Economic Development, 1958

Completed in May 1958, Economic Development was a 250-page study of the Irish economy initiated and supervised by T. K. Whitaker, who had been appointed secretary of the Department of Finance in May 1956. The work was framed by the social and economic crises of the mid-1950s, which saw emigration from the country exceed 45,000 per annum—75 percent of the birth rate. Ireland had remained removed from the economic boom enjoyed across Western Europe and the United States, as total employment in the country fell by 12 percent between 1950 and 1958 and the volume of GNP increased by just 6.5 percent. As a further backdrop to Ireland's economic stagnation, increased acceptance of the potential of economic planning among the country's political elite, as well as the moves toward freer trade between countries evidenced by the development of the Common Market, challenged the traditional assumptions on which the Irish economy was operated. In light of these internal and external pressures, and an emerging consensus that economic change was necessary, in the early months of 1957 Whitaker assembled a team that worked in small groups finalizing sections of the study under the coordination of Charlie Murray, an official from the Taoiseach's Department. Following the release of the May 1958 draft, Economic Development was amended to reflect departmental and governmental contributions in the intervening months, then formed the core of the white paper titled Programme for Economic Expansion published in November 1958.

Intended as a blueprint for the economy from 1958 to 1963, the Programme again stressed that agriculture should drive the economy, mostly through increased export of cattle and beef. Although considerable insight was offered into existing policies, no formal planning methodology was applied in constructing new ones. The only policy instrument specified for agriculture was the provision of fertilizer subsidies, and the Programme largely avoided the recommendation in Economic Development that agricultural grants be redirected away from relief of rates toward increased production. Furthermore, agriculture was to receive only 14 million of the £53.4 million investment promised in the Programme. Ultimately, agricultural growth was exceptionally slow, and the net-output index increased by merely 1.6 percent between 1957 and 1963, despite the fact that 1957 was an extremely depressed year. Crucially, industry easily exceeded the modest goals set for it. Better access to loans and the courting of foreign investment, as well as improved grants to new industries and tax relief for manufactured exports, facilitated major advances in the industrial sector, which were largely responsible for overall economic growth of 23 percent through the duration of the Programme. By 1965, 80 percent of all investment came from foreign capital, and through the 1960s, 350 new foreign companies were established in Ireland. While Economic Development was not quite the revolutionary document that its most enthusiastic supporters claimed, it nonetheless played a significant role in redirecting the Irish economy toward a more industrial path.

SEE ALSO Agriculture: After World War I; Economies of Ireland, North and South, since 1920; Investment and Development Agency (IDA Ireland); Primary Documents: From Economic Development (1958)

Bibliography

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Paul Rouse