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The following OECD assessment and recommendations summarise chapter 4 of the Economic Survey of Ireland published on 4 November 2009.
More can be done to promote sustainable long-run growth
After the severe economic adjustment, Ireland’s potential output is likely to be permanently lower and recent developments call into question how much of the good performance over the most recent years was structural rather than cyclical. This underlines the importance of policy settings that promote sustainable long run growth. Policies to boost competition in the sheltered services sector would make the economy more efficient in the long run, but would also contribute more immediately to reducing costs and improving international competitiveness. The effectiveness of competition law should be enhanced. Restrictions and barriers to competition should be removed in the electricity market, the retail sector, doctors, pharmacies, the licensed trade, the legal professions and bus transport. To increase retail competition, planning laws should be changed to remove barriers to entry and facilitate new types of store.
Further investment in infrastructure and human capital are needed to continue improvements in productivity. Public investment has been exceptionally high in recent years. Given the immediate pressures on the public finances, government spending in these areas may be moderated over the coming years, albeit remaining at relatively high levels. It should be subject to rigorous prioritisation through cost-benefit analysis and adaptation in the light of the changed economic outlook. User charges should be applied more widely. Tax credits for research and development (R&D) have been increased: the cost effectiveness of this support should be evaluated and direct support should be concentrated in fewer centres of world class excellence and with improved coordination between researchers and industry.
How to obtain this publication
The complete edition of the Economic Survey of Ireland is available from:
The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.
For further information please contact the Ireland Desk at the OECD Economics Department at email@example.com.
The OECD Secretariat's report was prepared by Sebastian Barnes under the supervision of Patrick Lenain. Research assistance was provided by Annette Panzera and Joseph Chien.