The Economics of Devolution

: Evidence from Northern Ireland 1920-1972

  • David Jordan

Student thesis: Doctoral ThesisDoctor of Philosophy

Abstract

This thesis asks whether the devolution of policy-making powers is beneficial for regional economic performance, by examining the subnational government at Stormont, between 1920 and 1972. Greater fiscal decentralisation within the UK has been put forward as a solution to growing regional inequalities in economic performance, but the historical example of Northern Ireland has been overlooked. Northern Ireland presents a puzzle, as its economic performance persistently lagged the UK and its regions, despite the apparent benefit of possessing fiscal decentralisation. This thesis is divided into three chapters, which examine three aspects of the subnational government. Chapter 1 examines financial relations between Stormont and Westminster, showing moral hazard limited the financial support provided by Westminster to Stormont. This restricted the efficiency of fiscal decentralisation, creating long-run opportunity costs in industry, infrastructure, education, and housing. 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.
Date of AwardJul 2020
Original languageEnglish
Awarding Institution
  • Queen's University Belfast
SponsorsNorthern Ireland Department for the Economy
SupervisorGraham Brownlow (Supervisor), Alan de Bromhead (Supervisor) & Nola Hewitt-Dundas (Supervisor)

Cite this

The Economics of Devolution: Evidence from Northern Ireland 1920-1972
Jordan, D. (Author). Jul 2020

Student thesis: Doctoral ThesisDoctor of Philosophy