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Recasting Ireland’s Consistent Policy Framework for the Coming Yearsthe institutional arrangements which encourage discovery andimplementation of such measures.4.2 RECASTING IRELAND’S CONSISTENT POLICYFRAMEWORK FOR 2003-2005The Council believes that the consistent policy framework outlinedabove still provides a useful guide to the formulation of a strategicapproach that can command the agreement of the social partners.However, in view of the new challenges noted above, the changingdomestic and international environment and the evolution of policy,it is now necessary to describe Ireland’s consistent policy frameworkin new terms. This requires, firstly, that we analyse andunderstand Ireland’s experience in the past decade and a half—ashas been done in Chapters 1 and 2 above. Secondly, it requires thatwe review and recast the relationship between the macroeconomicpolicy, distribution and structural or supply-side measures. Thirdly,it requires that we review and revise the content of policy withineach of the three boxes (macroeconomic, distributional andstructural).4.2.1 The Changing Relationship between Macroeconomic,Distributional and Structural IssuesThe relationship between the three categories of policy has changedover time. In the difficult economic period from the late 1970s tothe late 1980s, the three existed in a vicious circle: the failure toadequately adjust the structure of the economy to internationalcompetition (combined, for some of the period, with adoption of ashort-term orientation in public policy), created a fiscal crisis andrising taxation which, in turn, created distributional pressure inwhich both profitability and real take home pay were eroded.During much of the period from 1987 to 2000, the three existed in avirtuous circle: the macroeconomic, distributional and structuraldevelopments readily supported and reinforced one another. Therapid ‘growth of the cake’, reduced the salience of distributionalissues and itself produced a significant amount of structural change.173