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Greece: the Paradox of power

Featherstone, Kevin, Papadimitriou, Dimitris, (2015), “Greece: the Paradox of power”, LSE blog, 31 Ιουλίου.

Why doesn’t Greece reform? Over the past few years the inability of successive Greek governments to deliver on the demands of international creditors has been a key feature of Greece’s bailout drama. Frustrated observers have pointed to various pathologies of the Greek political system to explain this underperformance: the lack of political will; entrenched sectoral interests resisting change; and the irrational allocation of resources skewed by clientelism and corruption. There is, of course, a significant element of truth in all these assertions. Yet, for many outsiders the real elephant in the room remains unnoticed. The endemic weaknesses of the Greek public administration are indeed crucial in understanding much of what has gone wrong over the past 5 years (and before).  Back in 2010 the beleaguered Greek government had very little input into its own ‘rescue’. Lacking basic capabilities and running out of time, it almost entirely ‘sub-contracted’ the design of the bailout programme to the IMF, who, by its own admission, grossly overestimated the capacity of the domestic system to deliver. Unrealistic expectations were built on the assumption that an F1 driver will steer a Ferrari to perfection. In reality, it wasn’t a Ferrari but a rusty Trabant.

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