In the 1980s Irish governments imposed austerity with remarkable political case and in a uniform fashion that culminated in 1987 with Fine Gael's endorsement of the economic aims of the minority Fianna Fail government – virtually a declaration of “a national unity regime.” The debt crisis was understandably the first priority; it also obscured, if not eclipsed, debate over the shortcomings of development policy. This chapter explains how consent was gained for a particular diagnosis of crisis and for an extenuation of an ebbing developmental orthodoxy.

The next section surveys the economic difficulties and political liabilities of the industrial policy path which in effect was declared void but not nullified. For want of an authoritative successor this policy continued with minor modifications. Next I examine emergent alternatives within and outside the state's formal boundaries, which all met political and conceptual barriers during the administrations of a Fine Gael-Labour coalition, a minority Fianna Fail government, and since July 1989 a Fianna Fail–Progressive Democrat coalition. Fianna Fail would revive corporatist-style bargaining via a program for national recovery signed, sealed, and delivered in October 1987 despite the severe deflationary Budgets enacted at the time.