An academic examination of institutional factors in political economy that have contributed to Greece's poor economic condition
This book is written by academicians in a very academic style (i.e., making extensive use of theory and empirical work in the academic sphere) but can, nevertheless, be understood by layman. The book does not cover macroeconomic factors, such as capital flows, balance of payment problems, foreign exchange fluctuations, etc. that have brought the Greek economy to the horrendous state that it is currently in. Readers interested in such an analysis will be sorely disappointed and should look elsewhere for an analysis. The authors, two academicians, instead focus on institutional factors in the realm of political economy that have brought that nation's economy to its current state.
The authors examine a wide scope of institutional factors ranging from very high level (i.e., the constitutional framework of the nation's legislature) to relatively more mundane and easier to change factors, such as the transparency of the legislature and judiciary. The authors not only examine the institutional factors themselves but also make recommendations as to how these can be reformed to bring about improved performance in terms of economic growth and efficiency.
The authors examine, among other factors, the uni-cameral nature of the country's legislature. This, they claim, provides little in the way of checks of balances on any governing party. Hence the governing party has little to prevent it to from dispensing with excessive political patronage. The authors recommend a bicameral system, like that in the U.S. or Britain, to provide a counter weight to any governing party. Unfortunately, such a reform requires an almost revolutionary change in the parliamentary system and hence is very unlikely. The authors, fortunately, examine other areas where the legislature can be improved in a very feasible and realistic manner. For example, they recommend that the legislature becomes more transparent by issuing minutes of its meetings and conferences.
The authors also examine Greece's judiciary. Here they cite two major problems, lack of transparency as well as tremendous inefficiency and backlog. The first problem stems from the fact that many, if not most, of the judiciary's rulings are not made public, an unbelievable fact in a democratic state. The authors recommend a policy of full disclosure. Another major problem is the inefficiency of the judiciary. The authors show how backlogged and inefficient the judiciary is (cases in the Greek legal system take the longest average of time to resolve in the European Community). The authors recommend reforms such as more resources be devoted to the judiciary but just as importantly, if not more so, legal reform. Greece has a very high per capita level of laws (with many conflicting with each other). The authors recommend a cleaning out of these laws, analogous to how Justinian cleaned out the Byzantine legal code.
The authors examine many other problems with Greece's political institutions and suggest reforms albeit many will be difficult to accomplish in reality due to the interests of strongly entrenched political interests. This makes for very interesting reading and provides a picture as to why, as the author's posit, the root of Greece's real economic problems lie in its poor political infrastructure.
Nevertheless, the authors do miss some points (inexplicably) that are in need of reform. One involves the issue of property rights, along the lines put forth by DeSoto (in his book "The Other Path"). In that book DeSoto stresses the importance of property rights, in particular having a non-corrupt and functioning land registry system. Greece is alone, quite disgracefully, in not having one. The authors also do not discuss the self-evident fact that the civil service needs to be switched from a system based on political patronage and connections as opposed to based on merit (i.e., via examination).
All and all a book that should be read by those interested in developmental economics, political economy and the reasons behind Greece's current economic condition and performance.