Ideas, Structure, State Action and Economic Growth: Rethinking the Irish Miracle

Abstract

This paper advances an argument about the need to take into account two components of state-industry relations if we are to fully understand economic development and policy trajectory, as well as industry-state co-evolution. The first component, the specific structure of the bureaucracy and state-industry relations, has been the focus of intense research. However, the second, the particular industrial economic ideology defining the correct role of the state in industry and industry in a state, is at least as important, if under-researched. In order to do empirically advance the argument the paper merges a cognitive-based constructivist argument with a neo-developmental state structuralist one, to present a new understanding of the role of the state in the Irish miracle that explains not only its success and failures but its internal dissonances, such as the continuous discrimination of the local, Irish-owned, industry in favor of foreign-owned MNCs. The paper illustrates how a particular industrial economic ideology has been formed and crystallized in Ireland. Focusing on the IT industry and using a multimethod research strategy, it traces the influence and evolution of this ideology at five critical decision points over a fifty-year period.

Keywords: Developmental State, Economic Ideology, High Technology, Industrial Policy, Innovation, Cognitive-Base Constructivism

JEL Classification: A11, E00, F02, H1, H10