The Critical Role of Ideas: Understanding Industrial Policy Changes in Ireland in the 1980s

Abstract

In the current context of economic crisis we examine how earlier Irish governments, also confronted with challenging economic circumstances, sought to alter the country’s industrial policy. During the second half of the 1970s the Irish economy performed relatively well, after weaker performance following the first oil shock. However, recovery proved transitory, as procyclical fiscal policies fed inflation. By the 1980s, the economy shrank, and unemployment and emigration returned. This led to a questioning of industrial policy in place since the 1950s. What changes were made to this policy during the 1980s? And what lessons might this hold for contemporary policy makers? We use the Critical Junctures Theory (CJT) to investigate these questions. According to Hogan (2006) a critical juncture is a multistage event that sets a process of policy change in motion. A crisis can create a situation where extant policies and associated ideas are called into question by change agents. Any subsequent displacement of the extant paradigm by a new set of ideas on how policy should operate can lead to radical policy change. But, without ideational change, policy change will likely be relatively minor — the hierarchy of goals underpinning a policy will remain unaltered and extant policy will soldier on. Through using the CJT we can gain a deeper understanding of the nature of the changes that occurred in Irish industrial policy during the 1980s.