THE good news about Northern Ireland is that it now has normal problems. The Troubles, which cost some 3,500 lives in a province of less than 2m, are an unsettling memory; the devolved government in Stormont is stable, if dysfunctional. Ulster’s big challenges are the same as those faced elsewhere in the West: thrashing out a budget, as it did this week, holding down state spending and luring business investment. The bad news about Northern Ireland is that these problems are simply enormous.

Ulster had an Irish recession with a British twist. Like its southern neighbour, a huge property bubble inflated there and then burst. Prices have fallen by 44% since 2007, wiping out construction jobs and forcing indebted households to cut back. Having grown faster than anywhere except London in the decade to 2007, Ulster has lagged behind ever since. By 2013 the region’s gross value added (GVA), a measure of output, languished 13% below the pre-crisis peak. Yet the people of Ulster suffered surprisingly little. Unemployment peaked at around 8%—about half the highest rate seen in Ireland.

For that, credit Ulster’s colossal public sector. This employs nearly one in three workers, compared with less than one in five in Britain as a whole. Public spending per person is higher than in any other region and has fallen only slightly in the past few years (see map). As in Scotland and Wales, university tuition is heavily subsidised and medical prescriptions are free. Ulster folk do not even pay for water. Because tax revenues are also low, Northern Ireland runs a mammoth budget deficit estimated at 33% of GVA. The debate that gripped Scotland last year, over whether the country would be better off independent, is unimaginable there. Much of this is a legacy of the Troubles: from the 1970s British governments poured in cash in an attempt to abate the violence. But it also reflects a tardiness in implementing the austerity demanded by the Treasury in London. Ulster’s headline grant has been cut in real terms by 7% since 2010, but austerity has been so backloaded that the province is only just confronting its fiscal challenges. The public-sector head count, down by 14% in Britain as a whole, has barely fallen. Welfare reforms enacted elsewhere are yet to be implemented. The delay in cutting was a deliberate choice to support the economy through the downturn, says Arlene Foster, Northern Ireland’s enterprise minister. Others argue that Ulster is simply ill-equipped to make tough choices. In recognition of sectarian divisions, the government in Stormont consists of a mandatory five-party coalition (though in reality the Democratic Unionist Party and the nationalist Sinn Fein are the parties that matter). Twelve government departments serve 1.8m residents, whereas Scotland makes do with six departments for a population nearly three times as big. The problems do not just stem from bloated government. Ulster’s citizens are simply not yet used to mature debates over spending, argues Professor Neil Gibson of Ulster University. Newspapers are filled with disputes over flags, marches and history. The region lacks economic think-tanks—unsurprisingly, since economic policy has consisted of maximising the block grant from London and doling it out.

But this is at last beginning to change. A long political dispute—partly over issues of identity and history, partly over welfare reform—had imperilled budget negotiations. Agreement was finally reached in late December (the Treasury eased things along by granting Stormont some financial flexibility). Welfare reform will be implemented this year and the number of departments reduced. On January 19th Simon Hamilton, Ulster’s finance minister, unveiled a budget that aims to reduce public-sector employment by 20,000—although the hope is to achieve this through voluntary redundancies. The OECD, a mostly-rich countries’ club, will report on the efficiency of the public sector later this year.

Reducing Northern Ireland’s dependence on the state is a bigger challenge, admits Mr Hamilton. But the province has some advantages. Ulster’s universities churn out brainy graduates. Labour costs are low, and unlike the rest of Britain the region has a land border with the euro zone. Mr Hamilton and Ms Foster want to harness these strengths to attract more foreign investment. The region has made a start. Multinational services companies such as Baker McKenzie, a law firm, have arrived. Fujitsu, an IT company, is expanding its operation in Derry (Londonderry, unionists call it). Fifty new foreign direct investment projects were secured in 2014.

Stormont argues that it could attract more investment were it not for Britain’s corporation-tax rate, which at 20% is well above the 12.5% levied by Ireland. Ms Foster thinks this is a particular disadvantage when it comes to attracting technology firms, which have been notoriously keen to take advantage of low tax rates in Dublin. As part of the deal reached in December, the power to vary corporation tax will be devolved in 2017.

If Ulster wants to match or undercut the Irish rate, though, it will have to find more cuts elsewhere in its budget. Stormont will lose revenue in the short term and will also have to compensate the Treasury for any decline in the British tax take resulting from firms crossing the Irish Sea. Unions are already denouncing what they fear will be a handout to international fat cats. Others point out that it took decades for Ireland’s low-tax regime, introduced in the 1950s, to draw much investment. But capital is more mobile today, so Ulster may catch the eye of investors more quickly.

Whatever is decided will be the result of the first proper economic policy debate Northern Ireland has seen. Eventually, a bigger private sector might allow the province to sustain Scandinavian-style high public spending funded by other local taxes, even if London begins to withdraw its subsidy. Scotland’s independence referendum has provoked much scrutiny of spending disparities—a hint of what may lie in store for Ulster as the era of spectacular violence lapses into the past.

If it can rise to its short-run challenges, the case for handing more of the levers of economic policy to Stormont is strong. The past decade has shown that Ulster’s economy is structurally quite different from that of the rest of the United Kingdom. And politics cannot mature until Stormont bears more of the costs of its own spending decisions. Mr Gibson likens Ulster to a moody teenager learning to take responsibility for the first time. He hopes that one day an election will be determined by economic policy. When that happens, Ulster will have grown up.