Launched on 21 December 1985 by Desmond O'Malley and other politicians who had split from Fianna Fáil and Fine Gael, the Progressive Democrats took liberal positions on divorce, contraception and other social issues.

The party also supported economic liberalisation, advocating measures such as lower taxation, fiscal conservatism, privatisation and welfare reform.

These successive years as the government's junior coalition partner gave the party an influence on Irish politics and economics disproportionate to its small size.

[10][11] The two Progressive Democrats elected to the 30th Dáil, Harney and Noel Grealish, continued to support the government as independent TDs.

The party was founded in 1985 by Desmond O'Malley, a former senior minister in Fianna Fáil governments under Jack Lynch and Charles Haughey.

At the party's launch in December 1985, O'Malley was joined by Mary Harney, who had lost the Fianna Fáil parliamentary whip, and by former Fine Gael activist Michael McDowell.

In the weeks after its launch, Fianna Fáil TDs Bobby Molloy and Pearse Wyse, and Fine Gael TD Michael Keating also joined the party.

The defectors were dissatisfied with the policies of existing parties, which they viewed as being insufficiently liberal, both economically and on social issues such as divorce and contraception.

Fianna Fáil was however largely supported by Fine Gael where the economy was concerned, and so the Progressive Democrats had difficulty being effective in opposition.

In 1990, a scandal broke surrounding Tánaiste (deputy prime minister) Brian Lenihan Snr's role in pressuring President Patrick Hillery not to allow then-Taoiseach Garret FitzGerald to dissolve the Dáil in 1982.

The Progressive Democrats gave Haughey an ultimatum—unless Lenihan was removed from cabinet, they would pull out of the coalition and support a no-confidence motion in the government.

In total, the Progressive Democrats participated in coalition governments four times, on each occasion with Fianna Fáil (1989–1992; 1997–2002; 2002–2007; 2007–2009), and also with the Green Party from 2007 to 2009.

[17] The following month, Tom Parlon announced that he was also leaving public life and would take up the position of Director General of the Irish Construction Industry Federation.

In March 2009, Noel Grealish became caretaker leader after Cannon's decision to join Fine Gael, and he retained the role for the remaining months of the party's existence.

Dermot McAleese, emeritus professor of economics at Trinity College Dublin, says that the emergence of the Progressive Democrats in 1985 may have had a more positive influence on the economy than some recognise.

[citation needed] Yet Harney was a controversial minister who attempted to extend private influence in the health service and McDowell's campaign in the general election included particularly strong attacks on Irish left-wing parties.

This belief appears to have some basis – as of September 2004 the party controlled two of the most important cabinet positions (Justice and Health), despite having less than one-tenth of the seats of its coalition partner Fianna Fáil.

In a 2000 speech to the American Bar Association, the then party leader Mary Harney appeared to express a desire that Ireland become "closer to Boston than Berlin",[38] adopting US free-market models for economic development, health, education, and other services rather than European Continental models because she believed that while continental countries (such as Germany and France) have more equality, they had bad economies and high unemployment.

In a review of the Department of Finance Robert Wright, a Canadian economist, singled out the policies of the PDs and Fianna Fáil's 2002 election manifestos as contributing significantly to the 2008 property market crash.