Bringing Domestic Institutions Back into Understanding Ireland’s Economic Crisis

The Irish economy has had one of the worst experiences of economic crisis within the EU since the onset of international financial crisis in 2007/8. That the crisis has an international dimension is beyond question. What needs to be explored further is the contribution of domestic political factors which weakened the capacity of the Irish political system to respond and which exposed Ireland to a worse crisis than might otherwise have occurred. Three institutional clusters are analysed: the political priorities and decision-making routines underlying the Irish growth model; the configuration of the public administration system; and the management of the domestic cost base. In all three, urgent priorities for reform are identified. The paper does not advocate reform of the electoral system, which tends to attract more media attention than is warranted. Rather, it argues that energy and intelligence needs to be devoted to reforming the quality of decision-making, limiting government’s fiscal discretion, and opening up transparency in the distribution of the costs of adjustment.