Strong Growth and Weak Institutions: The Greek Paradox Re-Considered

Updated as Chapter 5 in 'UNDERSTANDING THE CRISIS IN GREECE: FROM BOOM TO BUST', Michael Mitsopoulos and Theodore Pelagidis, eds., Palgrave Macmillan, 2011

Posted: 21 Nov 2008 Last revised: 23 May 2011

See all articles by Michael S. Mitsopoulos

Michael S. Mitsopoulos

Hellenic Federation of Enterprises

Theodore Pelagidis

University of Piraeus; Brookings Institution

Date Written: November 19, 2008

Abstract

The Greek economy of the 90's poses a unique international paradox. It combines strong economic performance that is rapid GDP growth and strong productivity growth, with a very weak performance on many other fronts that range from poor labor/product market institutions and low competitiveness, to poor environmental protection and high levels of corruption. A detailed presentation of a wide range of available evidence helps to explain initially this paradox. It also helps to describe and reveal the nature of the powerful redistributive, numerous rent-seeking groups that keep markets closed and distorted, resisting reforms in Greece today. This process allows us to obtain also an overview of the problems that reform-minded politicians face in Greece today. It also allows us to attempt the proposal of realistic reform strategies.

Keywords: Greek Economy, Macroeconomic and labor market performance, Institutional rigidities, rent seeking and corruption

JEL Classification: E65, O47

Suggested Citation

Mitsopoulos, Michael S. and Pelagidis, Theodore, Strong Growth and Weak Institutions: The Greek Paradox Re-Considered (November 19, 2008). Updated as Chapter 5 in 'UNDERSTANDING THE CRISIS IN GREECE: FROM BOOM TO BUST', Michael Mitsopoulos and Theodore Pelagidis, eds., Palgrave Macmillan, 2011 , Available at SSRN: https://ssrn.com/abstract=1304152

Michael S. Mitsopoulos (Contact Author)

Hellenic Federation of Enterprises ( email )

Xenofontos str 5
Athens, 10557
Greece
2106722694 (Phone)

Theodore Pelagidis

University of Piraeus ( email )

21 Lambraki street
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Piraeus, Attiki 18533
Greece
+3021 04142526 (Phone)
+3021 4142571 (Fax)

HOME PAGE: http://www.maritime-studies.gr/index.php?option=com_comprofiler&task=userProfile&user=95&Itemid=183

Brookings Institution ( email )

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Washington, DC 20036
United States

HOME PAGE: http://www.brookings.edu/experts/pelagidist

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