Vikings in Greece: Kleptocratic Interest Groups in a Closed, Rent -Seeking Economy

Abstract

Last December, downtown Athens experienced three nights of street battles, arson, and looting that became headlines in the international press. We argue that the reasons for this extreme social turbulence are related to the regulatory and institutional rigidities that still prevail in Greece’s economy, despite the strong growth that it enjoyed until recently. Furthermore, we describe the pattern of state intervention, institutional sclerosis, and high administrative costs that secure and allocate “rents” to interest groups that obstruct all efforts to reduce these rents and to open up the economy.