The flood of emigrants, which had reduced the country’s population from 8 million back in the 19 century to only 3 million, has stopped and even reversed itself. Since 1996, its economy has grown at a 9 percent clip. In 2004, Ireland was deemed to have the highest standard of living in the world. And all thanks to a fiscal reform that has nothing in common with the one proposed by Spain’s current socialist government.    

 

In Ireland, the best advisor turned out to be disaster. Debt was far greater than what the country produced; the unemployment rate hit 17 percent and growth was hardly noticeable. When the economy reached desperation, when the government realized it had tried almost everything and everything had failed, it decided, for once, to listen to the best economic advice. It drastically cut public spending (by more than 20 percent) and started to lower taxes and tariffs. The corporate income tax dropped from 40 percent in 1996 to 24 percent in 2000 and it kept going down to its current rate of 12.5 percent. This change in circumstances acted as a beacon to foreign investment, and it came running.

 

The Irish economy’s transformation has forced leaders to take up other measures, like de-regulating the telecommunication sector, among others, helping to make the country a welcoming place to invest and work. Ireland has gradually climbed the ranks on two economic freedom indexes. It came in at number 3 on the Heritage/Wall Street Journal index and number 9 on the Fraser Institute/Cato Institute index.