By 1950, Ireland had finally resolved its long-standing questions about its government and its relationship with England. In the following years, the Irish government focused increasingly on economics. The country was still one of the poorest in Europe, and despite its political claims to independence, the Irish economy was heavily dependent on England for both import and export markets. These economic realities were underlined by Ireland's high rate of emigration. The Irish population had continued to drop in every census since the Great Famine of the 1840s.

Fianna Fáil regained power from Fine Gael in 1951 and held on to it for most of the next fifty years. Both parties, however, agreed on the basic solution to Ireland's economic problems: foreign investment, foreign loans, and a planned economy. The plan was to use foreign capital to build industries that would finally relieve Ireland's chronic unemployment.

The plans were successful. Ireland benefited from American Marshall Plan funds, and American and English businesses showed enthusiasm for investing in Ireland. The economy slowly developed, and by the 1960s the Irish standard of living was creeping toward the standard of Western Europe. The rate of emigration slowed down. The 1966 census showed, for the first time in more than 100 years, an increase in population.

Ireland eagerly took part in the developing multinational organizations of the postwar years. The Republic joined the UN in 1955 and the European Economic Community in 1972. In these platforms, Ireland put forth the image of a small country, related to England but not tied to it, ready to take its own place in the international community.