Monday, February 7, 2011

Government crisis hits democracy score

Ireland ranks 12th of 167 countries and territories covered in the Economist Intelligence Unit's democracy index (of those countries, we adjudge 26 to be "full democracies"), but its score has fallen from 9.01 in 2008 to 8.79 in 2010. Ireland's high ranking reflects, inter alia, the highest-possible score for civil liberties--independent international surveys over decades have shown that political, press and civil liberties are among the most comprehensive and best enforced in the world. Ireland also scores well in the electoral process category, reflecting the openness and fairness of the electoral system, but misses out on a maximum score owing to a lack of transparency in the system of funding political parties. Ireland's score for political participation, although high on a global basis, is the second-lowest-scoring sub-component, owing to a comparatively low proportion of women in politics, falling levels of political party membership and a relatively high percentage of survey respondents saying that they do not follow politics.
Ireland's score in the democracy index has been pulled down in 2010 primarily because of a sharp drop in its score for government functioning. This reflects a dramatic drop in support for the ruling government, owing to its perceived culpability in causing the economic depression and prioritising of party over national politics. Intensified dissatisfaction with the prime minister, Brian Cowen, culminated in January 2011 with an attempt to unseat Mr Cowen from his position as leader of Fianna Fail, the largest party in government. Fianna Fail's popularity has fallen to 14%, putting it well behind the two main opposition parties, Fine Gael and the Labour Party, in opinion polls. We expect a coalition between Fine Gael and the Labour Party to emerge following the forthcoming election in the first quarter of 2011, but important policy differences between the two parties exist, namely on how to achieve the agreed fiscal adjustments for 2011-14. The parties in the new coalition will be more evenly matched in size than in the current government, and decision-making may be more difficult. Given the brutal austerity measures that the government will have to implement over the forecast period to achieve the fiscal targets negotiated with the EU and IMF, we expect social unrest to rise significantly in the next few years.

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