17 Nov 2015

The Emerald Isle Exception: The Unique Case of the Republic of Ireland and Economic Development

Kayle writes*

Acemoglu and Robinson in Why Nations Fail establish in accessible language what they deem to the determinant factor in economic development across history and around the globe – the centrality and inclusivity of political institutions. Another central thesis of the Harvard and MIT professors’ writing states that the dichotomy of economic development and innovation between the developed and third world was heavily influenced by the plight of colonialism. States that acquired independence from colonial occupiers in the 20th century were doomed to mimic the framework of exploitation they had long endured and thus fail to generate central and inclusive institutions that would facilitate economic development. For the most part, many have argued that these assumptions are widely true. However, it would appear there is one notable outlier to this norm – the Republic of Ireland.

The Emerald Isle is truly a unique case in tale of imperialism and colonialism in the span of history. Ireland was invaded by the British approximately in the 1200s, and thus endured seven hundred years of a tumultuous relationship that saw multiple rebellions and ultimately a war fought against the British presence in Ireland from 1919 to 1921. The indigenous population was not feared as “the other” with whom no commonality could be established, as was the case with native inhabitants in Australia, New Zealand, and the United States. Ireland would arguably draw closer parallels to colonies that the British attempted to coax into political submission through assimilation of leadership into Anglo culture and with physical threat as a means to coerce, such as India. The population of Irish speakers was depleted as the belief spread throughout the country that only the command of the English language as a native speaker could provide adequate employment opportunities. However, these similarities with other exploited colonies diverge onto different trajectories following the acquisition of independence, as Ireland in the latter half of the twentieth century experienced rapid economic growth that greatly elevated its standing in regards to human development and innovation. So what exactly creates this “Emerald Isle Exception?”

To investigate such a question, perhaps we should turn to the assumptions of Acemoglu and Robinson. Ireland became an official and integral part of the United Kingdom with the Act of Union in 1801 which abolished the Irish Parliament and granted Ireland the status of modern day Scotland and Wales. For over one hundred years Ireland conducted its political business through the centralized Westminster government, yet inclusivity was limited as Catholics were not allowed to hold the position of members of parliament until the 1830s. Additionally, the Irish population largely felt the lassiez-faire attitude of Westminster during the darkest years of the Great Famine in the 1840s was the antithesis of inclusiveness. So the 19th century was a time of centralization, yet there was a notable absence of inclusivity.

The twentieth century for Ireland saw its ascension to dominion status, followed by the fully fledged status of an independent republic in the late 1940s. Yet Ireland stagnated throughout the 1950s and emigration drained the isle of its human capital. The 1960s thus called for the necessary modernization of Ireland through the Programmes for Economic Expansion and Ireland subsequently fast tracked to a developed, rich western nation that was later coined as the “Celtic Tiger”. The Irish economy became more inclusive and thus reaped the benefits of development.

Yet, even with this historical evidence in mind, an exact critical juncture seems impossible to pinpoint. The assumptions of Acemoglu and Robinson were not the only variables in Ireland’s economic development, as perhaps the urgency for Ireland to develop in the 1960s also heavily influenced this progress. Geopolitics could arguably also influence this rapid augmentation of living standards, as Ireland was surrounded by prospering states and therefore felt compelled to compete. Ireland also was a beneficiary of the Marshall Plan which assisted in agricultural development. Finally, although less empirical evidence exists for such a concept, a plethora of Americans around the 1960s claimed Irish descent, and 1963 saw the celebrated visit of President John F. Kennedy to Ireland. Perhaps this strengthening of Irish-American relations also helped foster investment. This amalgamation of factors facilitated Ireland’s modernization and development, something which JFK himself noted was admirable progress in the early 1960s.

Bottom Line: Ireland is undoubtedly a unique case in the study of post-colonial development, and this development is not only due to centralized politics and inclusive institutions, but also is attributed to the influence of geopolitics and migration.

* Please comment on these posts from my growth & development economics students, to help them with unclear analysis, other perspectives, data sources, etc.


Eric said...

There are many stories that could be applied to the development of Ireland and the lack of development of other colonial states. How might we tell which one or ones are true and are predictive? What might quantitative economics and cultural history tell us that may not fit the story that you present? Thanks.

David Zetland said...

Ireland is BACK: http://www.economist.com/news/finance-and-economics/21678830-ireland-shows-there-economic-life-after-death-celtic-phoenix

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