The Irish Case of Dependency: An Exception to the Exceptions?

The dependency approach has recently been criticized by authors who quote the "exceptional" East Asian cases. The Irish case is used to refute these new modernizationist arguments on two counts. (1) Countries such as Ireland, not the East Asian countries, have regimes with characteristics that tend to set dependency relations in motion. These characteristics include radical free trade, free enterprise, and foreign industrial domination. (2) Because of these characteristics, Ireland has endured economic stagnation and tendencies toward higher inequality. Irish economic growth under foreign-dominated industrialization was slowed by decapitalization and by the absence of linkages between foreign and domestic industry. Time-series models show that foreign penetration and free trade are related to slower economic growth, because of slower investment-growth and other reasons. Inequality increased primarily because of rising unemployment. Although social welfare programs reduced the effects of direct-income inequality, their effects have been reduced by regressive taxation and austerity programs.