

In the future, the most successful states will be those who learn to play a critical role in shaping markets by mediating connections between the local and global, and by influencing how local-specific assets are mobilised within the range of opportunities available in the global economy. In his study of high technology growth in Ireland, Sean Ó Riain has defined the concept of a development network state as one that is embedded in a variety of levels and types of governance institutions and works as a liaison or broker in creating networks and empowering non-state actors (Ó Riain, 2004). But of course the only way that this approach led to success in Ireland (after thirty years of trying) was that it eventually became embedded in a network development state where many state actors worked to reinforce the development process. Arriving at the best way of promoting development is one of the very hardest things that government can do. The EU, in the case of Ireland, can act as a partner in the process. But the initiatives have to be home-grown.

The two earlier shifts in Irish development strategy – towards protection in the early 1930s and towards globalisation in the early 1960s – came about because external realities overcame flawed imagination. Tom Garvin’s conclusion is as valid for the future as it was for the past:

The Irish post-war confrontation with the challenge of the modern world in the form of possibilities of economic development together with the linked possibility of profound cultural change offers [a) good example of how institutional systems and systems of ideas interact in a complex way in political life. In this, as in so much else, Ireland has joined the world.

Books referred to in this article:

Alexander, Wendy (2003): Chasing the Tartan Tiger: Lessons from a Celtic Cousin?, London: The Smith Institute

Alexander, Wendy, Ashcroft, B and Coyle, D (eds) (2004): New Wealth for Old Nations: Scotland’s Economic Prospects, Princeton: Princeton University Press

Clinch, Peter, Convery, F and Walsh, B (2002): After the Celtic Tiger: Challenges Ahead, Dublin: O’Brien Press

Eichengreen, Barry (2007): The European Economy Since 1945: Coordinated Capitalism and Beyond, Princeton: Princeton University Press

Garvin, Tom (2004): Preventing the Future: Why was Ireland so poor for so long?, Dublin: Gill and Macmillan

Keynes, JM (1933): “National Self Sufficiency”, Studies, 22, pp 177-193

Lee, Joseph (1989): Ireland 1912-1985: Politics and Society, Cambridge: Cambridge University Press

MacSharry, Ray and P White (2000): The Making of the Celtic Tiger, Cork: Mercier Press

Mjoset, Lars (1992): The Irish Economy in Comparative Institutional Perspective, Report No 93, Dublin: National Economic and Social Council

Nolan, B, O’Connell, J and Whelan, C (2000): Bust to Boom? The Irish Experience of Growth and Inequality. Dublin: Institute of Public Administration

O’Hearn, Denis (1998): Inside the Celtic Tiger, London: Pluto Books

Ó Riain, Sean (2004): The Politics of High-Tech Growth: Development Network States in the Global Economy, Cambridge: Cambridge University Press

O’Toole, Fintan (2003): After the Ball, Dublin: New Island

Pollak, Andy (ed) (2001): Can the Celtic Tiger Cross the Irish Border?, Cork: Cork University Press.

Sweeney, Paul (1998): The Celtic Tiger: Ireland’s Continuing Economic Miracle, Dublin: Oaktree Press


John Bradley was for many years a Research Professor at the ESRI and now works as an international consultant in the area of economic and industrial strategy.  He regularly advises the European Commission, the World Bank and other international organisations and governments on policy issues related to promoting long-term economic growth and development.

Categories