The history of Ireland after 1920 follows a pattern that’s fairly familiar: anti-colonial struggle results in a flight of capital and a loss of skilled labor as the colonial elites flee. The ideological efflorescence of the pre-independence period quickly disappears, and the new state’s politics are tightly constrained by a narrowly nationalist ideology developed in the aftermath of the colonial struggle. This ideology is not particularly consistent with rapid economic growth, so development stalls for decades.
Many key industries are fully or partially state-owned; while this is not necessarily a bad thing, the new state is not always such a great manager. The former colony also goes through a period of protectionism combined with mostly unsuccessful attempts at import substitution. Trade with the former colonial power continues to be critical, despite repeated efforts to diversify. For decades after independence, the economy remains dominated by agricultural exports.
Eventually, though, the country sets out on a period of rapid economic growth that provides rising standards of living for most of the population. This also includes a belated diversification of the economy along with a concomitant diversification of trade — the former colonial master is still important but is no longer absolutely dominant. Inward investment soars. This exciting period is unfortunately marred by massive corruption among the former colony’s political elites.
Ireland after 1920 — but also a bunch of places in Africa and Asia since the mid-20th century.
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— So. Lots of these what-ifs depend sensitively on the initial condition. Let’s assume Home Rule is somehow moved forward by a year, so that the Curragh Mutiny etc. happens in August 1913 instead of 1914. Let’s further assume that the Liberal government, when cornered, suddenly grows a spine. The suppression of the revolt may be bloody, but it’s all over by Christmas. By the time the Archduke heads to Sarajevo the new dispensation is well in place.
Okay, so: avoiding the Civil War and its economic consequences mean that right off the bat, Ireland is a fair bit richer. How much richer is hard to say, but based on modern colonial struggles I’m guessing Irish incomes sank by 10% to 20% — a pretty conservative estimate for a civil war followed by independence. This is complicated by the question of how banged around Ulster has been, and also by the fact that some of that income is actually rents belonging to Ascendancy Protestants in the south (who in this world have not been burnt out or otherwise forced to flee). But still: British Ireland in 1922 is going to be a lot more prosperous than the Irish Free State.
Figure 1 in the paper mentioned in the last post is the go-to on this, but unfortunately it starts in 1921 and not a few years earlier, so it misses most of the effects of the Civil War. Even so, it shows a relative loss of about 5% of per capital GDP (compared to Britain) in the years immediately following the war.
More generally, Figure 1 shows what all of us already knew: that Irish independence was a goddamn economic disaster for almost 50 years, after which things suddenly flipped into reverse and Ireland began growing faster than the U.K. or most other advanced economies. In fact, weirdly enough, Irish growth really took off in the mid-1970s ... right around the time everyone else was saw growth dramatically slow. I’m guessing there are some second-move and center-periphery effects here that could be fun to pick apart.
Probably coincidentally, the 1970s are also when Ireland began to receive prodigous amounts of direct support from the European Community, later Union. (See figure from page 19 here, shown at right.) While large in international terms, however, a net inflow of 3% of GDP is on the order of the net federal transfers received Wyoming or Arizona over the past 20 years and a third of that given to truly poor states like West Virginia, Mississippi, or New Mexico. (Data here.) Flows to Scotland are on the order of 10%; British Ireland would likely receive something on that level, starting well before the 1970s. Note that national insurance likely remains funded by London under Home Rule.
But anyway: with a point of divergence in 1913 and no Civil War, the Irish economy in 1921 is going to be a lot better off than it was in reality. I said 10% to 20%. Going with that, we have to look at Figure 1 and imagine a horizontal line around 1.1 or 1.2. That’s the default GDP for British Ireland, assuming it simply tracks British GDP growth (which I don’t really believe it would, but hey — it’s a starting point). That horizontal line intersects the real-world Irish relative-GDP around 1995, give or take a couple of years. This leads to the conclusion that an Ireland that stayed with Great Britain would have been much better off until the late 20th century. Then, it would have been worse off for the last 20 years or so.
Obviously this is a grossly simplistic back of the envelope calculation that ignores all sorts of stuff, from monetary policy to E.U. membership. And yet ...
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