The Republic would never have done as well as it did out of the European Union if it had not been an independent country, a conference was told.
Kevin O'Rourke, professor of Economics at the University of Oxford, said it was striking how well the Republic had done in comparison with Scotland, Wales and Northern Ireland in recent years.
Independence allowed the Republic to exploit membership of the EU in the way that suited the economy. That would not have happened if the State had been merely a region of the UK, he told the national conference on the Easter Rising in NUI Galway.
“Independence would never have worked as well for us if it was not for the EU,” he said. “The EU would not have worked as well for but for our independence.”
He said independence gave political flexibility at a time of rapid economic change most notably in the State being able to set its own corporation tax rate, said Prof O’Rourke.
“We developed a policy mix that was well suited to our own circumstances,” he said.
Mistakes
He maintained the Republic’s economic performance since independence was not atypical and though mistakes were made, they were not “particularly unusual or particularly egregious”.
Smaller, more peripheral countries tended to grow more quickly in the 20th century and that was especially true of those who joined the EU, he said.
The Republic had been given the freedom to make its own mistakes but also to learn from them. “That is what freedom is about,” he said.
Prof O’Rourke said Ireland’s economic performance was “completely average” over the span between 1926 and 2000 though growth rates differed from year to year.
Growth rates in the early years of the State were dragged down by our “excessive dependence” on the poorly performing British economy, he said.
There was nothing unusual about Irish protectionism in the early years of the State. The protectionism of the 1930s was not as bad as many suggested because all countries were engaged in protectionism as a result of the Great Depression.
Economic war
He also suggested the economic war of 1932-1938 was not as bad as it has been portrayed and was ended on very favourable terms for the Irish with a payment of £10 million and the return of the treaty ports. This was critical in assuring Irish neutrality during the second World War, he told the conference.
He said between 1922 and 1950 Ireland's economic choice and performance were typical of similar countries in Europe.
However, during the time period between 1950 and 1973, known to economists as Europe’s golden age, Ireland “massively underperformed”.
The delayed liberalisation of the Irish economy and excessive dependence on the poorly performing British market were contributing factors to Ireland’s underperformance. Ireland had a destructive cycle of short booms and busts which, however, was not unique in Europe, he said.
Ireland’s economic liberation after 1958 was typical of peripheral economies in Europe, but between 1990 and 2001 Ireland was an “extraordinary overperformer”. It was the Irish “golden age”.
