Ireland Publishes Independent Review of Its Finance Ministry

Posted by Richard Hughes

In the lacuna between the general election in late February and the formulation of the new government earlier this month, Ireland’s Department of Finance (DoF) published the conclusions of an independent review of its performance over the decade leading up to and including the global economic crisis. The review was conducted by three person panel chaired by Rob Wright, former Deputy Ministry of Finance in Canada. 

While the report, entitled Strengthening the Capacity of the Department of Finance, complimented the DoF’s management of crisis itself, its account of the DoF’s performance in the run-up serves as a timely reminder of challenges that all finance ministries face in trying to chart a prudent course through the good times. Looking at the DoF’s advice to its ministers, the Cabinet, and Parliament (the Dáil) over the last ten years, the report found that the DoF did provide early and clear warnings about the pro-cyclicality of fiscal policy in Ireland. However, these admonishments went largely unheeded and, from the late 1990s onward, the fiscal stance of the final budget approved by Cabinet in November and the Dáil in December were consistently looser that that recommended by the DoF in June.

While the authors acknowledge that even the most powerful finance ministry would have struggled to the deflate the atmosphere of optimism that pervaded Irish politics at the time, the report does point to a number of weaknesses in budget process and the DoF itself that further diluted the ministry’s influence over fiscal policymaking:

Wright and his colleagues make a number of recommendations aimed at strengthening the DoF and its role in the budget process going forward, including:

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