
Ireland's economy is 82.4 percent free, according to a 2008 assessment by The Heritage Foundation and The Wall Street Journal, which makes it the world's 3rd freest economy. Its overall score is slightly lower than last year. Ireland is ranked 1st out of 41 countries in the European region, and its overall score is much higher than the regional average.
Ireland has high levels of business freedom, investment freedom, financial freedom, property rights, and freedom from corruption. Government regulation is light. Inflation is low, but Ireland's monetary score suffers somewhat from distortionary EU agricultural subsidies. Foreign investment is restricted only in a few sectors. Financial markets are transparent and open to foreign competition. Property rights are well protected by an efficient, independent judiciary.
Ireland's economy is significantly free, with only two categories slightly below the average world score. Fiscal freedom and government size both score 3 percentage points below average. Government spending as a proportion of GDP is just over one-third, and the top individual income tax rate is a high 42 percent.
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Background:Ireland's modern, highly industrialized economy performed well throughout the 1990s and has enjoyed sustained growth, earning Ireland a reputation as the "Celtic Tiger." The country has one of the world's most business-friendly environments, especially for investment, and enjoys the European Union's second-highest GDP per capita. In January 2003, the government lowered the corporate tax rate to 12.5 percent—far below the EU average.
Because of its pro-business government policies, Ireland receives a substantial portion of U.S. investment directed at the EU. However, it also is struggling with an underperforming health sector, and the provision of decent public services remains a major topic of political debate.
Ireland's ten economic freedomsThe 2008 Index of Economic Freedom covers 162 countries across 10 specific freedoms such as trade freedom, business freedom, investment freedom, and property rights.
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