Exadaktylos, Th., Zahariadis, N., (2012), “Policy Implementation and Political Trust: Greece in the Age of Austerity”, Hellenic Observatory Papers on Greece and Southeast Europe, GreeSE Paper No. 65.
Why did the Greek Socialist government consistently fail to faithfully implement the bailout reforms between 2010 and 2011 despite strong international and European pressures? Building on the top-down implementation framework by Mazmanian and Sabatier, we argue political trust underpins the government’s implementation track record. We use a simple game of insecure contracts to find lower levels of trust can exacerbate macroeconomic conditions creating a vicious cycle of non-cooperation and economic recession. Our findings have policy implications on administrative efforts to tackle the sovereign debt problem and offer amendments to theories of implementation and institutional rational choice. Implementation failure and responsibility drift may be explained by the (in) ability to generate long-term political trust in repeated iterations among implementation partners.