Strategies for Economic Success: Difference between revisions
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''' | <center>'''== The Economic Autarky Strategy =='''</center> | ||
== The Economic Autarky Strategy ==''' | |||
A political change took place. The focus now moved to self sufficiency and doemstic protection. The most easily available instrument in hand was: tariff protection. There were two problems:-Goverment was not inclined towards indulging in an abyss of state owned and run industry and there was a mjor lack in the managerical sector of the industry due to lack of enterprising culture. Table two above sums up Irelands economic achievement during 1950-1960. Table three below shows that during 1949-60 while the rest of Europe was undergoing major changes Ireland's economy was the same. Little or no changes took place. Protection became highly protected. Production methods and technology used was obsolete. Size of the firms were small. Firms were scattered in an economy which had bad road networks. Management lacked interest in export market etc. | A political change took place. The focus now moved to self sufficiency and doemstic protection. The most easily available instrument in hand was: tariff protection. There were two problems:-Goverment was not inclined towards indulging in an abyss of state owned and run industry and there was a mjor lack in the managerical sector of the industry due to lack of enterprising culture. Table two above sums up Irelands economic achievement during 1950-1960. Table three below shows that during 1949-60 while the rest of Europe was undergoing major changes Ireland's economy was the same. Little or no changes took place. Protection became highly protected. Production methods and technology used was obsolete. Size of the firms were small. Firms were scattered in an economy which had bad road networks. Management lacked interest in export market etc. | ||
Revision as of 23:17, 26 April 2006
Comparitive advantage strategy
It basically relied on what existed before the independence of Ireland. It depended on the market to allocate the resources. Ireland's comparitive advantage lay in its growing grass. The climate and its topsoil provided excellend conditions for it to be lush and green. It indulged in agricultural trade with the U.K. 60% of Ireland's main labor force was agricultural and only 16% industrial. Industrialization did not fit into the comparitive advantage strategy. Great Depression occured in 1930 and things changed. Ireland had to give up its free trade policy. U.S and U.K raised their tarrifs. It was clear that this strategy had failed.
A political change took place. The focus now moved to self sufficiency and doemstic protection. The most easily available instrument in hand was: tariff protection. There were two problems:-Goverment was not inclined towards indulging in an abyss of state owned and run industry and there was a mjor lack in the managerical sector of the industry due to lack of enterprising culture. Table two above sums up Irelands economic achievement during 1950-1960. Table three below shows that during 1949-60 while the rest of Europe was undergoing major changes Ireland's economy was the same. Little or no changes took place. Protection became highly protected. Production methods and technology used was obsolete. Size of the firms were small. Firms were scattered in an economy which had bad road networks. Management lacked interest in export market etc.
Ireland needed a new set of ideas. Industrial Development Authority was estabilished. There was no restriction on repatriation of profit or on share ownership of domestic firms. IDA's activities from its inception in1958 to Ireland's admission into the European Economic Community in 1973 is recorded in the table below.
Table below shows a dramatic increae in the governments share of GDP frm 27.9-47.3%. They invited other countries to invest etc. It worked!
