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IRELAND
WORLD RANK:
9
REGIONAL RANK:
3
ECONOMIC FREEDOM STATUS:
MOSTLY FREE
I
reland’s economic fundamentals remain strong, well supported
by solid protection of property rights and an independent
judiciary that enforces the rule of law effectively. Commitment
to open-market policies that facilitate global trade and investment flows has been well institutionalized, and the economy has
demonstrated admirable resilience in the face of recent years’
international and domestic challenges.
Undertaking politically difficult reforms, including sharp cuts in
public-sector wages and restructuring of the banking sector, Ireland has regained its macroeconomic stability and competitiveness. With the management of public finance back on a sounder
footing, the deficit is declining, although the level of public debt
remains quite high.
ECONOMIC FREEDOM SCORE
76.7

( ▼ DOWN 0.6 POINT )
0
50
60
70
80
60.9
68.0
WORLD AVERAGE
NOTABLE SUCCESSES:
Rule of Law, Open Markets, and
Regulatory Efficiency
100
REGIONAL AVERAGE
(EUROPE REGION)
CONCERNS:
Government Spending and
Fiscal Health
OVERALL SCORE CHANGE
SINCE 2013:
+1.0
QUICK FACTS
FREEDOM TREND
90
80
70
60
POPULATION:
4.6 million
UNEMPLOYMENT:
9.5%
GDP (PPP):
$257.4 billion
7.8% growth in 2015
5-year compound
annual growth 3.4%
$55,533 per capita
INFLATION (CPI):
0.0%
FDI INFLOW:
$100.5 billion
PUBLIC DEBT:
78.7% of GDP
50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
2015 data unless otherwise noted. Data compiled as of September 2016
BACKGROUND: Prime Minister Enda Kenny of the center-right Fine Gael heads a minority government
after losing a parliamentary majority in February 2016 elections. Ireland’s highly industrialized economy
performed extraordinarily well throughout the 1990s and most of the 2000s, encouraged by free-market
policies that attracted investment capital, but the burst of a speculative housing bubble in 2008 generated
a financial crisis. The 2010 National Recovery Plan was implemented after the government nationalized
several banks, and Ireland accepted a $90 billion European Union–International Monetary Fund rescue
package. Widening economic disparities between Dublin and the rest of the country have become a
source of political debate.
244
2017 Index of Economic Freedom
KEY:
WORLD AVERAGE
12 ECONOMIC FREEDOMS | IRELAND
RULE OF LAW
15th
GOVERNMENT SIZE
15th
12th
100
100
80
80
70
70
60
60
50
50
122nd
124th
72.7
57.1
60.3
Tax
Burden
Government
Spending
Fiscal
Health
Rank

131st
0
85.8
78.3
78.3
Property
Rights
Judicial
Effectiveness
Government
Integrity
REGULATORY EFFICIENCY
28th
31st
The top personal income tax rate is 41 percent, and
the top corporate tax rate is 12.5 percent. Other taxes
include a value-added tax and a capital gains tax. The
overall tax burden equals 29.9 percent of total domestic income. Government spending has amounted to
37.8 percent of total output (GDP) over the past three
years, and budget deficits have averaged 3.7 percent
of GDP. Public debt is equivalent to 78.7 percent
of GDP.
OPEN MARKETS
5th
100
100
80
80
70
70
60
60
50
50
0
80.3
73.6
87.6
Business
Freedom
Labor
Freedom
Monetary
Freedom
The streamlined regulatory process is very conducive to dynamic investment and supports business
decisions that enhance productivity. The nonsalary
cost of employing a worker is low, and the severance
payment system is not overly burdensome. In November 2015, the government rejected calls to impose
rent controls but did act to restrict landlords to rent
increases every two years instead of annually.
IRELAND
Property rights are well protected, and secured
interests in property are recognized and enforced.
Contracts are secure, and expropriation is rare.
Ireland’s legal system is based on common law, and
the judiciary is independent. Allegations of outright
public corruption are investigated and prosecuted, but
cronyism remains a recurring problem that affects all
levels of Irish politics.
0
0
20th
2nd
17th
87.0
90.0
70.0
Trade
Freedom
Investment
Freedom
Financial
Freedom
Rank
Trade is extremely important to Ireland’s economy; the value of exports and imports taken together
equals 222 percent of GDP. The average applied tariff
rate is 1.5 percent, and there are relatively few barriers
to international trade and investment. Recapitalization
and restructuring have taken place to restore banking-sector stability. The state still retains its ownership
in banks, but there has been some divestment.
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245