I'm currently reading through Great Britain and the Irish question by Paul Adelman and Robert Pearce, The Cause of Ireland by Liz Curtis, and Anglo-Irish Relations by Nick Pelling.
Each of these only goes into brief detail about the reasoning behind The Act of Union and the benefits for both nations.
Great Britain and the Irish question does go into slightly more detail, saying there were theorised benefits to the Irish economy, and claiming that strategic reasons were very important behind the decision, but are there any more in depth answers, or sources?
Dr. Marjie Bloy:
The 1801 Act of Union said that Ireland was to be joined to Great Britain into a single kingdom, the United Kingdom of Great Britain and Ireland; the Dublin parliament was abolished; Ireland was to be represented at Westminster by 100 MPs, 4 Lords Spiritual and 28 Lords Temporal (all were Anglicans); the Anglican Church was to be recognised as the official Church of Ireland; there was to be free trade between Ireland and Britain; Ireland was to keep a separate Exchequer and was to be responsible for two-seventeenths of the general expense of the United Kingdom; Ireland kept its own Courts of Justice and civil service; no Catholics were to be allowed to hold public office; there was to be no Catholic Emancipation; Ruling Ireland direct from Westminster solved nothing. The union was a political expedient in wartime, solving none of the grievances in Ireland over land, religion or politics; It had no social dimension at all; Ireland's economic problems were also ignored; The Act did increase the sense of grievance in Ireland however.
Pitt did not see the Act of Union as a solution to the Irish problem. He knew that social and economic reforms were essential, as was Catholic Emancipation. George III refused to allow full emancipation so Pitt resigned in protest because he had intended to follow the Act of Union with reforms.
The Act became a liability rather than an asset. Peers holding Irish estates opposed concessions to Roman Catholics, as did the King, because of vested interests and religious bigotry. The threat to the status quo and potential violence together with patriotic zeal against Catholics stopped full Catholic Emancipation and ended all Pitt's intended reforms.
Essentially, it increased the overall angst and animosity between Ireland and England while providing no overwhelming advantage, particularly for the Irish. It backfired on the man who'd intended it to improve the Irish condition. However, this and the rebellion from the last century did manage one positive outcome: the birth of the Irish Gothic. This writing style was heavily used by the Protestant minority in Ireland to represent themselves as daring and damned heroes and Ireland, herself, evolving from primitive terror in the night, to damsel in distress, to wily-but-tired old woman. Without Ireland's many grievances against England, we never would have had one of the most famous monsters in literature; the bloodsucking vampire! If you have two minutes, I highly recommend Maud Gonne's The Famine Queen, two pages of positively scathing satire and political commentary on Victoria's reign throughout the 19th century.
The Act of Union was a product of a series of factors. From the 1780s Ireland had increased its political freedom of manoeuvre through legislative independence and was experiencing a successful economy involving early industrial development such as in the linen industry. Pitt's 'Commercial Propositions' were intended to create a free trade zone between Ireland and Britain but these were defeated by Irish and British interests. The problem remained of how to avoid Ireland drifting away from the British sphere of influence. The war with France and the Rebellion of 1798 made this a pressing issue of national security. The Act of Union was intended to protect security while offering concessions in terms of free trade and religious reform. Pitt convinced the Catholic Church to support the Union with the promise of Emancipation (IE that Catholics could be elected to parliament). In the event this was vetoed by the King leading to a sense of betrayal. As Patrick Geoghegan showed, actually getting the Union through the Irish House of Commons required extensive bribery and government influence.
There is a long standing debate over the economic effects of the union. Nationalists have traditionally seen it as a disaster which prevented Ireland from developing its industries in competition with Britain. George O'Brien (probably the leading Irish economist of the 1920s) developed this view. More recent economic historians have not been kind to this however. Johnson and Kennedy have argued that there is little evidence that political decisions were important and that Irish industry was just overwhelmed by British competition. Ó Gráda tends to support this view.
There is a lot of reading available,
Patrick Geoghegan, The Act of Union tells the story of how the act passed,
Alvin Jackson, The Two Unions is a comparative study of the Irish and Scottish unions.
Dáire Keogh and Kevin Whelan, (eds) Acts of Union is a good collection of essays as is Brown, Geoghegan and Kelly (eds), The Irish Act of Union
Cormac Ó Gráda, Ireland a New Economic History is a good introduction to the economic issues
I hope you don't mind me asking but is this an assignment? If it is I'll happily recommend some reading but I won't give a full answer.