Export-led industrialization in Ireland: A specific case of dependent development. (Volumes I and II).

Abstract

The sociology of development has been dominated by the controversy about whether foreign penetration causes slower economic growth and greater inequality. This dissertation addresses a specific case study of foreign penetration and dependent development: Ireland. Part one analyzes the transition from import-substituting industrialization (ISI) to export-led industrialization (ELI) in the 1950s. The author concludes that the transition was a result of three forces: a class/regime alliance in favor of economic expansion, an economic crisis of ISI, and international pressures. Foreign pressures shaped ELI in favor of foreign capital, free trade, and free enterprise. Because ELI was dominated by free trade and low state economic intervention, authoritarian strategies never predominated, as in some countries (e.g., the East Asian gang of four). Instead, the regime relied on the market and on corporatist structures of class control such as pseudo-planning. Part two concentrates on the effects of foreign penetration on economic growth and inequality. Economic and econometric analysis supports the thesis that foreign penetration retarded economic growth in Ireland due to decapitalization--a net transfer of capital out of Ireland by foreign corporations--and the low level of linkage of foreign corporate activity with domestic industry. The failure of the Irish regime to keep foreign profits in Ireland for reinvestment was particularly damaging to economic growth. Foreign penetration also contributed to inequality in Ireland. It contributed to inequality of personal incomes because of the effects of foreign penetration on unemployment, and it contributed to inequality of factor incomes by redistributing incomes from wages to profits. Moreover, profits were redistributed from domestic to foreign firms, so that foreign penetration caused greater international inequality as well.