Joe Dowling’s current project at the Abbey Theatre offers a real sense of homecoming for the theatre director. He was artistic director at the national theatre until he resigned in acrimonious circumstances in 1985. He left Ireland for America soon after and he has been head of the Guthrie Theater in Minneapolis for almost 20 years.

Dowling has worked in Ireland several times since his departure however. Most recently he brought a searing production of The Field starring Brian Dennehy to the Olympia Theatre, and he has also made peace with the Abbey, directing several shows there in the intervening years.

The forthcoming production of James Joyce’s The Dead, in a version by Frank McGuinness, has particular resonance for Dowling. “I am very conscious of the fact that there are more than the ghosts of Michael Furey around,” he says.

“I read Dubliners when I was quite young and, being a Dubliner of a certain generation, there was something in the city when I was growing up that was evocative of that Joycean period.

“Many of the issues in the stories – themes of nationality, religion, identity, class – spoke directly to my personal experience.”

Dowling grew up in Clonskeagh to “solid middle-class Dubliners, civil servants”. He found that “all those things that were in Joyce’s work two generations before had particular resonance with my own history, particularly some of the political stuff. That if you were not a Gaelgeoir, or imbued with the cultural spirit of nationalism, that you were not really Irish but a West-Brit. That was something that was thrown at us a lot.”

Reading the stories again for the production, Dowling was startled by their effect on him. “It was as if the stories had a direct bloodline back to my own life,” he says. “Especially The Dead. My grandmother on my mother’s side was even a music teacher, like the Morkan sisters. I keep saying in rehearsals, ‘Oh this reminds me’.”

Joyce played an important role in Dowling’s early career. One of his first major roles as an actor was that of Leopold Bloom, Joyce’s famous flaneur, in a 1974 production of Ulysses in Nighttown at the Abbey, which he joined as an actor in 1967. The play was also significant for Dowling’s relationship with the writer, “because I had tried and failed to read Ulysses several times. But being Bloom I had to go back to it and try and try again. I had to understand it, and finally I did, and it was mesmeric.”

Over almost two decades as a company member at the Abbey, Dowling slowly became involved in more than acting, encouraging and promoting new work at the experimental downstairs space at the Peacock. By the 1980s Dowling had become the youngest ever artistic director at the Abbey. He made it his business to rejuvenate the theatre, which was slowly being strangled by the weight of its own history.

Any progress he made, however, was short-lived, and after seven years at the helm, Dowling was forced into resigning by the Abbey’s board of directors.

“It astonishes me that almost 30 years later it’s still remembered,” Dowling sighs, “but my animus was towards a particular board of directors, which impacted the work I could do, rather than towards the institution, which I loved and still do. I joined when I was 18. It was where I grew up, and I am proud of what I achieved there.”

Dowling was so bruised by his experiences that even after he had been appointed artistic director of the Guthrie Theater in 1995, he was still defensive. “When I first met the Board at the Guthrie,” he recalls, “I was relating to them on the assumption they would be the same as the board at the Abbey so I had a confrontational attitude. I remember they responded by saying ‘I think you are under the misapprehension that we want to do your job. We don’t. We want you to succeed in your job.’ And that was liberating. The thing is, when you’re a success in America, you’re a success.”

Dowling has certainly achieved an enormous amount since leaving Ireland. Apart from his commercial successes at the theatre, he redefined the Guthrie artistically, bringing in new work to complement its classical repertoire.

Working there opened his eyes to an entirely different approach to culture and tradition. He also oversaw an enormous redevelopment of the theatre worth $125 million (€95 million). Almost all of that money was raised through the theatre’s philanthropic relationships, and it is the generosity of patrons that continue to fund the theatre on a daily basis.

“We operate on a budget of $36 million – $1 million of that comes from the state, but that’s high figure for American theatre,” he says. America operates an entirely different system of funding for the arts than in Ireland, Dowling says. “There is a real culture of giving back to the community, and it is an ideological thing too.”

Dowling believes it will be a while before such a system would work in Ireland, however. “Philanthropy is a culture that took generations to build,” he explains. “In America most of the big philanthropists in the arts come from generations of wealth. To put it crudely, it is old money; new money tends to stay in pocket.

“So it is foolish to think people who made money in Celtic tiger – if they were even able to keep it – would immediately start donating it to the arts or other causes.

“But eventually, new money becomes old money. [Philanthropy] is a culture that takes a while to take root, but if there is any theatre that it could work for, it would be the Abbey, because its name is known all over the world.”

One of Dowling’s more recent achievements at the Guthrie was his return to the stage after 21 years, when he starred in a new production of Brian Friel’s Faith Healer, to celebrate the writer’s 80th birthday.

It was a great critical success, and when he retires from the Guthrie in 2015, he hopes he will get the opportunity to return to his first love: acting.

Rehearsals for The Dead have confirmed this ambition, as he is working with “actors I grew up with, people I’ve known since the very early 70s”. Being surrounded by familiar faces has added to the sense of serendipity surrounding the production. “Some of us have known each other forever,” Dowling says fondly, “so in rehearsals it feels like we are at the party in Usher’s Island. But that is what The Dead is about: shades of the past, the juxtaposition of ghosts and reality, a world that embraces the living and dead.

“So, though I have worked in Ireland, often since I’ve left, this is the production that I really feel has brought me home.”

The Dead opens at the Abbey tonight.