John Snow: The economic policy that unleashed the Celtic Tiger

From a speech by the US Treasury Secretary, given at the Royal Institute of International Affairs, in London
Click to follow
The Independent Online

I recently had a chance to talk with financial, business and academic leaders in Dublin about the creation of the Celtic Tiger economy and the outstanding economic success they have had in recent years. We talked about the specific economic reforms that have been so successful in Ireland and the political consensus that made them possible.

I was particularly delighted to visit with so many of the architects of the new Ireland and get their first-hand sense of how the reforms were put in place. As one of them said to me, "Developing policy was relatively straightforward - something any first-year grad student in economics could have done. The hard part was getting the broad-based consensus from labour, management, the public and politicians to move forward. That took courage, decisiveness and planning."

That strikes me as the real story of economic reform - whether it is Ireland, the United States, Asia or Europe - it takes courage, it takes planning and it takes action. In Ireland, thoughtful political leadership carried the day. Good fiscal policies including income tax rate cuts, government spending restraint and education reforms led to terrific economic growth in that country. They've had nearly 8 per cent growth a year for the past 11 years. They've cut tax rates and reduced expenditures and deficits.

Some say Ireland benefited from good fortune. I say they benefited from good policy. Ireland is proof-positive that pro-growth, free-market policies work.