The Industrial Development Authority, 1949–58: establishment, evolution and expansion of influence

Abstract

Abstract Established in 1949 in the face of Fianna Fáil hostility, and greeted with suspicion by both the department of Industry and Commerce and the department of Finance, the Industrial Development Authority within ten years had carved out a powerful position for itself within the bureaucracy. By the early 1950s, while Seán Lemass was still wedded to the concept of import-substituting industrialisation, the I.D.A. was formulating its vision for ‘industrialisation by invitation’ and lobbying internally for the introduction of export profits tax relief. The adoption of this measure in 1956 initiated the low corporation-tax regime that remains in place to this day. Though frequently conflated, the reorientation of industrial policy in the 1950s and the dismantling of tariff barriers in the 1960s were quite separate initiatives. That the establishment of the I.D.A. and the adoption of export profits tax relief were opposed by the department of Finance and enacted by inter-party governments clearly distinguishes them from the later trade-liberalisation initiative associated with the partnership of T. K. Whitaker and Lemass. The present paper explores the circumstances surrounding the establishment of the I.D.A. and traces its evolution and expanding influence over the first ten years of its existence.