This chapter applies the OECD Rural Well-Being Framework and OECD Principles on Rural Policy to analyse rural development policy in Ireland. The assessment finds that the Irish approach is conceptually sound and demonstrates genuine whole-of-government ambition, especially ORF, but implementation faces structural challenges. The analysis reveals that policy targets need greater spatial differentiation to reflect rural diversity, implementation is constrained by fiscal and administrative centralisation, and monitoring systems require stronger outcome metrics that capture rural people's lived experiences. The chapter identifies opportunities to strengthen the next phase of Irish rural policy through greater focus on understanding rural economic ecosystems, incorporating more typology-based planning, and enhancing subnational co-ordination.
Rural Policy Review of Ireland 2026
Abstract
When the OECD Rural Well-Being Framework (2020[1]) and Principles on Rural Policy (2019[2]) are used to assess Irish rural policy as set out in Our Rural Future (ORF), it is clear that the core policy framework is both conceptually strong and fully aligned with OECD principles on well-being and spatial differentiation.
Ireland has: ample fiscal capacity at the national level; a growing population, including in rural areas; successful agricultural and tourism sectors; significant foreign investment, including a rural presence; and a range of community development and economic development policies, but translating these into integrated, cross-sectoral policy remains uneven.
Full implementation of the policies outlined in ORF is challenged by: a governance system that provides scope for local action but limited discretion; ongoing barriers to cross-sectoral policy coherence; and an underutilisation of the capacity that exists at the local authority (LA) level.
Ireland’s economic and environmental goals are advancing. Yet gaps remain in realising the full potential of Ireland’s rural people and places, which require activating rural labour markets, diversifying entrepreneurship and embedding resilience at the local level, guided by functional realities.
ORF’s breadth demonstrates genuine whole-of-government ambition, but its impact now depends on deepening subnational capacity, strengthening spatial intelligence and turning co‑ordination into measurable outcomes.
A central theme in OECD rural development work is that rural policy should enhance well-being across economic, social and environmental dimensions while sustaining or growing rural populations. Ireland appears committed to this agenda (OECD, 2020[1]). Unlike several OECD members, Ireland has actively invested in rural development, building a set of national mechanisms that complement European Union (EU) instruments such as the Common Agricultural Policy (CAP), Cohesion Funds and regional policy programmes. Chapter 2 described the current state of rural Ireland through data analysis and international benchmarking, highlighting its diversity, opportunities, vulnerabilities and untapped potential. Chapter 3 traced the evolution of rural policy, from early frameworks such as the White Paper on Rural Development to the creation of the Department of Rural and Community Development (DRCD), now the Department of Rural and Community Development and the Gaeltacht (DRCDG), as an independent entity.
This chapter provides a constructive assessment of what has been achieved in Ireland to date. It applies the OECD Principles on Rural Policy (2019[2]) and the Rural Well-being Framework (OECD, 2020[1]) to assess both the strategy and the broader system that supports its delivery. The analysis moves beyond intent to ask:
Where can Ireland go further?
What should be prioritised next?
What future challenges or shocks might the current model not yet fully address?
What partnerships or governance reforms could enable a more resilient, forward-looking approach?
Ireland is among the first Members to use the OECD Principles of Rural Policy to guide national rural strategy. This assessment therefore offers lessons both for Ireland and for other countries seeking to translate the principles into practice.
The chapter is organised as follows: the first section introduces the OECD’s core frameworks for rural policy analysis, which form the basis for assessing ORF. Subsequent sections examine, in turn, the policy objectives, targets, implementation and tools (monitoring and engagement) underpinning the strategy, drawing on quantitative evidence and stakeholder insights. Together, these elements provide an integrated view of the strengths and weaknesses of Ireland’s current rural development model.
Promoting rural development poses numerous policy and governance challenges because it requires co‑ordination across sectors, across levels of government and between public and private actors. OECD countries have experienced noticeable shifts in their approaches to accommodate such important challenges (OECD, 2022[3]). To assess Ireland’s rural development approach, this chapter draws on the OECD Principles on Rural Policy and Rural Well-being Framework: together, they offer a structured basis for evaluating the objectives, governance approach and delivery mechanisms of rural strategies.
The OECD Principles on Rural Policy
The OECD Principles on Rural Policy, informed by over 20 years of work through the OECD Working Party on Rural Policy, provide the first multilateral guidelines for effective rural development. The principles were endorsed by ministers at the 7th OECD Roundtable of Mayors and Ministers Meeting held in 2019 by the OECD Regional Development Policy Committee (RDPC) in Athens (OECD, 2019[2]). The principles encourage governments to view rural areas as dynamic regions of opportunity and outline how to organise policies across sectors and levels of government. The key areas of focus include:
Harnessing and valorising rural assets, including recreational, ecological, agricultural and cultural resources.
Boosting the competitiveness of tradeable sectors and supporting innovation in rural enterprises.
Improving the accessibility and quality of public services for rural residents.
Recognising that rural development policies are not just a response but a proactive solution to economic, social and environmental challenges.
Source: OECD (2019[2]), OECD Principles on Rural Policy, https://www.oecd.org/fr/regional/oecd-principles-rural-policies.htm.
Towards the OECD Rural Well-being Framework
OECD countries have developed more innovative governance structures and policy instruments to better support rural development (Figure 4.1). The 2006 OECD New Rural Paradigm (NRP) recognised that governments were gradually decoupling rural development from agriculture, instead focusing more on places rather than sectors and prioritising investments over subsidies, a shift reflected in Ireland’s White Paper (OECD, 2006[4]). In 2018, the OECD released Rural 3.0: A Framework for Rural Development, which refined the NRP and called for stronger implementation mechanisms to position rural regions as engines of prosperity (OECD, 2018[5]).
The 2020 publication Rural Well-being: Geography of Opportunities further enhanced these frameworks by encouraging governments to view rural regions as “places of opportunity”, develop policies that put people first and address the three pillars (Table 4.2) of well-being: economic, social and environmental (OECD, 2020[1]).
In 2025, the OECD released its latest framework, Reinforcing Rural Resilience (OECD, 2025[6]) at the 2025 Regional Development Policy Committee (RDPC) ministerial meeting. This newest framework is also consistent with the OECD principles. It places greater emphasis on better understanding the opportunities and challenges of megatrends, including demography, digitalisation, globalisation and climate change, to increase rural resilience.
Source: OECD (2020[1]), Rural Well-being: Geography of Opportunities, https://doi.org/10.1787/d25cef80-en.
OECD rural framework
The OECD Principles on Rural Policy and Rural Well-being Framework provide a structured approach to assess whether rural development strategies in Ireland are effective in improving well-being standards across different types of rural regions and are fit for the future. The principles offer a normative framework for what effective rural policy should aspire to: maximising local potential, supporting inclusive governance, enabling innovation and ensuring sustainability. They are grouped into four interrelated dimensions, policy objectives, policy focus, policy approach and policy tools, to allow a systematic exploration of what policies aim to achieve, how they operate, for whom and under what institutional arrangements (Figure 4.2).
Policy objectives: Turning rural potential into measured outcomes. What are the goals of rural development policy? (Principles 4, 5, 6 and 8: fostering well-being, leveraging global and digital transitions, creating rural employment).
Policy targets: Getting “rural” right – Definitions, functions and delivery. Where and how are policies targeted? (Principles 1, 2, 3 and 7: differentiating between types of rural territories and strengthening rural-urban connections)
Policy implementation: Towards an evidence-led place-based approach. How are multi-level governance structures enhancing coherence, integration and collaboration? (Principle 9.).
Policy tools (monitoring and engagement): Turning strategy into delivery, refining instruments for co‑ordination and impact. How are stakeholders engaged, rural voices activated and heard, and outcomes monitored and evaluated? (Principles 10 and 11).
ORF and the DRCDG are not assessed in isolation. Rather, ORF is used as a strategic entry point to learn more about Ireland’s rural development landscape and the diversity of policies that exist. It is assessed acknowledging the complex governance environment. It seeks to help the DRCDG understand where it can act: directly, through funding, training or strategic leadership, or indirectly, by cultivating more rural intelligence, producing evidence or supporting co‑ordination. This includes reinforcing the DRCDG’s role in providing insights that help other departments better understand how their actions affect rural outcomes. The following sections assess ORF and Ireland's rural development system across the four dimensions of the OECD framework.
Policy objectives are the right place to start, because they can help clarify what a strategy is trying to achieve. Principles 4, 5, 6 and 8 provide a signpost for rural policy objectives. While each raises a number of specific aspects, there is a common thread that connects them and resonates with the objective of ORF. Specifically, these principles emphasise: improving well-being for rural people across economic, social and environmental dimensions (Principle 4); creating an enabling environment that allows rural areas to identify and invest in their competitive advantages (Principle 5); and supporting entrepreneurship, job creation through technological innovation, and the integration of local SMEs into value chains with improved access to capital and training (Principle 6). Finally, Principle 8 strengthens the social, economic, ecological and cultural resilience of rural communities by ensuring sustainable management of natural capital, land use, and climate change adaptation. Despite Ireland’s strong economic performance, marked by near-full employment, solid social outcomes and generally good health, challenges persist, particularly in rural areas that are often overlooked. The at‑risk-of-poverty rate is lower in urban regions than in rural regions, while the deprivation rate is relatively similar across both (see Figure 4.3, Panel A). The lower at-risk-of-poverty rate in urban areas is expected, as this indicator measures the share of individuals with an equivalised disposable income below 60% of the national median, and wages are typically higher in urban settings. However, the deprivation rate remains similar because individuals can experience material deprivation even if their income is above the poverty line, often due to high living costs, such as housing expenses in Dublin.
This dynamic is also reflected in the consistent poverty rate, which combines both income poverty and material deprivation: although urban areas generally show lower consistent poverty rates than rural areas, the gap is much narrower than when considering the at-risk-of-poverty rate alone (Figure 4.3, Panel B). Among the regions, the South-East stands out with a relatively high consistent poverty rate of 10.1% in 2019, although this represents an improvement of 1.4 percentage points compared to 2009. ORF has not yet addressed these indicators, but this could be included in the next iteration.
Note: The at-risk-of-poverty rate refers to the share of individuals with an equivalised disposable income below 60% of the national median income. The deprivation rate captures the share of individuals experiencing enforced deprivation, meaning they are unable to afford at least three out of nine basic items. The consistent poverty rate combines individuals who are both at risk of poverty and experiencing enforced deprivation.
Source: Regional Development Monitor.
Adopt a broader perspective on how to grow the economy
The Government of Ireland needs to adopt a broader perspective on how to increase economic growth. To date, Ireland has emphasised foreign direct investment (FDI) and export-oriented domestic manufacturing as drivers of national growth. In rural areas, these have been supplemented by the promotion of international tourism and the modernisation of export-oriented farming, particularly the dairy industry. There is clear evidence that this has been effective in some rural areas where foreign branch plants create significant direct employment. In addition, domestic SMEs in some rural areas have been able to develop significant export markets. The Botox plant in Westport, County Mayo, operated by Allergan/AbbVie exemplifies the former and the dairy pharmaceutical supplement firm in Roscommon the latter. Rural tourism is the main driver of international tourism in Ireland and the Kerry Gold brand of dairy products is known around the world.
However, there is room to develop greater economic diversification. FDI in rural Ireland carries concentration and exposure risks that can create localised volatility if a major plant downsizes or relocates and multinational firms can re-evaluate their investment at any time (OECD, 2023[7]). Similarly domestic manufacturers access to international markets hinges on terms of trade remaining favourable and markets for their products staying stable. International tourism is also vulnerable to shifts in demand. For example, the Coronavirus disease 2019 (COVID-19) pandemic brought tourism to a standstill. Over time, tourism is subject to shifts in what people want to experience (UNWTO, 2020[8]). Agricultural exports, even branded ones, are also subject to the same variability as other manufactured goods, as well as to changes in the CAP. A more resilient economic model for rural areas requires diversified, locally embedded growth that is less exposed to external shocks. Poland’s Strategy for Responsible Development offers a relevant example of how to broaden the rural economic base. It aims to improve conditions for entrepreneurship, increase opportunities for employment beyond agriculture, enhance access to public services, raise professional qualifications and support intersectoral mobility (Box 4.1).
The Strategy for Responsible Development is Poland’s initiative to improve entrepreneurship conditions, increase residents’ access to jobs outside of agriculture, increase the availability of public services, improve professional qualifications and intersectoral mobility. Poland’s rural areas face many risks such as depopulation, public service insecurity and increasing intra-regional disparities. To address this, the biggest policy focuses are to bring knowledge to rural areas and build networks. This supplements both national and EU financial support to encourage the capacity building necessary for rural households to diversify away from farming and engage in activities necessary in the current context such as support of the EU Green Deal.
The European Fund for the Development of Polish Villages is an intergovernmental organisation carrying out research and several initiatives to support non-agricultural economic activity, local communities and investment in human capital. Some initiatives include:
The Development Initiatives Forum, which includes various reports and conferences dedicated to living in rural areas, notably discussion on the EU CAP and a co-financed report monitoring the development of rural areas in Poland.
Micro loans for non-agriculture activity, small business loans and agrotourism loans for rural areas. These schemes have established 15 000 workplaces and assisted 35 000 existing workplaces. They have also helped create 4 500 new beds for overnight stays in agrotourism in Poland.
An education initiative to address market needs and increase capabilities such as the Winter Holidays with Economy programme, which includes classes on finance, economics and knowledge of Poland’s national bank. This programme has reached 15 000 young people.
Source: OECD (2023[9]), “OECD Principles on Rural Policy Dialogue Series: Poland (Principle 6)”, OECD, Paris.
Create an enabling environment in rural areas
Principle 5 shifts the focus towards creating an enabling environment that allows rural areas to identify and invest in their unique competitive advantages, particularly those tied to tradeable sectors and value-added rural assets. Yet, this enabling environment is not a standalone construct: it is intrinsically connected to well-being. Fostering well-being is inseparable from creating the institutional, infrastructural and economic conditions needed for rural success.
Digital connectivity is a case in point. Ireland has made tangible strides in expanding rural broadband infrastructure. However, connectivity investment should be purposefully linked to economic strategies that reflect local realities, whether enabling remote work or enhancing access to e-commerce. In this way, the enabling environment is not simply about providing tools, but about ensuring those tools are relevant to, and supportive of, the distinctive economic fabric of rural Ireland. The rollout of the National Broadband Plan has been very successful. Almost all of rural Ireland now has access to high-quality broadband. While the plan aimed to facilitate remote working and reduce carbon emissions better broadband also provides local entrepreneurs and existing SMEs with new opportunities that extend beyond original objectives.
Tourism provides another example. The sector is vital to Ireland’s economy and a major driver of activity in rural areas. Per capita, most overnight stays are recorded in rural regions such as Border, with around 20 000 overnight stays per 1 000 inhabitants in 2023 (Figure 4.4, Panel A). Compared to the 27 European Union member states (EU27) average, tourism intensity, measured by overnight stays per 1 000 inhabitants, is lower in Irish large metropolitan regions but higher in all other regions. In the EU27, around 55% of overnight stays were from domestic tourists, whereas tourism in Irish regions relies more heavily on overseas visitors. For example, in the Border region, foreign tourists accounted for about 77% of all overnight stays (Figure 4.4, Panel B).
Source: Eurostat.
Tourism also experienced a strong rebound after COVID-19, with overnight stays quadrupling in both large metropolitan and rural remote regions between 2020 and 2023 (Figure 4.5). The policy measures led by the Department of Enterprise, Tourism and Employment (DETE) and included in ORF are designed to capitalise on these opportunities. International tourists typically fly into Dublin but travel extensively across the country, particularly into rural regions (Figure 4.4). As such, tourism represents a key lever for local economic development in rural places supporting job creation and stimulating broader investment.
However, the structure of rural tourism has some built-in limitations, particularly in relation to the prevalence of group coach and bus tours. This is a distinct sector comprising escorted touring holidays and short day or overnight trips originating mainly from urban centres, which has grown over time with improved inter‑urban roads and Dublin-centric arrivals that make day trips to rural attractions more feasible. Dependence on coach tours varies across rural Ireland. For example, the Burren and the Cliffs of Moher experience heavy day-tour volumes arriving by coach, sites along classic coach circuits such as the Ring of Kerry and Killarney corridor show similar patterns of reliance, while more dispersed or accommodation-limited rural areas attract fewer coach visitors and depend more on self-drive tourists (Fáilte Ireland, 2019[10]).
For rural areas more reliant on bus tours, tourist spending is constrained not only by limited time in each locality but also by physical space. Visitors can only purchase what they can transport on the bus, which restricts opportunities to buy larger or higher-value local goods. At the Burrren and the Cliffs of Moher, analysis revealed low local spending due to short dwell times as well as visitor management challenges (Fáilte Ireland, 2019[10]). This raises important questions about the depth of economic benefit captured by local rural businesses from this form of tourism.
Growth in overnight stays by region type from 2020‑23, 2020=100%
Source: Eurostat.
The OECD emphasises that rural tourism can drive job creation, support SMEs, increase local income and diversify rural economies (OECD, 2024[11]). However, this can be hampered by inadequate infrastructure, limited financial resources and declining local populations. In Ireland’s case, the tourism strategy rightly seeks to extend rural reach (Box 4.2), but its success depends on both the attractiveness and diversity of tourism offerings the surrounding infrastructure (e.g. transport connectivity, accommodation capacity, the range of local retail and hospitality services) and strategies to encourage longer visitor stays. If these surrounding conditions are not addressed in tandem, results will remain suboptimal.
Fáilte Ireland announced the first round of EU Just Transition Fund Investment Grants in June 2024, a significant step towards supporting sustainable economic development and job creation across Ireland in its support of the post-peat regions. Under the the Regenerative Tourism and Placemaking Scheme, Fáilte Ireland (ROI)/Tourism approved EUR 27.1 million in investment grants for 22 projects. . It is a scheme to incentivise private and community micro enterprises with market activity levels to expand or develop economically diverse local initiatives such as innovation hubs, innovation labs and technology centres, heritage tourism and green energy projects as well as community tourism networks.
Under the EU Just Transition Fund, Fáilte Ireland has been tasked with the administration of EUR 68 million for a Regenerative Tourism and Placemaking Scheme 2023‑2026. This investment in the sustainable development of tourism in the Midland region seeks to diversify the regional economy by creating jobs, supporting habitats and biodiversity and sustaining communities. There are two main elements to the overall scheme:
1. EUR 38 million towards the diversification of the regional economy through the sustainable development of tourism
2. EUR 30 million towards the regeneration and repurposing of peatlands through the development of a network of trails.
These projects are explicitly intended to support regenerative tourism by using Ireland’s natural and cultural capital while supporting environmental stewardship and inclusive economic participation across all levels of society. To support the place-based delivery of these programmes, eight County Tourism Activators, one per county territory, were granted to work with the aim of high-performing tourism clusters and local business networks that will directly work towards regional development strategies and enterprise collaboration. The scheme includes measures included in Ireland’s inaugural Territorial Just Transition Plan. It describes the economic and social implications of an end to extracting peat for energy and lays out alternative pathways for newly affected regions. Linking climate adaptation and heritage protection to economic transformation demonstrates pronounced rural policies that are visionary and rooted in local potential.
Source: OECD (2024[12]), Ireland, OECD Background Report, OECD, Paris.
Targeted employment creation strategies
Principle 6 puts the focus squarely on employment creation and entrepreneurship as levers for economic development in rural areas. Ireland has a national enterprise strategy, the 2022-2030 White Paper. This strategy includes specific commitments to job creation and employment rates and regionally balanced approach, which complements the efforts of ORF. Figure 4.6 provides a look at the employment patterns in Irish regions according to the OECD typology. It shows broad sectoral similarities across Irish regions, except for agriculture, which is absent in Dublin.
Interestingly, even a sector typically associated with rural affairs, like agriculture, accounts for employment to varying degrees across different regions. For example, while there is no agricultural-related employment in the Dublin region the Mid-East, part of the OECD’s large metropolitan region typology, still accounts for 3% of employment. Similarly, the agriculture sector accounts for 8% of employment in the Midland, 10% in the Border regions, and 8% in the West. the Midland (8%), Border (10%), and West (8%) regions. These regions are not uniformly rural in population or economic structure. Furthermore, between 2001 and 2021, employment either declined or increased the least in the two sectors most dominant in rural areas: agriculture and manufacturing (Figure 4.7). Notably, Midland was the only region to experience an increase in agricultural employment during this period, with a rise of 20%. Similarly, the West was the only region to see a growth in manufacturing employment, with an increase of 21%.
Principle 6 also encourages a policy focus that reflects the territorial nuances of how jobs are distributed and accessed. ORF includes strategies to grow jobs and foster innovation in rural regions. For example, IDA Ireland intends to make 400 regional investments, bringing FDI to rural places by building advanced technology. This target is complemented by the Regional Enterprise Plans. The Regional Enterprise Plans support enterprise development and job growth in the regions. However, plans must also consider rural labour-market conditions, infrastructure and the uneven geography of sectors like agriculture, even within urban-leaning regions, to assess the effectiveness of these strategies. Capturing these subtleties is essential if Ireland is to meet its employment targets in a way that is inclusive of all places. The Regional Technological Universities in regional towns represent important infrastructure for place-based skills development and regional innovation. They could also be supported to tease out some of these elements in regional and local strategies.
Employment distribution across sectors in 2021
Note: Sectors are based on Statistical Classification of Economic Activities in the European Community (NACE) 2-digit industries. Some sector names have been shortened, full titles include: “Public administration, defence, education, human health and social work activities”, “Arts, entertainment and recreation; other service activities; activities of household and extra-territorial organizations and bodies”, and “Professional, scientific and technical activities; administrative and support service activities”.
Source: Based on the OECD Regional Database.
Employment change from 2001-21
Note: Sectors are based on NACE 2-digit industries. Some sector names have been shortened, full titles include: “Public administration, defence, education, human health and social work activities” and “Professional, scientific and technical activities; administrative and support service activities”.
Source: Based on the OECD Regional Database.
Fostering entrepreneurship
There are structures in place to support and foster entrepreneurship in rural Ireland. Local enterprise offices (LEOs) are tasked with supporting nascent entrepreneurs. In 2022, the LEOs contributed to job growth in Ireland by supporting thousands of jobs across all regions, with a disproportionately strong impact in rural regions, leading to a net increase in employment (Figure 4.8, Panel A). When accounting for population size, it is also clear that regions such as Border and Midland benefit from LEO support (Figure 4.8, Panel B), which provided around 1 to 2 additional jobs per 1 000 people.
Source: Regional Monitor
At the same time, LEOs have some built-in limitations that could hinder their ability to support certain entrepreneurs. LEOs provide broad non-financial support across sectors. However, their financial grants are constrained by eligibility criteria that preferences manufacturing and internationally traded service firms and the objective of direct exporting or capacity to become significant exporters in the future (LEO, 2025[13]). This leaves a significant number of rural entrepreneurs, particularly those oriented toward local markets, outside the scope of formal support. For example, businesses engaged in “displacement activities” such as hairdressers, cafes, pubs and professional services, do not qualify for financial support from LEOs, though they may access advice and training (LEO, 2025[13]).
In rural areas, the community-led approach LEADER programme has been able to provide support to micro businesses, but their capacity to fund these activities varies. A substantial portion of LEADER budgets goes to community development, rural infrastructure and social inclusion, which means that direct financial support for micro businesses is just one component among many competing priorities (Roscommon LDC, 2025[14]). Local action groups determine allocations based on locally developed strategies, but the business or enterprise strand is always constrained by the overall size and multi-purpose nature of LEADER’s funding. The Irish Local Development Network argues that the decline in LEADER resources over the years limits the scale of support for enterprise, tourism and community projects (ILDN, 2021[15])
Furthermore, while LEOs are effective in supporting start-ups, there is currently little support available for second-stage investments, i.e. for firms that are already operating and now need to scale up. Yet these are often the most reliable drivers of local economic growth. Such businesses have already demonstrated their viability and, as they grow, they tend to increase local employment and source more inputs locally, creating positive spillovers throughout the rural economy. LEOs are structured to provide a standardised suite of supports to micro enterprises. Core eligibility, available grant types and strategic priorities are set at the national level. This limits the ability of LEOs to adapt programming and financial support to unique local economic contexts. This is particularly problematic given, the significant heterogeneity in local conditions for SME and entrepreneurship activity and the overall divide between the major urban regions (Dublin and South-West) and the rest of the country (Government of Ireland, 2024[16])
Poland offers a relevant comparative example. Faced with rural depopulation, intra-regional disparities and low access to services, national and local actors have invested heavily in strengthening rural knowledge networks and enabling non-agricultural entrepreneurship. These efforts are supported by the European Fund for the Development of Polish Villages, an intergovernmental organisation that implements initiatives ranging from micro loans and agrotourism financing to rural education programmes targeting youth entrepreneurship (see Box 4.2).
Other factors that affect entrepreneurship
Rural entrepreneurship policy must go beyond surface-level interventions. It needs to tackle structural disincentives and tailor support to the realities of rural labour markets. Stakeholder discussions suggested that easy access to well-paid jobs in multinational enterprises when combined with a burdensome regulatory environment is fostering a more risk-averse culture. This dynamic appears to dampen entrepreneurial ambition, particularly in rural regions. Further research is warranted to better understand and target the conditions that enable rural enterprise creation.
Additionally, fostering entrepreneurship in rural areas is not simply about encouraging new business formation: it requires a grounded understanding of the existing SME landscape, the sectors they operate in and the barriers they face. Rural labour markets differ from urban labour markets in terms of unemployment rates, wage levels, professional opportunities and workforce qualifications (Fassmann, 2001[17]). Applying a spatial lens is critical: the entrepreneurial landscape in rural areas adjacent to urban ones differs markedly from that in remote or island communities, both in terms of opportunity and constraint.
Understanding the needs of SMEs in rural regions
While Ireland has shown ambition in supporting entrepreneurship, the real question is whether policy design sufficiently accounts for the heterogeneity of rural SMEs (Figure 4.9). Many rural enterprises are not export oriented. They are smaller, more locally embedded and more reliant on microfinance than their urban or FDI-driven counterparts, but they play a central role in local economies and are often important suppliers to those firms that export. This raises important questions around resource allocation and equity of access to support mechanisms.
While LEOs claim to provide essential support, evidence from stakeholders suggests that many rural entrepreneurs still face barriers in accessing finance, navigating regulatory requirements or securing tailored mentorship. This reveals a tension between the national policy narrative and the lived experience of small-scale entrepreneurs. Without a clearer view of how the rural economy functions in practice, and where its entrepreneurial potential lies, interventions risk privileging sectors and business models that are already well supported, while masking gaps in support for more fragile or emergent local enterprises. Better understanding and addressing this disconnect would strengthen the next iteration of Ireland’s rural policy framework and help it more fully support diversified, inclusive, and spatially sensitive rural growth.
Source: Regional Monitor
Access to finance
Access to finance remains a significant challenge for SMEs across Ireland, including those in rural areas. While some support exists for start-ups, such as grants and initial capital contributions, second-stage capital is often harder to obtain. As firms begin to grow, their capital needs increase, yet many are expected to turn to commercial lenders who may be unwilling or unable, due to regulations, to assume the full risk (Degryse, Matthews and Zhao, 2018[18]). A financing gap emerges when profitable, growth-ready firms lack the cash reserves to co-finance investments, and when commercial banks are only willing to finance part of the risk. In such cases, unless firms can secure a subordinated investor or equity injection, their expansion plans are stalled. Equity capital and subordinated debt are both scarce in rural Ireland and, while there are models available to address this, uptake remains limited. This scarcity is not due solely to investor reluctance based on geography but also reflects the fact that the concentration of private venture capital and angel networks are in urban hubs, as well as the limited pipeline of rural businesses that are “equity ready” for such investment (Kennedy, 2025[19]). The Western Development Commission (WDC) is one of the few notable examples, providing venture and risk capital in rural western Ireland.
One potential solution would be the establishment of a local revolving loan fund similar to the WDC at the LA level, which would provide bridge financing between owner equity and traditional loans. These entities would require a one-time infusion of national capital into each LA (excluding predominantly urban ones). Unlike banks, the funds would be overseen by local boards composed of business leaders and community stakeholders and would be empowered to provide mezzanine financing to viable local firms. This type of funding, which sits between owner equity and conventional bank loans, is inherently higher risk and could command higher interest rates or an equity stake. But as long as the majority of investments are sound, the fund would remain sustainable. The key to success lies in strong fiduciary governance and a clearly defined mandate to support scalable, place-based rural firms.
Productivity
Overall, labour productivity is lower in rural regions compared to metropolitan areas. However, this gap is partly influenced by headquarter effects, which tend to inflate productivity figures in urban regions due to the concentration of high-value corporate functions (see Chapter 1). To reduce this distortion, the focus here is placed on rural regions, where such effects are less pronounced. Among rural areas, productivity is somewhat higher in NMR-S than in NMR-R regions (Figure 4.10, Panel A). Manufacturing shows the highest labour productivity per worker, followed by industry more broadly and the information and communication sector. In contrast, agriculture generally records below-average productivity levels. A notable exception is the South-East region, where agricultural productivity is more than twice as high as in other rural regions.
Looking at productivity growth over time, the South-East also stands out for having achieved the largest gains in agricultural productivity, which nearly tripled between 2001 and 2021 (Figure 4.10, Panel B). Manufacturing also recorded substantial productivity growth, particularly in NMR-S regions. In contrast, public administration experienced a decline in productivity across all rural regions. Meanwhile, Border and Midland not only reported lower overall productivity levels in 2021 but also showed weaker growth over the two decades compared to their NMR-S counterparts.
Note: Sectors are based on NACE 2-digit industries. Some sector names have been shortened, full titles include: “Public administration, defence, education, human health and social work activities”, “Arts, entertainment and recreation; other service activities; activities of household and extra-territorial organizations and bodies” and “Professional, scientific and technical activities; administrative and support service activities”.
Source: Based on the OECD Regional Database.
Initiatives led by the Department of Further and Higher Education, Research, Innovation and Science (DFHERIS), such as blended learning pathways and sectoral upskilling in manufacturing and renewables, demonstrate how targeted interventions can strengthen rural adaptability and build economic resilience over time. In Ireland, there are gaps in productivity that vary across and among urban and rural areas. However, in rural areas, the gaps can be more onerous. This reflects two things:
Local labour markets in rural regions are small and weakly connected to larger ones. This means that low-skilled individuals who are unemployed may only find work if they relocate – and even then, face strong competition in more dynamic urban markets. In Ireland, as in many other countries, relocation has been made harder by housing shortages that tend to lock people in place. In the Limerick, some firms in smaller places are resorting to renting housing prior to recruiting workers, as a way of increasing their success rate.
Upskilling is more costly and logistically challenging in rural areas. Training programmes often have high fixed costs and, in small rural populations, it is harder to recruit enough participants to make these viable. Conversely, the demand for any one skill in a rural labour market may be low, making employment prospects uncertain even after training.
On a positive note, those who do retrain may have improved job prospects upon relocating. However, this points to a deeper issue: if rural development strategies rely solely on labour mobility, they risk depopulating rural areas rather than empowering them. What is needed is a mix of remote training, localised job creation and investment in local skills pipelines that reflect actual demand.
Social enterprise can play a role in improving workforce skills
Another dimension of Principle 6 that is particularly relevant in the Irish context is the diversification of rural economies through targeted investment in entrepreneurship and skills, In rural areas, where labour markets are small in both workforce size and employment opportunities, a common dynamic emerges: a surplus of unskilled labour and a shortage of skilled workers. This mismatch leads to low participation rates among the unskilled and difficulties for local firms trying to fill skilled positions. While formal job training programmes can help, they are often less common in rural areas due to high per-participant costs. Social enterprise can play a pivotal role in improving workforce skills and linking people to employment, especially in areas with weak labour demand. Social enterprises are not typically used in this way, as highlighted by a study on their role in developing skills and creating employment opportunities in the United Kingdom (Box 4.3). Nonetheless, the potential to deploy them more deliberately, deserves further exploration.
However, Ireland is in a different position, the population in rural areas is growing which means, an increasing workforce pool. This creates an opportunity for Ireland that countries facing demographic decline do not always have. Ireland has made investments to support social enterprises in both urban and rural contexts, particularly in communities with low labour force participation, limited job opportunities and widespread skills gaps. There are an estimated 4 335 social enterprises in Ireland, employing 84 382 people, accounting for 3.7% of the total Irish workforce (OECD, 2023[20]). The Trading for Impact: National Social Enterprise Policy 2024-2027 is specifically designed to help cultivate and sustain strong and impactful social enterprises across Ireland (DRCDG, 2024[21]). Social enterprises aim to deliver goods or services to the market but do not seek to maximise profit. However, most are expected to cover their operating costs, as ongoing subsidies can distort markets and deter private enterprise participation.
A major advantage of social enterprise models is that they provide skills training in real working environments, which boosts employability and offers a “demonstration effect” that can encourage wider community participation. When a social enterprise’s objective includes training and transitioning individuals into better employment, whether in the private or public sector, it can be a strong candidate for temporary public support. Crucially, employment at such a social enterprise should be understood as transitional. The aim is for people to move into more standard forms of work once their skills are improved. By linking skill development directly with work experience and service provision, social enterprises can act as bridges, connecting underutilised rural talent to meaningful, locally rooted economic opportunities
The 2023 OECD report Boosting Social Entrepreneurship and Social Enterprise Development in Ireland noted limited awareness of social enterprises within the broader entrepreneurial ecosystem. One of the key recommendations from the report was for the Government of Ireland to promote the value added by social enterprises across the wider economic landscape (OECD, 2023[20]). Positioning them as a potential conduit for skill building and employment preparation could provide a meaningful entry point into that space. This would also help to “build a shared understanding of what social enterprises are and how they are part of the economic ecosystem, particularly among public officials and private sector stakeholders”, a shift that is needed to embed these organisations more fully in Ireland’s economic development efforts (OECD, 2023[20]).
A recent study on the role of social enterprises in the United Kingdom, with a specific focus on skills development for employment, shows that these organisations already make a significant contribution to both upskilling and job creation. The findings suggest that this impact could be even greater with the right policy and funding environment in place.
The report highlights the potential of social enterprises to support individuals from diverse, complex and disadvantaged backgrounds, particularly when they take an inclusive approach and reinvest profits locally. This approach offers a logical route for education and employment policy, especially in addressing the needs of people who are often left out of mainstream programmes.
It also argues that social enterprises should have a more prominent role in national skills and employment strategies, as they can offer more tailored and effective alternatives. However, the current policy environment remains largely unsupportive, to social enterprises taking on a more active part in driving the upskilling of the population and creating employment, despite the significant impact already generated by the sector.
Source: Hazenberg, R. (2021[22]), “The role of social enterprise in developing skills and creating employment opportunities in the UK”, https://www.enterpriseresearch.ac.uk/wp-content/uploads/2021/04/No50-The-role-of-social-enterprise-in-developing-skills-and-creating-employment-opportunities-in-the-UK-R.-Hazenberg.pdf.
Sustainable management of natural capital and climate adaptation
Principle 8 is focused on sustainable management of natural capital: land use, ecosystem services and the imperative of climate adaptation. ORF explicitly recognises climate action as a strategic priority, with commitments to becoming climate neutral and promoting mitigation efforts such as decarbonisation. The OECD Rural Agenda for Climate Action emphasises that achieving net-zero emissions requires tailored, place-based strategies and robust rural policies (OECD, 2021[23]). It also affirms the importance of preserving rural culture and tradition as part of a broader resilience agenda. This aligns with the mandate of the OECD Working Party on Rural Policy for 2020-2025 and the Regional Development Policy Committee Programme of Work and Budget both highlight the importance of rural policies for environmental issues (OECD, 2021[23]). Yet, the real test lies in how these aspirations are operationalised across varied rural geographies. Land, ecosystems and environmental services are not abstract assets: they are enmeshed with the rural economy, local livelihoods and cultural identity.
Rather than focusing solely on sector-specific outcomes, Ireland’s approach is increasingly shaped by the need for systemwide sustainability, ensuring rural areas can withstand, adapt to and recover from environmental, economic and social shocks, while preserving their cultural vitality and quality of life. Ireland’s Climate Action and Low Carbon Development (Amendment) Act 2021 provides a legally binding framework for achieving net-zero emissions by 2050. The introduction of five-year carbon budgets and successive climate action plans represents a growing national commitment to long-term sustainability. While the National Adaptation Framework 2024 and sectoral adaptation plans provide a legal and strategic backbone for national resilience planning, requiring sector-by-sector and region-specific actions to protect Irish society, economy and environment from both present and future climate-driven risks (DOE, 2025[24]). The plans promote climate proofing of emergency planning, sectoral co‑ordination, research, monitoring and the integration of adaptation into local zoning and development. They require ringfenced funding, ambitious and measurable objectives and a step-change in the level of prioritisation and resourcing across government.
This marks a shift toward a more integrated, future-oriented model of rural development. At the heart of this shift is a recognition that rural people and places are not peripheral to national progress but active contributors to Ireland’s low-carbon, resilient future, a perspective shared by the OECD Rural Agenda for Climate Action, which encourages an increased focus on policies that empower rural communities to lead transitions (OECD, 2021[23]) (see Box 4.4).
The OECD Rural Agenda for Climate Action identifies six mutually reinforcing areas through which rural regions can accelerate the transition to an environmentally sustainable, net-zero economy and leverage new development opportunities:
1. Strengthen the evidence base: Collect and consolidate regional and local data to assess how climate-related challenges and opportunities unfold across different rural contexts. Develop indicators that inform policymaking and improve communication to support rural transitions more effectively. This requires collaboration between local, regional and national actors to ensure that local perspectives are reflected in policy design and implementation.
2. Enable just and inclusive transitions: In line with the principle of just transition, empower rural regions to design and implement transition strategies, ensuring they have the necessary enabling conditions, knowledge, institutional capacity, good governance, digital infrastructure and funding. Support the attraction of private investment in innovative climate solutions where public financing alone is insufficient.
3. Leverage renewable energy potential: Build on the competitive advantage of rural areas in producing renewable energy by fostering local innovation ecosystems and linking them to emerging initiatives such as green hydrogen. Ensure that communities benefit directly from renewable energy projects through co-ownership or benefit-sharing arrangements with private investors.
4. Manage natural capital sustainably: Promote sustainable land-management practices and value creation from restoring, preserving and enhancing ecosystems. Strengthen integrated spatial and land use planning to reduce unsustainable development patterns (e.g. urban sprawl, biodiversity loss) and expand sustainable ones with strong carbon-sequestration and socio‑economic potential, such as agroforestry, climate-smart agriculture, ecotourism and sustainable forestry. Include local and Indigenous knowledge, invest in nature-based solutions (e.g. flood and drought management) and advance market mechanisms such as certification and payments for ecosystem services.
5. Promote the circular economy and bioeconomy: Encourage circular economy and bioeconomy models to reduce environmental pressures and enhance resource efficiency. These offer opportunities for new rural business models, innovation and markets, including through strengthened rural-urban linkages and active community participation.
6. Decarbonise rural transport and connectivity: Accelerate the shift to sustainable and innovative mobility solutions while investing in the required physical and digital infrastructure, such as renewable energy generation, green hydrogen capacity and high-speed Internet, to connect rural regions effectively and enable low-carbon development.
Maintaining landscapes is not only about ecology, it also underpins the tourism economy and food sector. Even though Ireland is likely to avoid the worst physical impacts of climate change due to its temperate location, Atlantic influence and absence of major heat/drought-prone regions, it is at risk from sea-level rise, coastal and inland flooding, erosion and water scarcity (EPA, 2025[25]). The policy response still carries major distributional consequences. For example, climate policy has accelerated the end of peat harvesting. Specifically, this policy imposes highly localised and concentrated economic and social costs on communities historically dependent on peat harvesting and associated industries in the Midlands and the West (Kelly, 2022[26]). But the potential for wind energy, especially off Ireland’s west coast, presents a transformative opportunity. Efforts to rehabilitate peatlands, led by the DHLGH, align well with EU and national mitigation goals.
The National Adaptation Framework, sectoral adaptation plans and just transition funds are helping to minimise the economic and social impact of ending peat harvesting, manage the socio-economic consequences and seize new opportunities. Nonetheless, the just transition process must go further, ensuring that the regions and workers most affected by these changes benefit from green investments and sustainable economic alternatives. Other countries are also facing this challenge of aligning rural economic transformation with climate and innovation goals. In New Zealand, for example, the Agritech Industry Transformation Plan (ITP) was developed to focus on improving business capability, building skills for growth, enabling a smart innovation ecosystem, realising Māori aspirations and increasing global connectivity (Box 4.5).
New Zealand recognises that agriculture and horticulture technology (agritech) is critical to accelerating the transition of the food and fibre sector towards higher productivity and lower emissions industries. The country has experienced increased demand in technological solutions to meet the global challenges in food security, emissions reduction, climate change adaptation and labour shortages, and thriving rural communities require a strong and innovative agritech sector. To respond to this demand, New Zealand has developed the Agritech ITP, which envisions a globally recognised agritech sector for the country and creates solutions for a better world.
The ITP sets out the next series of actions for the New Zealand Government and agritech industry to take to achieve this aim. The draft Agritech ITP has six areas of focus which are centred around improving business capability, building skills for growth, enabling a smart ecosystem, realising Māori aspirations and increasing global connectivity. In addition to the six focus areas, a business case for a horticulture technology catalyst is being developed as a key initiative within the ITP. The catalyst aims to develop New Zealand’s horticulture technology sector to a high-growth, innovative industry cluster by increasing the sector’s international connections, growing industry talent and increasing collaboration and relationships across the horticulture sector. This includes rural persons and communities, who may otherwise miss out because of living away from the country’s main centres.
A thriving agritech sector will see greater productivity thus leading to higher wages, more jobs and lower emissions and have broader economic spill-over benefits. For example, the Technology Investment Network Agritech Insights Report 2022 indicated an average wage of around NZD 94 000 (New Zealand dollars) for the sector’s 22 largest firms, which is significantly higher than New Zealand’s average wage. The New Zealand Government’s role in the Agritech ITP is supported by NZD 5 million in contingency funding in the 2022 budget, on top of the initial NZD 11.4 million allocated in the 2020 budget.
Source: OECD (2023[27]), “OECD Principles on Rural Policy Dialogue Series: New Zealand”, OECD, Paris.
Activate foresight tools to help build resilient, long-term rural strategies
Ireland’s experience with ORF illustrates the growing need for rural strategies that are resilient to shocks. Launched during the COVID-19 crisis, it was developed in response to the social and economic shifts caused by the pandemic, with the goal of leveraging emerging opportunities, especially remote working and community revitalisation. The National Broadband Plan, which underpins the digital component of rural development, enabled initiatives such as the growth of connected hubs and the integration of remote working infrastructure into local development plans.
The OECD encourages governments to embed foresight into strategic planning, but its real power lies in how it is used. When foresight activities engage the communities that will live with the outcomes of policy decisions, they become tools not just for prediction, but for democratic co-design and experimentation. This is particularly valuable in rural contexts, where lived experience can inform more grounded, locally responsive policy design. Used in this way, foresight enables communities to explore long-term scenarios, consider trade-offs and articulate the kind of future they want to build. Policymakers, in turn, benefit from hearing first-hand what people need and value, while citizens gain insight into constraints and the implications of different decisions. This mutual exchange can strengthen trust, improve policy relevance and create a stronger sense of shared ownership.
But foresight alone is not enough. Ireland also needs a long-term institutional framework to give rural strategies continuity and adaptive capacity. To date, four major rural strategies have been introduced in just ten years, Commission for the Economic Development of Rural Areas (CEDRA, 2014), the Charter for Rural Ireland (2016), Realising Our Rural Potential - Action Plan for Rural Development (2017) and ORF in 2021. Some see this as incoherence and, indeed, the discussions with stakeholders revealed a perception of rural policy as one that is unstable or under-prioritised. Another way to view it is as a progressive evolution in rural policy rather than a series of disconnected strategies. CEDRA, for instance, set out diagnostic findings on the state of rural economies; the rural charter highlighted government commitments; Realising Our Rural Potential responded directly to CEDRA’s recommendations and bridged gaps in co‑ordination; and ORF built on this trajectory by introducing a whole‑of‑government framework under the newly established DRCDG.
Today, however, the DRCDG is firmly established as the home of rural development. This creates a window of opportunity to introduce a stable, longer-term framework, such as a Rural 2040 strategy that is both anticipatory and responsive. Austria offers one such example: every ten years, it publishes a forward-looking rural strategy built on integrated policymaking and spatial analysis (OECD, 2023[7]). Longer horizons enable government to move from plugging holes to shaping futures. They also support flexible strategies with built-in guardrails to absorb shocks and adapt to emerging global dynamics.
Key takeaways: Policy objectives
Ireland’s strong national performance conceals persistent spatial inequalities. Rural areas, though integral to the country’s economy, culture and identity, continue to face higher poverty risks, limited economic diversification and uneven access to key services. The OECD Principles on Rural Policy (Principles 4, 5, 6 and 8) provide a roadmap for addressing these gaps by linking well-being, enabling environments, entrepreneurship and environmental sustainability as mutually reinforcing objectives. These principles emphasise that improving rural quality of life requires going beyond income growth to confront structural imbalances in opportunity, resilience and governance.
Key takeaways
Ireland’s aggregate success masks rural disparities: Despite near-full employment and strong health outcomes, rural areas face higher poverty risks and uneven access to opportunities.
Adopt a broader perspective on how to grow the economy: The current reliance on FDI, export manufacturing, tourism and agri-exports leaves rural economies vulnerable to external shocks. Diversification and local embeddedness are essential for resilience, as seen in Poland’s example of intersectoral rural development.
Create an enabling environmental in rural areas: Helping the people and communities in rural regions identify and invest in their unique competitive advantages fosters well-being. Both digital connectivity and tourism contribute to rural success and should be supported by policy measures that address both direct factors (e.g., tourism offerings, digital infrastructure) and indirect factors (e.g., transport connectivity, accommodation capacity, local services.
Employment creation must reflect rural realities: Existing strategies to increase rural jobs should consider rural labour-market conditions, infrastructure and sectoral geography to assess whether they are on track to reach employment creation targets. Sectoral distribution, spatial variation and labour-market mismatches require tailored strategies.
Rural entrepreneurship support remains uneven: LEOs focus on export-oriented firms, leaving micro and local-market enterprises underserved; scaling second-stage support is key.
Understand the needs of SMEs: SMEs face barriers in accessing financing (especially second-stage capital) and addressing productivity gaps. Reconciling national policy with the lived experiences of small-scale entrepreneurs requires accounting for SME heterogeneity and local-market realities
Social Enterprise Potential: Leverage social enterprises as workforce development bridges: Social enterprises can provide skills training in real work environments, helping workers transition into standard employment. Greater integration of social enterprises into the entrepreneurship ecosystem warrants further exploration.
Adopt sustainable management of natural capital and climate adaptation strategies: While existing green transition strategies seek to include rural people and places, they could benefit from more targeted measures to ensure that those most affected benefit from investments and sustainable alternatives.
Activate foresight tools to help build resilient, long-term rural strategies: Move beyond reactive policymaking, toward anticipatory, resilient and integrated approaches (Rural 2040). The potential to introduce longer-term frameworks for rural strategies that are both anticipatory and responsive could create a climate of greater stability for rural policy.
Principles 1, 2, 3 and 7 encourage governments to make the differentiated areas within rural regions the focus of rural development policy. ORF puts people first and focuses on economic, social and environmental aspects, as reflected in the strategy and policy measures. The breadth of activity being realised through the 170 or more policy measures is impressive. However, many of these interventions remain insufficiently grounded in a spatial logic and lack the granularity needed to reflect the diversity of rural Ireland. They respond to national objectives but often fail to articulate clearly how they align with the distinctive economic geographies of rural areas.
National policies designed to support economic resilience, service delivery and well-being can and will have markedly different regional and local impacts (Vermeulen, 2022[28]). Irish data already reveal such variations. The “boil water” notices issued by Irish Water, an indicator of basic service quality, are disproportionately higher in rural regions, and even within the NMR-S and NMR categories (Figure 4.11). Lack of spatial differentiation has concrete policy consequences such as missed opportunities and unbalanced strategies, particularly around something as urgent as climate transitions. This was evident in the discussion on policy objectives.
It is important that policy focus shifts towards a more spatially differentiated approach, one that is connected to the functional and economic realities of place. While ORF and other national strategies recognise that rural places are not homogeneous, this recognition is not consistently reflected in the data definitions or policy calibrations. In practice, there is limited evidence that measures are systematically differentiated to reflect the specific conditions of different rural contexts This need for greater spatial differentiation is not new, it was also recognised in the CEDRA report (2014), which highlighted the inherent limitations of advancing “national objectives” without a clear spatial logic, that is, specific indications of how policy would align with the distinctive economic geographies of rural Ireland, whether rural areas adjacent to urban centres, mid-sized rural areas or more remote communities (CEDRA, 2014[29]). The OECD regional and rural work also takes a differentiated approach with indicators by typology.
Source: Regional Monitor
Rural areas are at the forefront of Ireland’s renewable energy transition (Figure 4.13) but the full potential of this leadership may not be fully realised sis not being fully realised. Most of the country’s renewable capacity, nearly 6 gigawatts (GW), primarily onshore wind and solar photovoltaics, is located in rural regions, underscoring their pivotal role in achieving national decarbonisation targets. Within this, performance varies significantly across rural types: remote rural regions often outperform mid-sized or peri-urban areas (Figure 4.13), reflecting differences in land availability, natural assets and levels of community participation in energy initiatives. However, national frameworks have not yet fully incorporated this spatial diversity into policy design. Without a clearer differentiation between rural types, Ireland risks missing opportunities to tailor measures to place-specific conditions and thereby optimise rural contributions to renewable energy growth.
The challenge then is to ensure that national and regional planning frameworks fully enable the scaling and integration of this rural potential. The National Planning Framework (NPF) and Regional Spatial and Economic Strategies (RSES) provide the statutory basis for onshore renewable development, linking climate objectives with compact growth and balanced regional goals. While the NPF’s intent is to support sustainable development and curb urban sprawl, greater attention is needed to ensure that planning processes, grid investment and benefit-sharing mechanisms keep pace with rural generation capacity. A more spatially responsive approach, one that recognises the distinctive strengths and constraints of different rural contexts, would enable policy to unlock untapped potential and spread the gains of renewable growth across regions. Much of this process has been devolved to the regional assemblies that can identify more specific opportunities that are consistent with local conditions. Local authorities (LA) then develop the elements applicable to their jurisdiction. Conceptually, the approach should lead to an integrated power generation and distribution system. However, achieving this requires a sophisticated co‑ordination mechanism to manage the sequencing of construction and interconnections has to be put in place.
The OECD believes that tailoring rural actions to tap into each rural area’s unique assets will improve not just the response to global megatrends, such as digitalisation, climate change, trade, demographic shifts and urbanisation, but also benefit rural regions overall. When countries lack such territorial clarity, whether through incomplete or vague rural definitions that vary across policy areas and data sources, the effectiveness of their rural policy implementation is weakened (OECD, 2020[1]; OECD, 2018[5]). Other OECD countries have begun to develop such spatially adaptive approaches. In Korea, the government is exploring different ways to foster more effective rural development. These include identifying strategies that foster rural-urban linkages, ensuring mutually beneficial relationships; ensuring local government independence from the central government, including the preparation of independent economic-self-reliance structures; and, ensuring a flexible spatial definition to facilitate collaboration across administrative boundaries (OECD, 2022[30]).
Share of electricity production by source in 2019
Note: Renewables include geothermal, hydro, solar and wind energy sources.
Source: Based on the OECD Regional Database.
Towards a differentiated rural economy
Achieving spatially differentiated rural policy in Ireland faces several hurdles. National frameworks often lack the granularity needed to reflect local economic realities, creating tensions between broad policy objectives and place-specific needs. For example, in rural areas like Shannon Foynes Port, concerns were raised that climate targets are discouraging investment in roads and infrastructure, undermining housing development and job creation. During the OECD field visit to Limerick at the meeting at the Kantoher Enterprise Centre, stakeholders shared that efforts to establish an enterprise/innovation centre were discouraged on the grounds that the area was “too rural”, with advice to relocate closer to urban hubs like Limerick. Such examples also reveal systemic tensions between climate ambitions and regional development goals.
The challenge is not unique to Ireland. Regions within OECD countries tend to be affected differently by economic cycles, due to differences in pre-existing conditions, including industrial and labour composition, geographic and economic linkages within the country and demographic factors, which contributes to unbalanced growth (Vermeulen, 2022[28]). Without spatial differentiation, national policies risk exacerbating these disparities rather than addressing them.
Steps toward differentiation are visible but inconsistent
Specific efforts to introduce a degree of differentiation are visible. In one policy measure, the DRCDG intends to deliver a range of strategic investment programmes over the lifetime of ORF policy that meet the needs of differentiated rural areas, through the EUR 1 billion Rural Regeneration and Development Fund, and an enhanced Town and Village Renewal Scheme. The DRCDG also provides dedicated funding streams for island communities. This measure recognises the structural challenges faced by offshore populations, including higher service delivery costs, accessibility barriers and demographic pressures, and ensures that geographic remoteness does not equate to policy neglect, a core aim of Principle 1.
At the same time, many policy measures are often framed at the national or regional level without embedding rural typologies or using spatial metrics to guide implementation. Several measures, particularly those led by DETE, continue to use broad references to “regions” without incorporating rural differentiation. For example, one action commits to aligning with the enterprise-related ambitions of the White Paper on Enterprise 2022-2030 to support balanced regional and rural economic development. Yet the measure does not set out a rural-specific implementation strategy.
In discussions with stakeholders, a common assumption is that the LEOs, because they operate closer to the ground, can apply this differentiation during implementation. However, OECD analysis shows that policies are more effective when differentiation is built into their design from the outset, especially when typologies are used to structure diagnosis, targeting and delivery. Similar observations apply to job creation and enterprise growth strategies also led by DETE and the LEOs. Regional authority Údarás na Gaeltachta addresses similar economic development goals but with a specific mandate for Gaeltacht areas. These measures represent meaningful steps forward, but, without rural typologies embedded in their design, their transformative potential may be constrained.
The Irish view of rurality or the “rural idyll” also works against differentiation
Ireland has a long-standing cultural narrative that views rural areas as homogenous and universally valuable (Edel Kelly, 2021[31]). This “rural idyll” is often associated with ideas of community, tradition and continuity and can act as a normative frame that shapes both public perception and political discourse. This attachment to a singular rural identity tends to resist efforts to differentiate between types of rural place. And, by extension, it can act as a barrier to spatially differentiated investments or interventions, even when the evidence clearly points to varying levels of vulnerability, opportunity or potential across rural Ireland. This is not to say that “rural idyll” is not important; on the contrary, it is. A vision of “rural Ireland” is the context in which most Irish people and much of the rest of the world characterise the country, even though most Irish people now live in cities and most economic activity takes place in cities (Edel Kelly, 2021[31]).
However, the specific way that “rural” is understood both by government and the larger population determines the types of policies that are developed that support and constrain rural areas.
It can be the attraction: The essence of the “rural idyll” is a vision of rural being a verdant landscape populated by small farms and villages where people live in harmony with nature and each other (Bell, 2006[32]). An important aspect of the idyll is that it is often most embraced by urban residents who may pass through rural areas, but do not spend much time in them. In a sense, they are like tourists, but who value visual amenities in their own country. It remains a major driver of international tourism and is the way most of the global Irish diaspora choose to imagine the country.
It can be misleading: The Irish idyll imagines an agricultural sector based on family small holdings where farm income provides the household with adequate revenue. In reality, a relatively small number of large farms account for the majority of agricultural output in Ireland and other OECD countries. Although the proportion in Ireland would be larger than in other OECD countries. Small family farms in Ireland, as in other OECD countries, need a significant amount of off-farm earnings if they are to have an acceptable level of income. Figure 4.14 shows that the total number of farms in every county decreased except for Donegal, Meath and Wicklow (staying constant for Westmeath). In counties where farm numbers fell the most, the largest source of decline was concentrated among the three smallest-size-class farms, where off-farm income is vital for an acceptable level of family income.
Source: CSO; OECD (2024[12]), Ireland, OECD Background Report, OECD, Paris.
It can be limiting: The idyll also sees farming as not only the quintessential rural economic activity, but largely excludes any other land use in the countryside. It sees rural village and towns as compact service centres for the surrounding farm population, traditional “market towns” that have no internal economic dynamics. For example, rural manufacturing establishments do not fit within the idyll, although in OECD countries about 40% of all manufacturing occurs in rural regions (OECD, 2023[33]).
Compared to other OECD countries, Ireland continues to have a relatively large rural share of its population and there are still many small farms, with small land holdings being the predominant form of rural land tenure. In addition, people living in urban areas remain linked to rural Ireland. Aspirations of having a seasonal rural home are common and levels of return migration are significant (Cawley, 2020[34]). Clearly international tourism remains driven by some version of the Irish rural idyll and it accounts for a significant share of economic activity in some parts of rural Ireland.
On the other hand, long-standing rates of out-migration by young people from many rural areas are perhaps one of the most persistent challenges to the rural idyll, even as Ireland records net in-migration nationally. While limited economic opportunity remains a primary driver of youth out-migration, dissatisfaction with rural social and cultural amenities and services is also reported in the literature. This undermines the idyll’s idealised harmonious social fabric. Moreover, the presence of water pollution in streams and rivers across Ireland contradicts the sense of harmony with nature. For example, for surface waters overall, just over half are in good or better ecological condition (54%), while 46% are unsatisfactory (national assessment for 2016-2021) (EPA, 2025[35]). For rivers and lakes specifically, nitrate remains too high at about 42% of monitored river sites, and phosphate is too high at 27% of river sites and in 35% of lakes, key drivers of eutrophication (EPA, 2023[36]). River nitrogen concentrations declined overall in 2024 versus 2023, but remain too high in the South-East; phosphate showed no significant national improvement (EPA, 2025[37]). There are also positive signals on the coast, with reports of declining nitrate at some inflows and fewer raw sewage discharges in recent years (O’Sullivan, 2025[38]).
While some small farms now earn significant amounts of off-farm income and can remain viable, others do not. In part, this reflects a lack of nearby employment opportunities that are compatible with the farm enterprise. However, it also reflects the increasingly older age distribution of farm operators who are less interested in off-farm employment. Whether these farms will transition to new operators or be consolidated into other enterprises is an open question for the coming decade. Climate change adaptation and mitigation are also likely to alter the countryside in ways that may be inconsistent with the idyll. Afforestation/reforestation for carbon sequestration can either enhance or diminish visual amenities, depending on design, species choice and siting. Separately, measures to reduce cattle-related emissions are likely to place pressure on the dairy sector, with smaller or less efficient farms most exposed unless supported to adapt.
There is clear scope to move beyond an idyllic view of rural Ireland (Box 4.6), especially as demographic change, multinational investment and improved connectivity are reshaping opportunities and perspectives on rurality. For example, rural Ireland is now home to a growing share of foreign-born residents who bring new skills and networks. Similarly, the presence of multinational manufacturing firms in rural communities has created jobs, supply chain linkages and opportunities to build local capabilities, broadening perspectives on what is achievable. Improvements in infrastructure, including upgraded roads and rapidly expanding high-speed broadband coverage have increased connectivity both within rural Ireland and with the wider world. Experience across OECD countries shows that, while farming remains the dominant land use, diversification of the rural economy into modern manufacturing, higher-value services, a broader year-round tourism offer and stronger functional ties with nearby urban centres has improved incomes and bolstered resilience. Ireland can draw on these lessons to frame a realistic, forward-looking vision of rural.
The European Union’s long-term vision for rural areas and OECD work on rural development both represent explicit moves away from traditional, idyllic portrayals. These frameworks promote differentiated, place-based approaches, acknowledging diversity in opportunities, challenges and community realities across rural Europe. Similarly, there are a few countries that have moved away from an idyllic or homogeneous view of rural areas in both their academic narratives and policy approaches.
United Kingdom: The United Kingdom has seen a clear policy and academic shift from viewing the countryside as “idyllic” or as a static rural paradise. Contemporary British rural policy now acknowledges the economic, social and demographic diversity within rural regions, highlighting issues such as rural poverty, service decline, housing pressures and the impacts of migration and urbanisation. British rural studies also critique the idyllic view and place emphasis on heterogeneity, calling for “re-imagining the rural” beyond nostalgia.
New Zealand: Research has shown that while newcomers often arrive with expectations of an idealised countryside, practical realities of employment, services and social diversity challenge these preconceived notions. Overtime policy discourse has become more problem-focused: Government guidance on rural proofing, the Rural Health Strategy (2023) and the National Adaptation Plan (2022), explicitly address rural service access, health and environmental risks, marking a shift from romanticised framings.
Czechia: Post-communist rural policy in Czechia and other countries in Central and Eastern Europe has moved beyond broad, simplistic notions of rural life. These countries have increasingly recognised uneven development, rural polarisation, the rise of peripheralisation and demographic changes, rather than maintaining the idea of an undifferentiated rural paradise.
Sources: EC (2025[39]), “A vision for rural areas towards 2040”, https://rural-vision.europa.eu/rural-vision_en (accessed on 15 August 2025); Martin Šimon, J. (2016[40]), “Rural Idyll Without Rural Sociology? Changing Features, Functions and Research of the Czech Countryside*”, https://doi.org/10.1515/eec-2016-0003 (accessed on 15 August 2025); Dirksmeier, P. (2007[41]), “Strife in the rural idyll? The relationship between autochthons and in-migrants in scenic regions of South Bavaria”, https://d-nb.info/1346411093/34 (accessed on 28 August 2025); Alam, A. et al. (2023[42]), “Settling in New Zealand’s Small Towns: Experiences of Minority Ethnic Immigrants”, Journal of International Migration and Integration, Vol. 24/S6, pp. 1079-1101, https://doi.org/10.1007/s12134-023-01044-6; New Zealand Government (2022[43]), “Rural proofing: guidance for policymakers”, https://www.mpi.govt.nz/resources-and-forms/registers-and-lists/rural-proofing-guidance-for-policymakers? (accessed on 10 August 2025); Perkins, H., M. Mackay and S. Espiner (2015[44]), “Putting pinot alongside merino in Cromwell District, Central Otago, New Zealand: Rural amenity and the making of the global countryside”, https://doi.org/10.1016/j.jrurstud.2015.03.010; OECD (2011[45]), OECD Rural Policy Reviews: England, United Kingdom 2011, https://doi.org/10.1787/9789264094444-en.
Data collection limitations work against taking a differentiated approach
Another hurdle in taking a more differentiated approach in Ireland is the lack of detailed, disaggregated data on the specific needs of different rural places. For example, the PEX (Probability of Exit) score, which determines the likelihood of an unemployed individual gaining employment, is not broken down by region, gender or age. There are also limited data on local labour markets, yet labour-market policies are developed without this granularity. While the revised NPF (National Policy Objectives 70-55) introduces spatial objectives for climate adaptation and resilience, stakeholders’ discussions noted that underlying climate targets and monitoring frameworks remain primarily sector based, with limited visibility of the differentiated impacts on rural areas (Government of Ireland, 2025[46]). Similarly, there are insufficient data on the operation and impact of digital hubs. While planning authorities collect data and prepare statutory plans under the Planning and Development Act (2000) and the 2005 Rural Planning Guidelines, stakeholders noted that housing data are typically aggregated at the LA level. This limits the ability to distinguish housing needs and supply dynamics between rural and urban areas within the same jurisdiction. So, housing need is understood at the LA level rather than differentiated by rural or urban contexts.
One potential solution is to provide a biennial publication of regional statistics, covering key areas such as employment, demography, housing, transport and health. This would provide an evidence base to inform policies that better account for geography and scale. A greater understanding of the differences between rural areas and across regions is needed. One option is for the Irish government to follow the example of the State of the Nordic Regions reports, published by Nordregio and now in its 20th edition. This independent publication provides a technical definition of rural and presents up-to-date trends and developments in demography, the labour market and the economy, broken down by region, municipality and city. It offers a panoramic view of regional development in the Nordic countries, supported by statistical data, maps and analysis.
Functional and territorial approaches to scale
One aspect is tailoring policy actions to suit the different rural regions, the logic of Principle 1. The other is about organising delivery in a way that considers the scale and real-world local conditions. This is the rationale behind Principle 2. It challenges governments to move beyond rigid administrative boundaries and instead design interventions based on functional rural areas, those spaces defined by commuting patterns, service usage, economic ties and social infrastructure. Put simply, by understanding how people interact with places, governments can better design and deliver services that reflect those lived geographies. This is especially relevant in rural areas, where persistent gaps in access to public transport, healthcare and other core services remain a central policy concern. In Latvia, the emphasis is on supporting FUAs as a common strategy to create a polycentric development pattern where the benefit would flow to rural areas (OECD, 2023[47]).
Some sense of scale but more can be done
While there are few rural development measures in ORF that explicitly reference functional geographies or spatial governance arrangements, several actions align with the intent of Principle 2. These measures do not organise rural policy at the right geographic scale per se, but they enable it by investing in the tools, knowledge systems and co‑ordination mechanisms that support place-based delivery. For example, the DRCDG’s commitment to develop a single online information portal that maps available funding programmes across government is a small but significant step toward creating more transparent and navigable governance systems. It improves the ability of actors at different levels to engage with state resources and could support better co‑ordination between local, regional and national actors.
Research led by the Department of Children, Disability and Equality on the experiences and outcomes of children and young people in rural Ireland, while not presented as a spatial governance tool, can generate granular, context-specific insights into the needs of rural communities and inform policy action at the most appropriate scale. In a similar vein, the DRCDG’s support for communities to develop long-term, place-based development plans is perhaps the clearest example of Principle 2 in action. These plans are explicitly intended to align with regional spatial strategies, local development frameworks and national objectives, helping ensure that rural development is integrated across scales rather than fragmented by them. These initiatives, while often indirect, represent meaningful groundwork toward more spatially co‑ordinated rural governance. They suggest a growing institutional understanding that rural development is not just about programmes, but also about ensuring the scale and co‑ordination of delivery match the lived geography of rural life.
Nonetheless, the emphasis on compact growth, while coherent from a national spatial planning perspective, may underplay or even obscure the functional relationships that underpin rural life. The NPF and Project Ireland 2040 strongly emphasise compact growth, focusing development within existing built-up areas to reduce sprawl, improve sustainability and use infrastructure more efficiently (Government of Ireland, 2018[48]). This approach is national in scope, not city-only: National Policy Objectives 3a-3c set explicit housing-location targets, at least 50% of new homes within the existing footprints of the five cities and at least 30% within the footprints of other settlements, and these targets are retained in the revised NPF (2025). Consultation documents from 2023-2024 also indicate continued political and planning support for compact growth to meet Climate Action Plan and United Nations Sustainable Development Goal obligations (Government of Ireland, 2018[48]).
However, functional rural life is shaped not only by density or proximity to cities, but by networks of interdependence, seasonal rhythms, social capital and multi-directional mobility that can be under-represented in a national spatial logic. While the DHLGH has worked to encompass rural concerns in recent NPF revisions, it is not clear that the process captures the variety of opportunities and constraints that influence rural areas. Irish scholarship underscores this point: Meredith (2020[49]) argues that rural territories are functionally diverse and should not be planned through urban-centric lenses. The National Economic and Social Council (NESC Council, 2025[50]) cautions that compact growth can unintentionally intensify rural exclusion if not sensitive to local dynamics; Moore-Cherry and Tomaney (2018[51]) highlight how centralised planning can limit the capacity of smaller towns, rural regions and peri-urban areas to shape their futures; and O’Shaughnessy et al. (2021[52]) note that rural voices have been under-represented in NPF processes. Taken together, these insights suggest the need to couple compact growth with a more consistently functional, place-based approach for dispersed rural systems.
Functional data and governance gaps
The ability to fully embrace a functional approach is constrained, both by the limited use of territorial data and by the persistence of administrative silos that fail to reflect the spatial realities of rural communities. While Chapter 9 of the revised NPF strengthens spatial co‑ordination in climate and energy planning (National Policy Objectives 70-75), Ireland still lacks equivalent functional data and governance mechanisms for understanding how people live, work and access services across rural territories. This data-and-governance gap limits place-based planning, for example data on commuting flows, service catchments, labour markets, SME ecosystems, digital-hub use or local housing need, all of which are often aggregated only to the county or LA level. The absence of fine-grained indicators makes it difficult to design policies that fit the realities of different types of rural places, whether adjacent, mid-sized or remote.
Hierarchies versus functional catchments
At the same time, there is a reluctance of the spatial planning system at all levels of government to accept that the boundaries of a town or village are not a useful way to define the extent of its economy. The settlement hierarchy set out in the RSES, and local development plans acknowledges the different roles and interdependencies of cities, key towns, smaller towns and villages. However, a hierarchy does not equate to functional catchments. Daily working, shopping and service patterns often extend across multiple municipal districts and even county boundaries. Evidence from the Eastern and Midland Regional Assembly, the Central Statistics Office (CSO, 2022 Census) and the WDC’s labour-catchment studies shows that a large share of residents work outside their home settlement, and in many counties, fewer than half of resident workers are employed within the county itself (Government of Ireland, 2022[53]; WDC, 2018[54]). Despite this, implementation mechanisms and funding eligibility criteria still default to administrative boundaries rather than travel-to-work or service catchments, particularly for smaller settlements.
Small settlements do have untapped capacity and are recognised as multi-functional nodes in national policy. However everyday rural life still operates across multiple settlements, and this requires functional planning and targeted infrastructure (transport, digital, housing). Inter-settlement interactions are normal, and leveraging them can support innovation and service delivery. Individual places cannot match all of their residents with local jobs, especially in two worker households. Nor can the population of a small place support a variety of retail establishments; and if people have to commute it may be to multiple surrounding communities, not just to the nearest city. In the absence of a public transport system that connects smaller places in the same way an urban system interconnects neighbourhoods, there is no viable alternative to individual cars.
Inter-settlement interactions and innovation potential
Even though compact growth applies nationally, its implementation tools and density models remain heavily urban-oriented and ill-suited to dispersed rural systems. Rural areas require different forms of “compactness” (e.g. gentle infill, reuse, adaptive density). And, without the planning system being more responsive to the needs of local businesses, there will be fewer new employment opportunities in the municipal districts of rural Ireland, despite this being the ambition of community plan Putting People First. The introduction of municipal districts under Putting People First (2012) laid the foundation for stronger sub-county governance and community-level engagement (DRCDG, 2012[55]). While the document itself is now dated, it remains relevant as the policy root of today’s local delivery structures. Subsequent frameworks, including the Local Government Reform Act 2014 (Government of Ireland, 2014[56]), the Town Centre First policy (DHLGH and DRCDG, 2022[57]) and the Revised NPF (2025), build on this foundation by seeking more integrated, place-based delivery across municipal districts and regional assemblies. Together, these reforms illustrate a gradual evolution towards more locally responsive rural governance, even if full alignment across departments and tiers of government remains a work in progress.
What about the rural hinterland?
The current policy focus seems to be primarily on town centres, even in smaller rural places as evident by the Town Centre First policy and the NPF. But who is working on the rural hinterlands? The Italian government provides an example of a different approach. It has a mapping system for remote area strategies whereby various indicators monitor what is happening in each area. Findings from this approach revealed that: the health system is weakening; the education gap was narrowing in literacy; the use of the public transport system was low in remote areas; and the impact of climate change on land use was worsening (OECD, 2023[58]). This experience highlights that critical economic, social and environmental challenges can quietly intensify over time if they are not paid attention.
It is worth recalling that while it is beneficial for all rural communities to have a “main street” or a thriving centre, not everyone wants to live in town centres. There are non-agricultural enterprises that require space and land so being outside a town centre has more appeal. If housing, services and investments are channelled only into town centres, the promise rural hinterlands offer is being overlooked or under explored. These are issues that require a whole-of-government approach, not just a sectoral focus.
Although the revised NPF, Section 28 Ministerial Guidelines for rezoning economic activity, RSES and local development plans recognise rural settlements and hinterlands as living and evolving landscapes, in practice, the policy focus and investment narrative remain focused around town and village centres. Programmes such as Town Centre First, the National Outdoor Recreation Strategy, targeted investment programme Ceantair Laga Árd‑Riachtanais (CLÁR) and the Social Inclusion and Community Activation Programme play important roles in supporting communities within and beyond these centres, particularly in addressing isolation, recreation and small-scale investment. However, these initiatives operate largely in parallel rather than as part of a coherent spatial or economic framework for hinterland development. As a result, the emphasis on town centre renewal risks underrepresenting the economic and service potential of the wider hinterland. In principle the municipal districts represent a mechanism that could help better link small urban places to their immediate hinterland. Reframing the hinterland as a multifunctional space, encompassing economic activity, housing, services and community life, would help bridge the gap between policy intention and rural lived realities.
Earlier work such as the CEDRA report (2014) first highlighted the “untapped potential” for “niche investments” in non-metropolitan centres and the need for more targeted action in this area (CEDRA, 2014[29]). Since then, successive Enterprise Ireland and IDA Ireland strategies have progressively strengthened their regional focus. The IDA’s current strategy (2025-2029) commits to 1 000 investments, including 550 in regional locations outside Dublin, signalling a continued effort to broaden the spatial spread of FDI (IDA Ireland, 2025[59]). Nonetheless, evidence from national and OECD monitoring continues to show that investment, particularly large-scale FDI, remains more concentrated around urban cores and university-linked regions.
For example, the rural areas in County Limerick are mostly in a rural-adjacent to a city; many rural people in the western half of the county are close to metropolitan Limerick. However, weak transport connections into the county from Limerick city act as a barrier to deeper integration. Metropolitan Limerick also extends into the adjacent county of Clare, and the southwestern part of the county in the Ballyhoura Hills is more attached to similar places in neighbouring counties. The population of the rural areas is mainly located in smaller villages, although there is a significant amount of new larger housing built along major roads. Rural villages have a mix of housing, with a significant part of village centres consisting of older housing and retail, with a significant portion being in poor condition or not occupied. Private and public services in villages are limited in terms of quality and quantity, due to small populations and limited income. Sustained co‑ordination between the DRCDG, DETE, Enterprise Ireland and IDA Ireland therefore remains essential to ensure that smaller towns and rural hinterlands can capture a share of enterprise growth and innovation spillover.
What is needed is a genuinely bottom-up local rural economic development strategy, built from the ground up, based on differentiated rural typology, and recognising the diverse assets, needs and potentials across rural spaces (Figure 4.15). This approach builds on earlier calls for place-based, bottom-up strategies to unlock the diverse economic potential of rural communities, an ambition that has since been echoed in ORF and recent Regional Enterprise Plans. Agriculture departments do have a role. In some areas, off-farm diversification opportunities might remain linked to agriculture, such as agritourism, on-farm renewable energy or speciality food production. But there will be times when diversification may be delinked entirely from agriculture, focusing instead on digital services, financial support functions, recreational services or creative industries.
These local rural economic strategies should be grounded in objective evidence about the opportunities within each typology and designed to build regional partnerships around those specific strengths. Importantly, the aim is not to replace the NPF but to ensure stronger two-way alignment, where local rural evidence and innovation can inform national and regional priorities, and where the flexibility already provided within the NPF is fully leveraged in practice. Such feedback loops would help the planning system remain responsive to diverse rural realities while reinforcing coherence between local development efforts and national objectives.
OECD evidence from across member countries shows that multi-level co-ordination, planning based on functional-area- and typology-based strategies produce better alignment between national objectives and local realities. Countries are increasingly turning to high-quality data systems to support rural development planning and help communities prepare for transitions such as climate change, digitalisation and demographic shifts by expanding their knowledge base. These examples show that well-designed data tools can improve rural capacity building, planning accuracy and policy delivery (Box 4.7). Applying this learning in Ireland means grounding local rural economic strategies in objective evidence within each typology and building regional partnerships around those specific strengths, thereby ensuring that local innovation and data actively inform national and regional priorities, co-ordination, and planning based on functional areas.
In Korea, the government is making the development of micro spatial data systems a priority to support rural policy. These new data systems analyse population trends, service needs and land use in detail at the small-area level using administrative data. National and local stakeholders can access information via mobile dashboards for real-time monitoring and planning. Additionally, Korea integrates data on idle residential and commercial real estate into mid- and long-term rural development strategies, enabling better use of underutilised assets.
Lithuania has invested in a national data governance system that provides open access to a wide range of indicators, covering not only economic dimensions such as income and employment, but also health, education and social well-being. Publicly available interactive dashboards and downloadable data improve transparency and allow for faster, better-informed policy decisions. Policymakers increasingly use it to pinpoint emerging rural needs and craft better interventions, both nationally and locally.
Source: OECD (2022[30]), “OECD Rural Principles on Rural Policy Dialogue Series: South Korea”, OECD, Paris.
An appropriate geographic scale exists for local politics and policy formation
Irish legislation has long emphasised the need for devolution and the importance of subsidiarity to ensure that policies and programmes respond to local realities. Electoral divisions (EDs) have historically served as the basic unit of local governance and statistical reporting, though, since 2011, the CSO has also used small areas for data collection and analysis. Ireland’s circa 3 440 EDs are aggregated into 95 municipal districts, which in turn form part of 31 LAs. Elected representatives are chosen from each local electoral area, and these councillors collectively form the LA council. Council size varies by population, from 18 to 63 members, reflecting differences in settlement patterns and population density.
The geographic boundaries of most municipal districts broadly correspond to local labour-market areas surrounding towns and villages. In many cases, they reconfigure the footprints of former town councils, with less authority but often more functional boundaries for capturing local economic and social interactions. Each district combines contiguous EDs to achieve roughly similar populations, creating units that are large enough to support service delivery yet small enough to reflect distinct local contexts.
From a policy perspective, this existing geographic hierarchy already provides an appropriate scale for capturing differentiated data and analysing rural realities. The challenge is not the absence of territorial units but the limited integration of the data into national rural policy formation. Leveraging municipal district and small area data could allow Ireland to develop more granular, typology-based insights into employment, service access and quality‑of‑life outcomes, providing the missing foundation for more functional and place-sensitive rural strategies.
OECD analysis consistently highlights the value of working at the correct territorial scale and of applying functional or cluster-based approaches to capture rural diversity. Comparative evidence, such as in reports Rural 3.0: A Framework for Rural Development (OECD, 2018[5]), Rural Well-being: Geography of Opportunities (OECD, 2020[1]) and Reinforcing Rural Resilience (OECD, 2025[6]), demonstrates that using differentiated and appropriately scaled data is essential for effective place-based policy. Country examples (see Box 4.8) illustrate that differentiated, functional approaches are now a core feature of modern rural policy. Ireland’s existing territorial framework, anchored in small areas, electoral divisions and municipal districts, could therefore be mobilised to generate the evidence base required for more nuanced, place-responsive policymaking.
Canada, Finland, France, Japan, Korea and Norway all utilise functional definitions and typologies, often adapting or building on OECD frameworks, to define what constitutes “rural”.
Finland’s Rural Policy Council explicitly uses three rural types (urban-adjacent, intermediate, remote) when tailoring measures for service provision, innovation and population retention. Funding and programmes under the Rural Development Programme consider these typologies. The approach builds on Finland’s functional commuting and accessibility data.
Norway’s District Policy applies differentiated regional support zones (A-D) based on population density, labour markets and remoteness. These determine eligibility and intensity of state aid, investment grants and tax incentives, one of the clearest operational examples of typology‑based differentiation.
Japan distinguishes between core, interlinked and isolated rural regions in the Comprehensive Strategy for Overcoming Population Decline. Policy instruments vary by category, e.g. subsidies for depopulated areas, and support for innovation in peripheral or mountainous municipalities.
Korea’s Balanced National Development framework differentiates between metropolitan hinterlands, provincial cities and rural counties. Programmes such as the Rural New Vitalisation Programme use these spatial categories to design support packages, functional logic embedded in funding allocation.
France applies “living zones” (bassins de vie) and FUAs (aires d’attraction des villes) as spatial units for service and transport planning. While not a full typology-based funding model, these functional areas underpin differentiated territorial contracts (contrats de ruralité).
Canada’s federal and provincial programmes (e.g. Rural Economic Development Strategy, Atlantic Growth Strategy) increasingly apply accessibility and remoteness indicators to tailor interventions, especially in northern and Indigenous regions. Statistics Canada’s accessibility index supports this differentiation The categorisation is designed to capture socio-economic realities more granularly than population density alone, supporting distinct policy needs.
Source: OECD (2014[60]), OECD Rural Policy Reviews: Chile 2014, https://doi.org/10.1787/9789264222892-en.
Local authorities/counties align with sense of place
As a small country, Ireland has been cautious about imposing extra layers of bureaucracy between the national government and localities. Currently, while there are four formal levels of government, only the national government and the LAs play a significant role in delivering programmes and services. Co‑ordination between the national and LA levels is enhanced by national agencies stationing employees in each LA as liaisons to help facilitate coherence.
People in Ireland, especially rural people, are attached to a specific county, both because of their long‑standing stable boundaries, and because their county forms the basis for most cultural and social interaction. Historically, counties provided many of the social and public services that are now provided through national government. Since Ireland has only a small number of larger cities, much of the population live in smaller towns and villages, and there is a strong sense of attachment at this level as well. This dispersed population has to travel to a number of places to work, shop and access services, because in most LAs there is not one large population centre that dominates the surrounding settlements. Frequent interaction across a larger territory makes people familiar with more than just their community and leads to identification with the county as their larger society.
Counties, while not ideal, are workable units in terms of size and population for rural development and there is already capacity to work across boundaries when needed. This tends to happen at county boundaries, where people are geographically closer to a settlement in another county than in their home county. While this can require some element of co‑operation across LA boundaries, it is generally not seen as a problem. Similarly, the use of regions allows the possibility to aggregate LAs into bigger units for certain purposes. Regions can play a useful role in planning larger public infrastructure projects such as major roads and in developing tourism marketing strategies and co‑ordinating higher and further education facilities.
Data and evidence for rural differentiation: The six-way split is an underleveraged tool
The good news is Ireland does not need to start from scratch in developing tools to better reflect functional rural geographies. The CSO six-way rural-urban classification provides an underutilised yet promising foundation for identifying spatial patterns in how people live, work and access services (Figure 4.16). While not originally designed to delineate labour-market zones or economic catchments, the classification already captures a more nuanced rural-urban continuum that, if tested and integrated more systematically, could support the delineation of local economic zones, an idea first proposed in the 2014 CEDRA report (CEDRA, 2014[29]). The potential here is twofold: first, as a tool to map current socio-economic flows and service usage patterns at the sub-county level; and second, as a platform for informing targeted investment, planning and inter-agency collaboration within and across functional areas. Figure 4.16 provide a breakdown of the six-way split combined with OECD typology to show the variations in how different categories of rurality are aggregated.
Source: Based on CSO data.
Increasing the focus on rural-urban linkages
Proximity to urban centres such as Dublin, Cork and other cities offers clear advantages, commuting, service access and infrastructure spillovers, but these relationships are often framed in one direction, with rural areas serving primarily as residential or labour supply zones for urban cores. There is a broader spectrum of benefits that flow from the rural-urban relationship, particularly in areas like circular economy models, tourism, food systems and local service innovation. Yet such differentiated relationships are rarely made explicit in policy instruments or governance frameworks. Unlocking this potential requires both better evidence, moving beyond commuting data to map tourism flows, waste systems, food chains and more deliberate policy design that allows rural-urban interdependence to be structured, strengthened and scaled for national gain
ORF acknowledges the importance of recognising and supporting rural-urban interdependence as part of Ireland’s rural development strategy. In parallel, the evidence base for examining urban-rural dynamics is also expanding. The CSO publishes an increasing number of outputs that apply rural and urban classifications, not only at a basic binary level, but also using more granular population-based typologies (CSO, 2019[61]). The first publication Urban and Rural Life in Ireland 2019 employed the six-way classification that differentiates both urban and rural areas based on employment location patterns. Despite the commitment to urban-rural interlinkages, there is little evidence of the execution of relevant policies. Discussions revealed poor transport connections between towns and cities only ten miles apart. Housing and employment opportunities in rural areas could alleviate the congestion in Dublin and Galway. There is little visible joined up thinking. Census data on workplaces, commuting activity and working from home demonstrate a complexity of rural affairs and a blending of lived experience and identity. It is argued that until the complicated reality of the Irish lived experience is publicly and politically acknowledged, the continued reliance on the traditional urban-rural binary in politics and lobbying will remain a stumbling block to more effective spatial planning.
Examples from OECD countries further underscore the value of understanding and supporting rural-urban interdependencies. In Colombia, rural areas with stronger linkages to urban centres tend to have lower poverty rates. Recognising this, the country is actively identifying opportunities for economic diversification beyond agriculture and strengthening competitiveness in rural territories. Colombia’s National Development Plan explicitly includes the assessment of urban-rural linkages, including the types of relationships to promote and their sectoral impacts (OECD, 2022[30]). Similarly, Türkiye has modernised its understanding of rural-urban interactions by improving the co‑ordination role of metropolitan provinces, tasking them not only with managing core urban functions but also supporting the development missions of surrounding rural areas. In France, experimentation with “reciprocity contracts” between large and small cities is helping to formalise two-way partnerships that encourage mutual development benefits, rather than one-directional flows of resources or labour (OECD, 2023[62]).
Research and policy analysis note that, in recent years, Irish strategies have sought to harness urban-rural linkages and the diffusion of innovation and technology, particularly through digital transition and remote working, as key instruments for rebalancing regional development. Indeed, ORF and the National Remote Work Strategy explicitly frame digitalisation as a driver of rural opportunity and spatial equity, supported by broadband rollout, the Connected Hubs network and Smart Village initiatives. Digitalisation is important but it should be coupled with place sensitivity, not framed as a “rural panacea” or a universal remedy for rural problems.
The sensitivity of the place still needs to be considered because, as Salemink et al (2025[63]) note, digitalisation does not always benefit rural regions equally. In fact, uneven capacities, spatial divides and social inequality can mean that technology ends up reinforcing, rather than correcting, existing spatial disparities, both between urban and rural places, and also within them (Arcuri, 2023[64]). If the underlying disparities in infrastructure, skills and institutional support are not addressed, it cannot be expected to transform rural areas uniformly. The next iteration of ORF should then encourage a much more spatially nuanced approach to rural innovation.
Opportunities to further explore rural-urban connections
While ORF does not present a dedicated rural-urban action framework, Ireland’s planning architecture, particularly through instruments aligned with the NPF, provides a platform to better explore and operationalise these relationships in practice. At the regional level, the RSES define the development vision for each of Ireland’s three regions. As each region encompasses both urban and rural areas, the strategies are inherently cross-territorial in scope. Notably, “placemaking” is identified as a guiding principle, directing strategic investment to generate balanced outcomes for both people and place (SRA, 2025[65]). This integrated vision offers an entry point for strengthening functional linkages between towns, their hinterlands and surrounding rural settlements.
The RSES are underpinned by city and county development plans, prepared by Ireland’s 31 LAs. These statutory plans guide land use and development for residential, commercial, industrial, agricultural and recreational purposes, and shape key public investments in transport, infrastructure, amenities and economic development (Local Government Ireland, 2025[66]). Some LAs have also placed particular emphasis on strengthening agricultural and food-system linkages between municipalities, improving market access for local producers and supporting rural-rural collaboration. Each plan is reviewed by the Office of the Planning Regulator to ensure consistency with national and regional policy objectives, and all local planning applications are assessed against their provisions. These development plans provide a key lever to embed rural-urban linkages at the local level, including infrastructure connectivity, service access and land use compatibility.
At the metropolitan scale, Metropolitan Area Strategic Plans (MASPs) were introduced as part of the RSES process for the Dublin, Cork, Limerick-Shannon, Galway and Waterford city regions. These 12-year statutory plans offer a new co‑ordination mechanism, led by Ireland’s regional assemblies in partnership with LAs, for sequencing infrastructure investment, supporting compact growth and aligning strategic goals across jurisdictions. By establishing shared priorities for housing, transport and employment across metropolitan areas, MASPs offer a useful template for co‑ordinated, spatially aware development that could inform broader urban-rural integration efforts (ESPON, 2024[67]).
Taken together, these spatial instruments, while not explicitly framed as rural-urban development tools, offer considerable potential to operationalise the vision articulated in ORF. Ensuring that this potential is realised requires a deliberate effort to embed rural-urban connections more clearly into policy design, spatial strategies and monitoring frameworks, including through strengthened interdepartmental co‑operation and rural-sensitive planning capacity at the local and regional levels.
In practice, most countries, including Ireland, still interpret rural-urban linkages primarily through commuting or labour-market patterns. There is significant scope to expand this lens to include environmental, economic and social systems, consistent with the OECD Functional Areas and Rural-Urban Partnership frameworks. Ireland already has the institutional architecture, but it needs the right analytical tools to capture these multidimensional relationships. Box 4.9 illustrates why measuring a wider range of interactions, beyond commuting flows, is essential to understand the full spectrum of rural-urban interdependencies.
One of the limitations in current rural policy frameworks, both in Ireland and more broadly, is the tendency to view urban-rural relationships through a narrow lens, often focused on commuting flows or labour-market integration. While commuting is a useful proxy for certain types of interaction, it fails to capture the full spectrum of interdependencies that exist between rural and urban territories. These include environmental systems (e.g. water catchments, food systems, biodiversity corridors), economic linkages (e.g. supply chains, service flows, innovation spillovers), and social ties (e.g. migration, education, cultural exchange). Moreover, these relationships are not unidirectional. Rural areas do not simply receive services, labour or knowledge from urban cores, they also contribute critical assets: energy, food, recreation, cultural identity and environmental stewardship. Yet these contributions are rarely measured or recognised in investment planning.
Measuring and institutionalising a wider range of urban-rural linkages, including those that extend beyond commuting, is needed. This would support a more balanced, reciprocal framing of interdependence and provide a stronger basis for designing joint development strategies, targeted funding mechanisms and spatial governance reforms. Such an approach would also help unlock synergies, rather than treating rural and urban policies as parallel tracks. Applying this broader perspective in Ireland would mean systematically mapping flows of goods, services and environmental resources between towns and their surrounding rural areas, beyond simple commuting patterns
Source: OECD (2025[6]), Reinforcing Rural Resilience, https://doi.org/10.1787/7cd485e3-en.
National Planning Framework and urban-rural linkages
Ireland’s NPF sets the strategic direction for spatial and population growth across the country, with a strong emphasis on compact growth, urban consolidation and infrastructure alignment. Within this system, small towns and villages, typically those under around 1 500 people, are recognised as part of a wider rural settlement network. They serve as local service, residential and community hubs, and are expected to grow modestly based on their infrastructure capacity and local role (Government of Ireland, 2025[46]). Planning policy seeks to reduce rural sprawl by encouraging alternatives, such as serviced sites within these small settlements, rather than dispersed one-off housing in the open countryside.
In contrast, the NPF includes population projections and a typology that differentiates “self-sustaining” towns from “commuter” towns, as stated in the original 2018 document (Paragraph 3.4) and retained in the 2025 revision (see Table 4.3). Small and medium-sized towns (1 500-5 000 people) are treated more variably. The NPF distinguishes between self-sustaining and commuter towns, the former typically having stronger employment bases and local services, the latter often being car-dependent with limited economic activity. For this tier, the policy approach allows for more tailored planning, with LAs encouraged to adjust housing density and development strategies based on each town’s function, location and infrastructure.
On the one hand, the NPF aligns with the objectives of Principle 3 of the OECD Principles on Rural Policy by encouraging housing alternatives within rural towns and villages. This approach can help reduce unsustainable rural sprawl by concentrating services and population in defined rural centres. It may also strengthen rural-urban ties, particularly where people live in rural towns but commute to or trade with each other, as well as with nearby urban cores. Recognising the different roles of small towns, including their function as commuter settlements, reflects an understanding of the functional linkages between rural and urban areas. Tailored growth strategies further support this by helping to prevent rural areas from becoming either hollowed out or overdeveloped, contributing to a more balanced territorial system.
Nonetheless, there could be tensions where proportional growth limits, if not matched with complementary investment in connectivity, employment and digital infrastructure, may undermine the small towns’ potential to serve as effective rural anchors. Towns designated primarily as commuter settlements could face constraints on growth without corresponding measures to strengthen local employment and services. This risks reinforcing an urban bias rather than fostering productive interdependence, which runs counter to the spirit of integrated territorial development. This could also limit the potential for groups of rural towns to find collective ways to manage their development potential.
Looking ahead, the forthcoming Planning and Development Act 2024, enacted in October 2024, will introduces a more integrated strategic and long-term orientation to local planning (DHLGH, 2025[68]). Given the scale of the act, it is being commenced on a phased basis to facilitate the transition from the arrangements under the Planning and Development Act 2000 to those under the new act, including the preparation of regulations. Development Plans will extend from six to ten years, with a mandatory five-year review, supporting more coherent and long-term planning at the local level. Local Area Plans will be replaced by more flexible, needs-based planning tools designed to strengthen alignment between local and county priorities.
These changes aim to enhance co‑ordination, certainty and evidence-based decision making, particularly to accommodate population growth, climate adaptation and infrastructure investment. At the same time, ensuring that local innovation and place-sensitive planning remain integral will be critical for implementation. While the 2024 act provides a clearer and more balanced planning hierarchy, its success will depend on how effectively LAs can use the new instruments to empower rural towns, villages and their surrounding areas as part of an integrated rural-urban system.
Aligning service delivery
Principle 7 represents the operational core of the policy focus: once differentiation and functional logic are established, the challenge becomes one of delivery, aligning objectives, instruments and institutional capacities to meet local realities. Viewing rural areas through a differentiated lens and understanding their functional scale of interaction and rural-urban dynamics enable more coherent and efficient service provision. The key task is to identify the strategic services most essential for rural vitality, health, education, transport, energy and economic development and ensure that the mechanisms used to deliver them are fit for purpose. Groups of smaller towns should also be empowered to co‑ordinate shared services where collaboration is more cost-effective.
Principle 7, therefore, calls for alignment between sectoral strategies and the specific needs of rural populations. It is not enough to deliver the same services everywhere: policy must be assessed for its differentiated impact and adapted to ensure equitable access and effective outcomes. Many of the clearest Irish examples are emerging in transport, education and health, where service models are being redesigned to suit rural contexts.
In education, the Department of Education and Youth has committed to reviewing the School Transport Scheme, with specific attention to how it operates in rural areas. In transport, the Smart Demand-Responsive Transport pilot, part of the Rural Mobility Plan, tests flexible, locally tailored services that use digital tools to match demand and routes. This model demonstrates how innovation and data can enable high-quality services in low-density areas without replicating traditional, resource-intensive systems. Another example of how digital innovation supports more effective rural service delivery is Ireland’s Eircode system, which has improved geolocation, public service targeting and emergency response, particularly in dispersed rural areas (Box 4.10).
Introduced in 2015, Eircode is Ireland’s national postcode system, providing a unique code for every postal address. This innovation holds particular value for rural areas, where address duplication and dispersed settlements can hinder service delivery. Approximately 35% of addresses in Ireland are non‑unique, meaning they share the same address line, making precise location identification a challenge.
Eircode addresses this issue by enabling:
improved planning and targeting of services such as education, health, housing and waste management.
enhanced service delivery, especially in sparsely populated and geographically complex rural areas.
accurate geolocation and address verification, supporting both public and private service providers.
simplified digital applications, through address autofill and validation tools.
A clear illustration of Eircode’s rural relevance is its integration by the National Ambulance Service (NAS). NAS has embedded Eircode in their computer aided dispatch system, equipping ambulances with mobile data terminals that display precise location data and navigation assistance. This technology significantly reduces response times and increases accuracy, especially in rural communities where locating households can be challenging.
Furthermore, NAS actively promotes public use of Eircode during emergency calls and includes it in text alerts sent to cardiac first responders (CFRs). This removes ambiguity about location and enables CFRs to navigate the fastest route, potentially saving lives.
Eircode exemplifies how digital infrastructure and spatial tools can strengthen rural service accessibility, co‑ordination and responsiveness, directly supporting the goals of Principle 7 (Align strategies to deliver public services with rural policies) and Principle 11 (Foster monitoring, evaluation and accountability).
Source: OECD (2024[12]), Ireland, OECD Background Report, OECD, Paris.
Beyond these, healthcare reform also shows growing alignment with Principle 7. The Department of Health’s establishment of 96 Community Healthcare Networks represents a significant shift toward community-based delivery, bringing care closer to where people live and helping rural residents maintain independence within their communities. Box 4.11 illustrates how other OECD countries are pursuing similar objectives, aligning service design, governance and delivery with rural realities, through innovation, cross-sector co‑operation and empowered local actors.
The Healthy Ireland programme complements this by promoting community well-being through partnerships between LAs and rural stakeholders, encouraging locally driven responses to population health needs. Similarly, the Department of Justice, Home Affairs and Migration is supporting local policing engagement through the establishment of Local Community Safety Partnerships, where national police force An Garda Síochána and other relevant service providers will work in partnership with the local community to identify and prioritise the safety needs of that community The multi-purpose community spaces supported by the DRCDG are also a practical example of flexible, community-anchored service delivery, enabling rural areas to meet multiple needs, social, cultural, recreational and even administrative, within shared infrastructure. In rural areas, such hubs can consolidate access to services that might otherwise be fragmented or unavailable, enabling innovation without requiring costly new infrastructure.
As part of the OECD Principles on Rural Policy dialogues, countries provided examples of how Principle 7 can be achieved. This principle emphasises the need to deliver high-quality public services in rural areas through infrastructure improvements, innovation in service models and co‑ordination across governance levels and territorial boundaries. Several OECD countries illustrate how this can be achieved:
Japan: Regional management organisations, such as those led by farmers’ groups, co‑ordinate across multiple sectors to deliver local services, enabling integration and efficiency across administrative and policy domains.
Italy: Local co-design is central. In one example, stakeholders collaborated to create a tailored transport solution, buses connecting students to a tourism-focused vocational school, showing how inclusive planning can bridge service and labour-market needs.
Portugal: Territorial instruments funded through EU programmes are key enablers. These tools strengthen intermunicipal co‑operation and help bridge the urban-rural divide in public service delivery, especially in smaller or remote areas.
Slovak Republic: Cross-border service integration remains a challenge. Health sector co‑ordination, such as ambulance services crossing national boundaries, has required international collaboration to overcome legal and logistical barriers.
These examples demonstrate how countries are innovating within their governance systems to align rural service delivery with local needs, often by empowering local actors, improving inter-jurisdictional co‑operation or leveraging EU and cross-border mechanisms.
Source: OECD Principles on Rural Policy Dialogue Series.
Many of the problems of ORF are common to rural policy, where one government department is tasked with responsibility and is reliant on the buy-in of other government departments. This is particularly the case for housing, health services and transport. However, within the DRCDG’s core rural programmes, such as the Town and Village Renewal Scheme, CLÁR and the Rural Regeneration and Development Fund, there remains scope for further innovation and alignment with local service and housing needs. Local Link transport is important and more could be done to fund community transport schemes.
Over-shop spaces to respond to housing needs
ORF specifically discusses converting over-shop space into apartments. Indeed, since 2018, Ireland has Planning and Development (Amendment) Regulations that introduce exemptions from the requirement for planning permission when converting vacant commercial premises (including over-shop spaces and former pubs) into residential units. This is especially relevant in a moment when viable options are needed to respond to the acute recruitment challenges for teachers and healthcare professionals in rural Ireland, many of whom face barriers to relocation due to housing shortages. School principals report prolonged vacancies and staff redeployment because new teachers are unwilling or unable to relocate without secure accommodation (McGreevy, 2025[69]). Similar difficulties affect the recruitment of healthcare workers, exacerbating shortages in rural and remote hospitals and clinics (Reilly, 2023[70]).
Between 2018 and 2024, LAs received 1 457 notifications to convert vacant commercial properties, including shops and over-shop spaces, into new homes, totalling over 3 400 new residential units. In 2024 alone, nearly 300 exemption notifications resulted in over 700 homes (DHLGH, 2025[71]). These exemptions are scheduled to expire at the end of 2025, but the intent is to extend them.
Extending them is good but discussions with stakeholders suggest that the measure was underutilised, partly due to misconceptions about its eligibility and regulatory requirements. The DRCDG could collaborate with LAs to raise awareness and dispel regulatory misunderstandings. It could also pilot targeted initiatives that ringfence refurbished housing for essential service providers such as teachers, nurses and general practitioners. Such measures would strengthen the alignment between housing, service delivery and rural well-being objectives in ORF II.
Key takeaways: Policy targets
This section analysed Ireland’s rural development strategies through the prism of the OECD Principles 1, 2, 3 and 7. It finds broad alignment in intent, particularly around town centre vitality and cross-government engagement, but also reveals a gap between national ambition and place-sensitive execution. A single “rural” category obscures meaningful differences; policies should instead be designed around functional geographies using spatial typologies to target investment and delivery. While ORF’s 170-plus measures have enhanced policy visibility across government, the challenge lies in how they are monitored, steered and adapted, shifting from information collection to strategic influence. The issue is no longer the number of measures, but the ability to track and adjust them using typology-rich, functional evidence.
ORF II should position the DRCDG as the keeper of rural intelligence, standardising the use of spatial typologies and aligning sectoral delivery models with the diverse realities of rural places. By embedding functional logic and rural-sensitive service design across departments, Ireland can move from co‑ordination to coherence in rural affairs.
Key takeaways
Identify and capitalise opportunities that risk being missed: Identify and capitalise on opportunities that risk being missed: Clearer differentiation between rural area types is necessary to maximize Ireland's renewable energy potential and respond effectively to global trends.
Functional scale matters: Policy design should follow how people actually live and interact (labour markets, service catchments), not just administrative lines.
Apply differentiation to rural economic development: Steps toward differentiation are visible but inconsistent. Three shifts are needed: building differentiation into policy design from the outset; moving past an idyllic view of rural Ireland; and collecting detailed, disaggregated data on specific rural needs.
Increase the focus on rural-urban linkages: Stronger attention to two-way flows (jobs, services, value chains, natural resources) is needed; commuting alone is too narrow a lens. Various existing spatial instruments, though not explicitly rural-urban development tools, could be operationalised together to support the ORF vision.
Align service delivery: Ireland has developed innovative rural service models**, including demand-responsive transport, Community Healthcare Networks, and Eircode for emergency response. Building on this progress, ORF II should scale successful pilots and address implementation gaps, such as expanding over-shop housing conversions to support teacher and healthcare worker recruitment in rural areas.
Avoid inadvertent growth limits when tailoring interventions: The NPF’s compact growth and tailored treatment of towns can support balanced development, but proportional growth limits and “commuter town” labels may constrain potential if not paired with jobs, connectivity and services.
Strengthening subnational governance structures to enhance rural development
Structural reforms do not equate to functional devolution. In Ireland, the institutional architecture for more bottom-up policy making exists, but local discretion and autonomy remain limited. The creation of regional assemblies and municipal districts reflects a political and administrative openness to empowering subnational actors. Yet, Ireland’s national government agents play a much larger role in the local delivery of services than is the case in most EU countries. This point was highlighted in the 2023 final report by the European Charter of Local Self-Government (Monitoring Committee). The report notes that, “there is still a lot to be done before local self-government in Ireland is on par with other European countries”. It also observed the limited share of service delivery under LAs’ own responsibility and their limited own resources (Prebilič and Helgesen, 2023[72]). The 2014 reforms aimed to extend local governance across the entire territory, particularly by dissolving town councils, establishing new municipal districts, and clarifying the relationship between elected and executive roles in LAs. However, while structures changed, substantive empowerment did not – LAs continue to lack the autonomy requisite for bottom-up policy making. Arguably, the challenge now is to build on this trajectory by deepening the role and strengthening capacity of LAs so they can more effectively shape rural development outcomes.
Regional assemblies
Regional assemblies in Ireland do not have executive or funding control comparable to regional governments in federal systems or in larger EU countries. Their influence is co‑ordinative and analytical, rather than directly operational. They shape frameworks, guide investment priorities and support coherence, but delivery remains with LAs, the DRCDG and national departments. Regional assembly structures do not have a rural mandate per se: they help align spatial and regional planning with ORF objectives through RSES linkages, but they are not central actors in delivering or designing rural policy. Their involvement is more indirect, not necessarily proactive or strategic. Nonetheless, the very nature of their activities, their emphasis on balanced development and the integration of RSES positions them to contribute directly and indirectly to rural outcomes. This role could be strengthened further through ORF II.
Embed spatial typologies (rural/urban, remoteness, etc.) into regional data systems
The fact that regional assemblies must co-ordinate across unclear regional boundaries and overlapping mandates among multiple agencies and authorities has, to some extent, limited their ability to “lead effective place-based development” (Irish Research Council, 2021[73]). This in reality means that they have had to become adept at taking a functional approach to planning and building in the needs of the different types of territories within their portfolio of action. Regional assemblies are de facto operating functionally, because the administrative boundaries in Ireland do not align neatly with economic, social or service delivery geographies. Assemblies have had to plan across diverse territorial contexts, from commuter belts and small-town clusters to remote hinterlands, bridging the realities of LAs with very different conditions. This functional adaptation arises from necessity, not formal design: regional assemblies must co‑ordinate planning across LAs with different territorial realities (commuter belts, small-town clusters, hinterlands). Thus, they already understand and manage functional relationships, even without a formalised functional framework.
They have also built valuable analytical foundations for this kind of work. In collaboration with the All-Island Research Observatory (AIRO) and Ordnance Survey Ireland, the assemblies developed the Regional Development Monitor (RDM), an open-access dashboard that maps socio-economic and environmental indicators across regions and supports evidence-based policy and evaluation. The RDM tracks key themes such as “Our people and place”, “Our region’s economy” and “A green and sustainable future”, providing a shared platform for regional analysis and alignment.
The RDM and related monitoring systems are not typology-based. Their indicators are largely thematic and not spatially differentiated. The assemblies should consider embedding spatial typologies (rural/urban, remoteness, etc.) into a regional data system to make rural differentiation a structured instrument in their strategic role. Doing so would help them address regional inequalities, particularly in the Northern and Western regions, which have been classified as “lagging” by the European Commission and where the effectiveness of Regional Assemblies has been called into question (NWRA, 2025[74]). For example, embedding the CSO’s six-way classification into the RDM would strengthen regional strategic planning and support rural development.
Increase the focus on rural-urban dynamics
At present, regional assemblies focus on spatial coherence and statutory plan alignment, not on explicitly examining rural-urban relations or producing rural-sensitive outputs. They are limited: to some, the fact that the assemblies are not directly elected for their regional role is also an issue. The concern here is the potential conflict that can arise between local and regional priorities, especially when members are accountable first to their local area (Kayanan, 2024[75]). Similarly, Breathnach (2021[76]) notes that their largely advisory role and modest resources reduce their ability to ensure that regional priorities translate into action. But within those limits lies untapped potential. In particular the regional assembles may become a forum for aggregating the concerns of people in diverse LAs to provide upward pressure on the national government, as well as improving co‑ordination among LAs.
Having a mix of councillors from either urban or rural territories is an opportunity to lead on a core issue: rural-urban interdependencies and exploring ways to leverage those connections for economic growth in both territories. Regional assemblies could become convenors of rural-urban collaboration (e.g. around shared infrastructure, housing, transport or enterprise zones).
They should:
Use their unique mixed composition (urban plus rural councillors) to initiate structured rural-urban dialogue within their regions.
Institutionalise this dialogue by creating rural-urban tables or sub-committees in their regular RSES monitoring/implementation cycles.
Publish periodic rural-urban factsheets or reports that capture both quantitative evidence (flows, linkages, commuting, service access) and qualitative insights (councillor priorities, citizen feedback, local innovation).
Pilot new ways to measure rural-urban connections, combining quantitative indicators (CSO, AIRO, RDM) and qualitative analysis (case studies, local surveys).
Local government
Effective local government capacity is fundamental to the implementation of ORF. Ireland’s system of local and regional governance has evolved considerably over the past decade, moving from the reform ambitions set out in Putting People First (2012) to the current framework established by the 2014 Local Government Reform Act. While these reforms have provided a clearer institutional map, many of the challenges around co‑ordination, resources and rural sensitivity persist.
LAs play a critical role in delivering ORF through initiatives such as Town Centre First, local community development committees (LCDCs) and Local Economic and Community Plans. These mechanisms provide vehicles for integrating economic, social and community objectives at the local level. However, local government capacity differs significantly across authorities. Smaller or more rural authorities face constraints in staffing, analytical capability and fiscal autonomy, which limit their ability to lead strategic initiatives or access complex funding streams.
The abolition of town councils expanded territorial coverage but also reduced local representation in some areas, requiring municipal districts to balance broader geographic responsibilities with community proximity. Although the 2014 reform clarified governance structures, practical devolution of powers remains limited. LAs continue to rely heavily on central-government grants, and many of the functions most relevant to rural well-being, housing, health and transport remain controlled by line departments.
Could municipal districts do more?
Some argue that the governance architecture certainly exists, but local discretion and autonomy remain limited. While municipal districts could provide the capacity to extend sub-county government to both urban areas and their hinterlands, their actual role and capabilities remain unclear (Boyle et al., 2021[77]). The key findings from the Municipal Districts: A Review (Boyle et al., 2020[78]) highlight ambiguity in their roles and status, and variation among LAs in how municipal districts are structured and supported. However, a core strength of municipal districts lies in their potential for community engagement. They have proximity to, and responsiveness toward, local communities, and their meetings provide opportunities for local input and representation. Empowering municipal districts by harnessing this strength, for example through more formalised facilitation of local participation in foresight meetings on the green transition or co-design processes, could enhance their contribution to place-based development.
Limited revenue
Limited amounts of own-source revenue make it more difficult for local governments to effectively engage in local economic development (Figure 4.17). While national investments aim to distribute funds more evenly across regions, final spending decisions still rest with central government. Without adequate revenue-raising powers, local governments rely on funding from the Exchequer of Ireland and the European Commission. However, national and EU programmes come with constraints and predetermined outcomes that may not align with the specific needs of rural areas. This situation hampers local governments’ ability to move beyond delivering centrally funded programmes and limits the development of comprehensive, place-based frameworks that address local priorities when available resources and expected outcomes do not align effectively.
Source: Based on Vammalle, C. and I. Bambalaite (2021[79]), “Funding and financing of local government public investment: A framework and application to five OECD countries”, https://doi.org/10.1787/162d8285-en.
National government sets the parameters of local government responsibilities and financial autonomy. In Ireland, these parameters remain narrow. The OECD (OECD, 2023[7]) notes that Ireland stands out as the OECD country with the highest level of subnational public investment funded by central capital transfers. These transfers account for around 90% of subnational capital expenditure and are specific-purpose grants that offer little discretion on how funds are spent. In addition, central government frequently funds officers in local government to deliver centrally designed policies, allowing no scope to tailor delivery to local needs
Indeed, 53% of LA revenue is now classified as “locally sourced” (commercial rates, service charges, local property tax or LPT). However, commercial rates and LPT are heavily nationally regulated, not locally autonomous in setting or use. The LPT is set within narrow central-government parameters, and equalisation adjustments are centrally managed. Specific-purpose grants (still nearly half the total) come with tight conditions on use. So “locally sourced” does not necessarily equate to “locally discretionary”. Thus, Ireland’s local governments still have very limited fiscal autonomy, even if revenue technically originates from local sources.
An observation from the 2023 OECD paper “Towards balanced regional attractiveness in Ireland: Enhancing the delivery of the National Planning Framework” (2023[7]) highlights the limited fiscal capacity of Irish local government and its implications for delivering balanced territorial development.
In 2020, subnational revenues accounted for only 10.6% of total public revenue (just 2.4% of GDP), placing Ireland among the most centralised systems in the OECD and EU27. The majority of local funding – about three-quarters – comes from central-government grants and subsidies, significantly exceeding the OECD unitary average of 53.3% and the EU27 average of 46.6%. This reliance increased during the pandemic, with additional transfers for COVID-19, housing and transport infrastructure.
Own-source revenues remain limited, with tariffs and fees comprising 11.7% of local revenue, and local taxes only 8.3%, far below international benchmarks (35.4% in OECD unitary countries). This constrains local governments’ capacity to fund and tailor development initiatives independently.
While Ireland’s National Development Plan aims to disperse investment more evenly across the territory, decision making remains largely centralised. The 2021 preliminary assessment of the plan revealed that regional cities received a disproportionately low share of large-scale investments relative to their projected growth, raising concerns about alignment with the NPF’s compact growth objectives.
This centralised fiscal structure poses a challenge for rural and regional development, limiting the ability of local governments to act as effective delivery agents in a place-based policy system.
Source: OECD (2023[7]), “Towards balanced regional attractiveness in Ireland: Enhancing the delivery of the National Planning Framework”, https://doi.org/10.1787/3df116ad-en.
Lack of capacity at the local level
The question of capacity also relates to the ability of local councillors to effectively deliver rural development. There is a view that the capacity developed by the local action groups and local development companies has been reoriented to local programme co‑ordination and oversight, placing more emphasis on structured, council-level co‑ordination rather than solely community-led action. The 2016 report The Changing Landscape of Local Government notes that the introduction of statutory committees and more bureaucratic co‑ordination (like LCDCs) has led to concerns about the loss of bottom-up, community-led structures, replacing them with top-down administrative oversight, potentially subject to greater political influence and less responsive to local needs (Forde et al., 2016[80]).
There are also questions about place-based identity and engagement, with the LAs being too large to embody meaningful place-based identity for community development. Irish LAs are relatively large and population-based, particularly following the 2014 merger of town councils into county structures. While municipal districts and their councillors do provide a sub‑county layer of local representation, research and OECD reviews suggest that the loss of stand‑alone town councils can reduce local distinctiveness and identification, potentially weakening engagement and perceived representation in some communities.
Meaningful place-based identity for community development refers to a scale of governance and sense of belonging that enable residents to participate actively in decision making and collaborative local initiatives. The OECD report Place‑Based Policies for the Future stresses that effective place‑based policies depend on matching the scale of governance to citizens’ attachment to place (OECD, 2025[81]). It finds that local identity and trust are crucial for mobilising local assets and engaging residents in long‑term co‑production processes, particularly in smaller‑scale or networked governance arrangements. Table 4.4 summarises benefits and challenges of place-based policies according to where and when they occur.
OECD data show that 70% of deliberative democratic initiatives across member countries occur at the local or regional level, where proximity creates stronger civic trust and participation (OECD, 2025[82]). Smaller‑scale institutions are better able to institutionalise participation and sustain co‑production practices over time. In the Irish context, county-level LAs are often too large and administratively distant to sustain this sense of shared identity, particularly in rural or peripheral areas. Smaller units, such as municipal districts, parishes or local community networks, tend to provide a stronger territorial and social basis for effective community development.
OECD analyses of Estonia (2025) and Poland (2021) demonstrate that empowering municipalities and counties through multi‑level co‑ordination and participatory budgeting fosters higher alignment between development objectives and citizens’ lived realities (OECD, 2025[83]; 2021[84]). The broader point is that scale and connectedness matter: when local governance operates at a level that people identify with, engagement and co-production of development outcomes become far more sustainable.
Moving responsibility for rural development functions such as the move to Local Community Development Committees as lead partners for LEADER, and the integration of some formerly community‑based structures into county‑level has prompted concerns about capacity to maintain locally responsive delivery and about transparency linked to decision making. While statutory mechanisms for accountability and transparency exist, several analyses highlight that the increased scale and administrative centralisation following the 2014 reforms weakened local responsiveness and reduced proximity between decision makers and communities (The Labour Party, 2024[85]) (Council Review, 2025[86]). The Association of Irish Local Government and independent councillors argue that municipal districts lack adequate independent budgets and devolved power, which limits their ability to tailor local development responses effectively (AILG, 2024[87]).
Historically, Irish local politics has been shaped by clientelism, where elected representatives acted as brokers between citizens and the state. Clearly, there is an imprecise line between the normal efforts of an elected official to provide constituent services and favouritism. By limiting local elected officials’ capacity to influence events in their jurisdiction, the problem of clientelism has been reduced but it may have led to decision making that takes place too far away to fully incorporate important local knowledge. Although administrative and governance reforms have reduced overt clientelism, the Council of Europe found that Irish local government lacks autonomy, with limited decision-making powers and weak accountability between councillors and executives, creating an environment susceptible to personalistic politics rather than programmatic governance (Prebilič and Helgesen, 2023[72]).
The local government structure includes a formal mechanism for the representation of the community and voluntary sector through public participation networks (PPNs). PPN membership is open to groups representing community and voluntary interests, social inclusion interests and environmental interests. Feedback from PPNs and independent reviews indicates that a perceived power imbalance between PPN representatives and elected councillors can limit the PPN’s ability to influence policy outcomes (DRCDG, 2023[88]). While councillors rightly retain formal decision‑making powers through their electoral mandate, evidence suggests that the effectiveness of participatory engagement depends on the strength of local relationships and on whether councillors and officials actively support the PPN’s deliberative role (DRCDG/PPN, 2019[89]).
Key takeaways: Policy implementation
This section applies OECD Principle 9, which focuses on a whole-of-government approach to rural policy implementation, to assess Ireland’s institutional framework for rural development. It finds that ORF provides an invaluable systemwide view of rural commitments, enhancing accountability across departments on rural matters. Few OECD countries have achieved this level of integration.
The challenge now lies not in scope but in steering coherence, elevating the DRCDG’s role from information collection to strategic direction. Ireland’s regional assemblies, though lacking executive authority, are well positioned to act as analytical and co‑ordination hubs, particularly for managing rural‑urban dynamics. At the local level, Irish LAs remain heavily dependent on central-government grants, with limited fiscal autonomy and discretion. This dependency constrains their ability to tailor interventions to local needs.
Key takeaways
Maintain the whole-of-government approach: ORF employs a unique, ambitious, complex and cross‑government strategy at the forefront of putting the OECD’s recommendation for a whole-of-government approach to rural policy into practice. Patience and incremental action will be key to sustaining buy-in.
Shift from data collection to strategic influence: The DRCDG’s challenge is to evolve from monitoring a vast strategy to orchestrating coherence, alignment and strategic dialogue across departments.
Anticipate incremental, evidence-based progress: Future progress will rely on small but strategic reforms, embedding typologies, piloting functional approaches and aligning national policies with local realities.
Support regional assemblies to take the lead on rural-urban dynamics: Regional assemblies’ mixed composition (urban and rural councillors) provides an underused platform for structured dialogue on shared challenges, housing, transport, enterprise and infrastructure. Similarly, their analytical and co‑ordination capacities can bridge rural and urban policy domains and integrate spatial typologies (e.g. CSO six-way split) into regional data systems like the RDM to enable more place-sensitive policymaking.
Strengthen municipal districts’ role in participatory governance: Municipal districts’ participation in governance and foresight planning can enhance the community connection with local decision making, offsetting the effects of centralisation.
Effective rural development depends not only on good design, but also on delivery capacity. Without sufficient resources, staffing or institutional backing, even well-intentioned strategies risk underperformance. Moreover, a strong monitoring and evaluating process enables opportunity for improvements and refinements.
ORF evolved from a robust consultative process that involved a diverse range of stakeholders, including public bodies, private enterprises, social and non-profit actors and community-led organisations. So, the strategy was developed and refined through feedback from a wide swathe of rural stakeholders in Ireland. At the national level, the DRCDG has an advisory group comprised of representatives from different departments that meets twice a year. The DRCDG facilitates a number of stakeholder groups, e.g. educational leaders, business networks, etc., and sits on different advisory boards at the regional level. However, structural constraints such as limited financial resources, fragmented co‑ordination mechanisms and overlapping mandates across government levels continue to pose challenges.
Local involvement is central to almost all of the measures for which the DRCDG are responsible. It relies heavily on volunteers and has developed a volunteering strategy. The PPNs, established under the Local Government Reform Act 2014 to ensure community voices are represented in LA decisions, are funded and supported by the DRCDG, which is responsible for their national policy and co‑ordination. Community cohesion is well embedded in Irish policy and is a successful component of ORF. There is considerable community buy-in with people giving a lot of their time for free to community initiatives. The LEADER programme clearly states that it operates on a community-led approach to rural development. The strength of rural community spirit and the level of volunteering are very positive features of rural areas.
Risk of over consultations
Another hurdle in Ireland’s governance system is the civil service culture. Traditionally, Irish public administration has tended to prioritise generalist competence over specialist expertise (Boyle and O’Riordan, 2021[90]). This tradition is coupled with a measured resistance to change and a cautious, consensus‑oriented approach to decision making, reflecting what MacCarthaigh (2021[91]) describes as a policy analysis environment constrained by risk aversion, political sensitivity and limited administrative discretion within a hierarchical structure. Similarly, the OECD 2023 review of Irish public administration noted a system that often emphasises compliance and procedural consistency over innovation and policy experimentation (OECD, 2023[92]).
This implicitly shifts the burden of technical problem-solving onto consultants, as the main source of technical expertise that underpins public policy analysis. Academics, non-governmental organisations, professional associations and citizens provide much of the technical information that flows into civil service analysis. Ireland’s commitment to inclusive engagement is well established, illustrated by guidance jointly developed by the DRCDG and community organisations, and has strengthened legitimacy and trust in policymaking. However, when consultations must perform both democratic and technical functions, they risk slowing implementation and diffusing accountability.
The Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation’s 2025 report on stakeholder engagement found that extensive consultation processes, though essential for legitimacy, can “slow or complicate the timely implementation of infrastructure and policy projects” because of overlapping feedback loops and procedural demands (DPEIPSFD, 2925[93]). Stakeholders interviewed for this review echoed this dual reality: a strong commitment to inclusion, but also prolonged decision making and co‑ordination fatigue. As highlighted in Box 4.13, designing consultation processes with clear feedback loops, realistic expectations and transparency about influence is essential to prevent fatigue and maintain trust. For ORF II and future reforms, the government should balance inclusive consultation with stronger in-house analytical and technical capacity, otherwise consultations will keep doing too much heavy lifting.
The OECD report Strengthening Policy Development in the Public Sector in Ireland (2023[92]) highlights that listening to citizens’ views does not necessarily mean these views can, or should, be implemented. Policymakers are often confronted with contradictory or unrealistic suggestions that may not account for evidence, resource constraints or legislative processes.
When consultations are not carefully curated or expectations are not managed, they may paradoxically erode trust in government rather than strengthen it. The report therefore stresses the importance of clarity about when and how to involve the public, the degree of influence participants will have and how feedback will be used.
For rural development programmes, this finding underscores the need for clear feedback loops, transparent communication and realistic goal setting, especially when relying on volunteers and community groups whose sustained engagement depends on visible results. Several OECD and partner countries have introduced structured processes to ensure that stakeholder feedback is acknowledged and acted upon, closing the feedback loop through transparent communication:
Colombia: The Ministry of Environment and Sustainable Development publishes responses to stakeholder comments online. If a comment is rejected, the website explains the decision; if accepted, it outlines how the feedback was integrated into the proposal.
Iceland: Policymakers publish consultation conclusions on the government’s online portal, summarising key stakeholder inputs, proposed improvements and areas of concern.
Slovak Republic: When a comment on a draft regulation receives more than 500 reactions during public consultation, regulators are required to respond and engage directly with stakeholders. For each comment, policymakers indicate whether it is major or minor, and whether it has been accepted, rejected or partly accepted, providing clear reasoning.
Source: OECD (2023[92]), Strengthening Policy Development in the Public Sector in Ireland, https://doi.org/10.1787/6724d155-en.
Over dependence on volunteers to deliver key strategic objectives
ORF places significant emphasis on bottom-up delivery mechanisms, community-led initiatives, which is in line with OECD guidance on empowering rural communities. However, while these mechanisms remain central to programme delivery, they function within a highly centralised governance system. LAs and community bodies often have limited discretion, yet rely heavily on voluntary capacity to implement national priorities. A question that should probably be asked is: why would volunteers commit to delivering somebody else’s vision of their community? This dynamic reflects a structural imbalance between local initiative and national control, rather than an outright shift away from the bottom-up approach.
While civic engagement is vital, this presents some visible challenges. In some ways, it shifts the responsibility for rural development to local communities by prioritising a bottom-up approach and allowing local people to identify their own needs. Yet, capacity and strategic understanding vary. For example, the Town Teams, made up entirely of volunteers working with town regeneration officers, have reported that some of the town centre plans are overly ambitious, likely linked to varying skill bases within volunteer groups.
Volunteers are essential, but core rural development functions should not be outsourced entirely to unpaid actors if the aim is to build resilient and inclusive rural communities. This dependence could be linked to the fact that staff recruitment has proven increasingly challenging for local planning authorities (OECD, 2025[94]). There is a potential for uneven service provision, gaps in coverage and, in some cases, the capture of local initiatives by narrow self-interests. Simply put, people will volunteer for what they are interested in doing, which means that other community needs could go unmet due to a lack of interest. Communities with strong voluntary networks may thrive, while others without sufficient social capital risk falling behind. There are currently no clear mechanisms to fill these gaps except through greater efforts to activate new volunteers.
Discussions on the ground also reveal signs of volunteer fatigue, given the level of commitment and the range of tasks being placed on a relatively small pool of individuals. The same volunteers are often approached repeatedly, leading to burnout. There is also a broader issue of accountability, as volunteers are largely self-appointed and not formally mandated. Moreover, many structural issues common across rural communities, such as access to housing and basic services, cannot realistically be addressed at the community level and require top-down intervention.
At the community level, competition for funding between communities, and between communities and the public or private sectors, can lead to inequalities depending on the capacity of different groups to organise, bid and manage projects. There is currently limited animation or structured capacity building to support communities in navigating these processes. The competitive aspect of rural funding needs to be carefully managed to ensure that competition does not undermine the trust and collaboration between stakeholders, which are critical for the success of place-based approaches.
To sustain the ambition of ORF over the long term, future iterations of the strategy will need to recognise and address these risks. This could include providing some baseline staffing or technical support for key community-led initiatives, setting clearer principles to safeguard against exclusivity or service gaps, and strengthening capacity-building programmes to encourage wider and more inclusive participation. In addition, better motivation for volunteers could require devolution of greater decision-making authority to the people who are volunteering to increase their sense of ownership, and to allow more appropriate local solutions.
Monitoring and evaluation
The realities of a whole-of-government approach
While the volume of policy measures in ORF, 170 or more in total, could be seen as overly ambitious or diffuse, a more strategic reading suggests that this breadth is a strength. The strategy could have opted to include only those measures under the direct control of the DRCDG, perhaps a more manageable 12 or 15. Assembling rural-relevant actions from across government enables a comprehensive view of what each department has committed to delivering for rural Ireland. This kind of information is integral to taking a whole-of-government approach to rural development not only for tracking cross-government commitments but also for shaping future dialogue, policy alignment and accountability. This approach also underscores the complexity of implementing what the OECD itself prescribes.
The OECD consistently encourages governments to think about the direct and indirect policies that impact rural areas, emphasising that rural well-being depends not only on rural affairs departments but also on co‑ordinated actions in education, health, transport, environment and beyond. The DRCDG’s approach demonstrates this principle in action. It has made visible the interdependence of rural policy domains as well as exposed the operational complexity that accompanies it.
The challenge for Ireland is not the number of measures per se, but the framework through which they are monitored, nudged forward and adapted over time. This signals the need for new governance capacities: not simply managing delivery, but orchestrating coherence across diverse actors. The current administrative burden of monitoring 170 or more measures is considerable, particularly for a small department tasked with producing biannual progress reports. The DRCDG needs to move from information collection to strategic influence, preserving the intelligence value of the strategy while alleviating its administrative strain.
By bringing the policy measures under one strategic umbrella, it has created an unprecedented degree of visibility into what government departments are doing, or should be doing, on rural issues. Other OECD countries have taken steps to institutionalise cross-ministerial and territorial dialogue to achieve this balance between central leadership and local ownership. For example, Chile’s Territorial Dialogue Boards bring together national, regional and municipal actors to co-ordinate policy delivery and monitor outcomes across sectors (see Box 4.14).
The Chilean government has pursued important decentralisation and regionalisation reforms. At the regional level, the deliberative power is in the hands of a regional council, whose members have been directly elected every four years since 2014. In 2018, the regional governance model that had been in place since 1992 was transformed into a “mixed” regional system (both deconcentrated and decentralised). Since 2021, there is a full self-government system, with direct election of the regional executive (governors) by popular vote every four years. In parallel, in 2018, the process began of transferring responsibilities from the national government to the new self-governing regions on land use planning, economic and social development and culture. The Inter-ministerial Committee of Decentralisation supports and advises the President of the Republic on the competences to be transferred, which can result from presidential initiative or upon request from the regional government. Still, together with the new elected governors, a presidential delegate represents the central level in each of the 16 regions and is responsible for public security, emergencies and co-ordinating public services. The ministerial regional secretaries (SEREMIS) are also deconcentrated entities representing each ministry at the regional level.
Source: OECD (2022[95]), Regional Governance in OECD Countries: Trends, Typology and Tools, https://doi.org/10.1787/4d7c6483-en.
The path forward cannot be one of sweeping transformation, but rather one of incremental and deliberate action. This includes strengthening institutional mechanisms, such as working groups, interdepartmental dialogues and rural-proofing tools, that can convert cross-government awareness into cross-government action. It will also require patience. Success will likely come not through sweeping reforms but through targeted, evidence-driven engagements, for example using the six-way rural classification to examine how national spatial policies, such as compact growth, interact with different types of rural areas to help ensure that implementation remains sensitive to diverse local conditions. Other examples include revisiting the local economic zones recommendation by CEDRA and convening a group to consider how that could be brought forward. These small, strategic wins will be key to sustaining buy-in and demonstrating the long‑term value of this whole-of-government approach to rural development.
The sense of ORF’s achievement is that it has successfully established the scaffolding for rural development, launching well-funded schemes, expanding connected hubs and embedding new local roles such as town regeneration officers. However, while the strategy’s objectives are clearly articulated at the national level, the next challenge lies in evidencing and aligning local implementation with these overarching goals.
Top-down monitoring
Monitoring and evaluation are critical components of ORF. At the central level, the DRCDG has developed a highly visible system to track progress, gathering information from departments and agencies on the implementation of the priorities, and publishing regular public progress reports. This top-down monitoring provides an important administrative overview of policy delivery across government. ORF would be stronger and easier to evaluate if it included more robust data and focused its objectives around those data. For example, what percentage of the population lives in rural areas as defined by the CSO? How did it change between 2011-2016 and 2016-2022 and how does it vary across the state? What is the impact of ageing in the most rural areas, especially in the West and North-West? What are nuanced housing challenges for the younger generation in both urban and rural areas? The impact is probably greater in urban or rural areas within commuting distances as these are the places where the younger cohorts are most strongly represented. The 2022 Census provides some data on the levels of in-migration to each county and possibly to smaller areas. This type of robust data should be included in ORF II.
The monitoring and evaluation process is hindered by several hurdles. The first is that there is no agreed definition of “rural”, and no clear use of definitions of “rural”, different or otherwise, across different departments. This makes it difficult to monitor progress. In some departments, we saw that “rural” amounted to everywhere outside of Dublin. Without different layers of gradation, it is impossible to assess impact in different places. Going forward, further progress needs to be made on the acceptance of the CSO definition. This will be difficult because, while there is no formal political opposition to defining “rural”, rather, there is a diversity of views and administrative preferences on which definition most accurately reflects Ireland’s varied geography and social structure.
Effective rural policy depends not only on design but also on the ability to monitor implementation, assess outcomes and adapt based on feedback. Both Costa Rica and Germany offer examples of how monitoring and communication mechanisms can support more responsive rural development.
In Costa Rica, the Rural Development Index serves as the main tool for evaluating policy initiatives at the district level. It includes indicators across five domains: infrastructure and services, equity and inclusion, institutional management, the economy and ecosystems. Data are sourced from national institutions and international partners such as the Economic Commission for Latin America and the Caribbean. Legal provisions also require the use of Territorial Councils for Rural Development, multi-stakeholder bodies that include local governments, social actors, private companies and civil society. These councils use the index to monitor progress and guide territorial plans. Efforts are underway to enhance the index’s usability, including the creation of interactive dashboards and user-friendly maps. However, challenges remain, especially the limited availability of granular data at the district level, which hinders deeper impact assessment.
In Germany, several national institutions contribute to a robust monitoring system. The federal and state statistical offices publish regional panel data on topics such as demographics, labour markets and health, though not all datasets are rural-specific. The Federal Institute for Research on Building, Urban Affairs and Spatial Development maintains a spatial monitoring system with over 600 indicators available through an online atlas. Complementing this, the Thünen Institute provides a dedicated rural-focused atlas with over 100 indicators, including detailed information on access to basic services by different modes of transport. These tools support both national planning and local-level diagnosis, offering layered insight into spatial and rural development trends.
Source: OECD (2023[47]),
Bottom-up monitoring
There is a monitoring and evaluating gap at the local level. It is much harder to systematically track how ORF effort is translating into real improvements in rural communities. While some anecdotal evidence suggests that certain areas, particularly town centres, are seeing visible impacts, the broader rural landscape, including hinterlands and remote areas, remains less systematically assessed. There is no structured bottom-up monitoring system that captures rural people’s experiences of how the strategy is affecting their lives, well-being and opportunities.
During discussions, the DRCDG proposed using the six-way rural typology (six-way split) to assess the implementation of ORF by mapping the 170 or more priorities across different rural types. This proposal is still in its early stages, and no results have yet been generated. The intuition behind the approach is understandable: the DRCDG has progress reports showing the delivery of the different actions and wants to demonstrate that these actions produce good results. However, from a conceptual standpoint, there is a risk of conflating action delivery with improvements in well-being. True well-being measurement is about quality of life as defined by rural communities – a bottom-up, people-centred exercise – and should not be assumed to automatically follow on from completing government priorities. Tying well-being assessments too tightly to administrative progress risks losing the authentic voice of rural communities and obscuring whether the strategy delivers real, lived improvements.
It is important to reflect carefully on the relationship between action delivery and rural quality-of-life outcomes. There is also a deeper risk in tying well-being measurement too tightly to the delivery of the 170 or more priorities. Even if all of the measures are technically implemented, this would not automatically mean that the quality of life in rural areas has improved. Structural constraints, such as the lack of rural differentiation, limited local resources, inflexible planning systems and heavy reliance on volunteerism, continue to shape rural experiences. If these enabling conditions are not addressed, the impact of policy measures could be muted or even create unintended frustrations on the ground. There is, therefore, a risk that rural communities may not feel meaningful improvements in their quality of life, even if government reporting suggests that actions have been completed successfully. This could undermine the legitimacy and credibility of ORF over time.
Gotland, Sweden’s largest island region, illustrates the complex realities of measuring well-being in island territories. While it offers a high quality of life and a clean environment, Gotland faces significant demographic, socio-economic and environmental challenges. These include an ageing population, high prevalence of age-related illnesses, gender health disparities and concerns over obesity and alcohol consumption. Elderly residents also face social isolation, despite an otherwise active and engaged community life.
Geographic isolation, seasonal economies and a reliance on narrow sectors like tourism, agriculture and fishing make island regions particularly vulnerable to external shocks. Environmental risks, such as droughts and extreme weather, compound these challenges. Despite these vulnerabilities, standard well-being metrics often fail to capture essential dimensions of island life, such as community cohesion, cultural heritage and connection to nature.
Gotland’s experience underscores the data limitations in capturing nuanced, place-specific well-being on islands. Small and dispersed populations, gaps in local data infrastructure and lack of co‑ordination between governance levels make it difficult to generate accurate, actionable insights. Commercial data systems often overlook island-specific issues, and traditional indicators may not reflect lived realities.
To address these gaps, emerging strategies include developing island-specific indicators, investing in mobile data collection tools, establishing regional data hubs and encouraging community participation in monitoring efforts. Strengthening multi-level governance, improving service access and fostering sustainable economic metrics are also key. Cross-national collaboration, such as between Croatia, Greece and Sweden, can enhance capacity, create shared benchmarks and amplify learning.
The case of Gotland highlights why measuring rural and island well-being requires tailored, participatory and resilient data systems, especially where traditional models fall short.
Source: (OECD, 2023[58]) (OECD, 2023[62])
Key takeaways: Policy tools (monitoring and engagement)
This section applies OECD Principles 10 and 11, both of which focus on the policy tools used to deliver and monitor the effectiveness of ORF. It finds that ORF has established a strong participatory foundation, engaging public, private and community actors. Ireland’s culture of civic participation remains a defining strength, yet sustaining it requires clearer boundaries, baseline staffing for key initiatives and empowerment measures that give volunteers a genuine sense of ownership. The monitoring system could be strengthened through a shared definition of “rural”, fuller integration of CSO spatial typologies and more outcome-focused metrics. Bottom-up monitoring should also be enhanced to better capture the lived experience of rural residents and to link administrative progress with tangible improvements in well-being.
ORF II should therefore prioritise recalibrating participatory models, harmonising definitions of “rural”, strengthening outcome measurement and connecting community-level insights to national evaluation frameworks.
Key takeaways
Mitigate the risk of over-consultations: Consultation processes have become the default mechanism for gathering expert input and innovation. This over-reliance is double-edged: it upholds transparency but slows delivery, fragments accountability and can distort influence among actors. Moreover, where expert opinions differ, there is little internal capacity for choosing among them.
Volunteerism as a double-edged strength: Rural community spirit is a major asset, yet overdependence on volunteers for programme delivery creates uneven capacity, burnout and accountability issues. Delivery may favour communities with stronger social capital, widening gaps between places with different organisational capacities.
Address the discretion-responsibility mismatch: Local bodies have limited fiscal autonomy and discretion (90% of capital from central transfers), yet communities shoulder delivery responsibilities. This structural imbalance leaves volunteers implementing national priorities without adequate resources or decision-making authority to shape local solutions.
Monitoring lacks consistent data definitions and outcome measures, particularly on well‑being. Local feedback and lived-experience data are underdeveloped, progress reports risk equating completion of actions with real improvements in quality of life.
One of the distinctive features of ORF is that it reveals the direct actions for rural development (e.g. managed by DRCDG), alongside the indirect ones managed by departments without a rural lens. This dual perspective is welcome and not always visible in other OECD member countries. In fact, what is more common among member countries is that different agencies or ministries implement policies that deeply affect rural areas without recognising them as being rural in nature. Additionally, what this approach revealed is just how complex taking a whole-of-government approach to rural development is in practice. It underscored the need for cross-governance co-ordination on rural issues and implicitly why tools to help unpack the potential impact of policy on rural areas (e.g. rural proofing) are needed.
This chapter applied the OECD Rural Well-Being Framework and the OECD Principles on Rural Policy (2019) as the method of analysing ORF. This anchored Ireland’s national rural policy in an internationally recognised framework for developing inclusive, place-based rural development. The analysis revealed that the:
Policy objectives are sound despite the challenges in translating them into integrated territorial policy delivery
Policy targets need more differentiation
Policy implementation has some structural gaps
Policy monitoring and engagement need to evolve to be more dynamic and impact-driven
Under Principles 4-6 and 8 (policy objectives), the analysis highlighted progress in economic and environmental diversification but also identified persistent weaknesses in labour-market activation, entrepreneurship ecosystems and resilience planning. ORF was shown to be conceptually strong, aligning well with OECD guidance on cross-sectoral well-being, rural-urban linkages and spatial sensitivity. However, gaps remain in translating this vision into integrated, territorial policy delivery. Economic diversification emerges as a central challenge. Ireland’s growth model, anchored in FDI, export-oriented manufacturing, agrifood and agritourism, has so far delivered high returns but exposes rural areas to volatility and dependency. The next phase of ORF should focus on developing place-based ecosystems that nurture enterprises, strengthen SME and social enterprise capacity, and connect digital and physical infrastructure to local economic needs. Tourism and broadband investment are critical enablers, but their benefits depend on complementary measures including skills development, innovation, access to finance and the ability to retain value locally.
Achieving sustainable, resilient rural futures requires institutional continuity and foresight. Climate action, land stewardship and social inclusion must be integrated into every aspect of rural policy, ensuring that green transitions generate shared prosperity. Embedding participatory foresight and long-term planning mechanisms, such as a Rural 2040 strategy, would allow Ireland to move from short-cycle policy responses to anticipatory, adaptive governance. By balancing inclusion with strategic vision, Ireland can transform ORF II into a durable framework that strengthens both the economic and social fabric of its rural regions.
Under Principles 1-3 and 7 (policy targets), ORF contains over 170 measures across economic, social and environmental domains, signalling robust commitment to rural revitalisation. However, many interventions remain anchored in national rather than territorial logic, with limited attention to the functional and spatial diversity of rural areas while the enduring “rural idyll” still shapes perceptions of rural. A more functional, place-based approach would better capture the diversity of rural Ireland, integrating typologies such as the CSO six-way classification, while acknowledging inter-settlement linkages and hinterlands as living, productive spaces beyond town centres. The path forward lies in sharper spatial intelligence. institutionalising typology-based planning and embedding rural-urban linkages into national frameworks linking local evidence to regional strategies and national priorities.
Under Principle 9 (policy implementation), the review found that ORF’s breadth demonstrates genuine whole-of-government ambition, yet institutional follow-through, particularly at the subnational level, remains constrained by fiscal and administrative centralisation. Ireland’s regional assemblies, though lacking executive power, are well positioned to act a s analytical and co‑ordination hubs. Embedding typologies such as the CSO six-way classification and fostering structured rural-urban dialogue would allow assemblies to operationalise functional approaches to planning, better reflecting the diversity of Irish territories while enhancing regional coherence and supporting rural development. At the local level, municipal districts, while small, could be empowered through participatory foresight processes or co-design to lead meaningful local engagement.
Applying Principles 10-11 (policy tools: monitoring and engagement) reveals the presence of structural frictions between Ireland’s inclusive participatory culture and its centralised governance model, where extensive consultation compensates for limited analytical capacity but can dilute accountability. The analysis highlights that Ireland’s culture of civic participation remains a defining strength but sustaining it requires more support. The DRCDG’s monitoring system effectively tracks programme implementation but needs stronger data foundations and better outcome metrics. Bottom-up monitoring remains limited, making it difficult to capture rural people’s lived experience or link administrative progress with well‑being improvements.
The OECD conducted seven virtual meetings and 2 field visits involving over 600 government officials and stakeholders as part of the research for the Rural Review of Ireland. The virtual discussions included were as follows:
Introduction and Overview of Our Rural Future (April 2024)
Innovation and Entrepreneurship in Rural Ireland (May 2024)
Access to Public Services: Housing, Broadband, Health, and Skills (May 2024)
Economic Development and the Local Labour Market (May 2024)
Rural Well-Being (May 2024)
Meeting with Former Irish Government Officials (September 2024)
Meeting with the Irish Higher Education Institute Network (October 2024).
These were complemented by field visits to:
Dublin and Limerick in June 2024
Dublin and Roscommon in September 2024.
The discussions and visits were supplemented by a Background Report on Rural Development in Ireland prepared by the Government of Ireland (OECD, 2024[12]). The objective of the report and activities was to engage with various government and non-government representatives at national, regional and local levels to understand the approach to rural policy in Ireland. The discussions focused on identifying challenges, exploring areas of opportunity and assessing strengths and weaknesses. This document outlines some preliminary findings and observations on rural development policy in Ireland that emerged from these discussions. It does not cover all the issues that will be analysed in the final report but instead provides an overview of the recurring themes.
The OECD rural reviews involve peer reviewers, delegates from the Working Party for Rural Policy (WPRUR), and the Regional Development Policy Committee. These are government officials currently working on rural or regional policy in their countries. The peer-reviewing countries participating in the OECD Rural Review of Ireland are the Netherlands, Denmark, Switzerland and Norway. Representatives from each of these countries contributed to the discussions and shared their insights on the key messages highlighted in this report.
Target strategies to make rural regions more attractive to live and work. Recognise that childcare, transport, water and digital infrastructure shape where people and businesses choose to locate. Design and co‑ordinate service delivery to reinforce the liveability and competitiveness of rural communities.
Invest in new entrants in rural places e.g. migrants and connect them new opportunities provided by green skills. Invest in people and inclusion. Expand modular, place-based training and ensure gender and migrant inclusion in the green transition.
Build a well-being framework that measure what matters to rural people and use it to track outcomes, develop mor nuanced strategies and guide investment decisions.
Together, these steps would translate national progress into balanced prosperity anchoring Ireland’s rural future in the OECD Principles on Rural Policy and the Well-being Framework.
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