The economics of devolution: evidence from Northern Ireland 1920-1972: evidence from Northern Ireland 1920-1972

Chapter 2 examines Stormont’s interwar industrial policy, showing regional institutions created barriers to productivity growth. New, higher productivity industries failed to establish, helping lock the regional economy into a low-wage-investment-productivity equilibrium, which persisted post-war. Chapter 3 examines the effect of the Great Depression on Northern Ireland’s trade performance.

Its trade is found to have been more resilient than the existing narrative suggests, with a recovery driven by the staple industries, and the UK’s protectionist trade policy benefiting Northern Ireland’s exports to Britain. Northern Ireland’s problems of high unemployment and slow growth were therefore not simply demand-side problems, but reflected the supply-side of the regional economy as well. Together, the three chapters demonstrate the importance of regional institutions and the supply-side to the economic benefits of devolution being realised, where simply more devolution is not necessarily beneficial for economic efficiency.