The Republic of Ireland: From Protectionism to Economic Openness (1932–1960s)

This chapter examines the Republic of Ireland’s economic transition from protectionism to openness, focusing on key political, institutional, and diplomatic developments between the 1930s and the late 1950s. Initially adopting import substitution policies under Fianna Fáil to promote industrial self-sufficiency and reduce dependence on Britain, Ireland imposed restrictive measures such as the Control of Manufactures Acts. However, these policies led to inefficiencies, lack of competitiveness, and capital flight. Gradual disillusionment with protectionism set in, culminating in the pivotal 1958 “Economic Development” report by T.K. Whitaker. Efforts to attract foreign direct investment , particularly from the United States, were hindered by legal barriers and political hesitations. Nonetheless, key figures such as Seán Lemass and William Norton began promoting foreign capital as essential for export-led growth. The role of the Industrial Development Authority and outreach to the Irish diaspora also grew during this period, albeit with mixed results due to weak diaspora engagement. The eventual repeal of the Control of Manufactures Acts and introduction of tax incentives marked Ireland’s definitive pivot towards economic liberalisation. This transformation laid the foundation for Ireland’s future as an open economy integrated into global markets.