The Greek Paradox: Promise vs. Performance (review)

This book contains papers that were presented at a symposium in October 1995 at Harvard University’s John F. Kennedy School of Government. The symposium began with the premise that Greece is suffering from a substantial gap between promise and performance—what it could have achieved and what it has actually achieved. This gap can be observed in politics, economics, and foreign policy. According to the editors, “the birthplace of democracy finds itself with a government that is often paralyzed.” Although “individual Greeks push the frontiers of the global economy in entrepreneurship, finance, shipping, and business, Greece lags behind other member countries in the European Union,” and while Greece “should serve as a natural hub of the Balkans and a pillar of stability in a volatile region, it repeatedly falls victim to insecurities that prevent realization of its potentialities” (xvii). The gap between promise and performance is, according to the editors, surprising enough to be called a paradox.

The book consists of three sections. The first contains four papers commissioned for the symposium. P. Nikiforos Diamandouros focuses on domestic politics, Stavros B. Thomadakis on economics, and Monteagle Stearns and Misha Glenny on foreign policy. One should include in this section the volume’s introduction by Kalypso Nikolaïdis and its conclusion by Loukas Tsoukalis. The second section consists of short commentaries that address issues raised in the first section. Finally, the third section contains three pieces by “policy-makers”: an address by the president of Greece, K. Stephanopoulos, delivered at the Kennedy school in 1995, a short commentary on foreign policy issues by former Assistant Secretary of Defense for International Security Affairs Joseph S. Nye, Jr., and an autobiographical piece by former governor of Massachusetts and Democratic presidential candidate Michael S. Dukakis.

Although the authors offer a number of reasons for the advent of the “Greek paradox,” including the country’s geographic location and size, their central argument is based on the cost of democratic consolidation. The demo-cratic regime that emerged in Greece in 1974 had to integrate “large social strata previously excluded and/or marginalized by the anticommunist state in postwar years” (28). This, however, implied policies such as income redistribution that were implemented through public sector expansion and clientelism and that eventually undermined the country’s economy and reinforced its “chronic backwardness.” According to Tsoukalis (164), “economic adjustment and international competitiveness were sacrificed for many years on the altar of democratic consolidation.”

Diagnosis is promptly followed by prescription. The book takes a strong stand in favor of the immediate and uncompromising implementation of structural reforms: deregulation, liberalization, and privatization; tax and social security reform; and administrative reform of the public sector, including the reduction of the number of public sector employees. Such recommendations are, of course, hardly original; they are no different from the package of liberal economic reforms implemented in various versions and under different names throughout the world.

Those familiar with this debate will probably recall that a major issue among the advocates of the “reformist agenda” concerned its implementation—how to enact such a radical reform program given its staggering political and social cost? Until very recently, obstacles to reform appeared insurmountable: vested interests among large segments of the population; militant public sector unions; clientelistic parties sensitive to any form of political cost; a dominant left-of-center party with a strong base among public sector employees and an aversion to liberal economics (PASOK); and the very structure of Greek society, where family-owned small firms, self-employment, and state protection prevail. However, recent political developments indicate the sudden demise of these obstacles, a change that could be attributed to (a) growing pressure from the European Union (particularly in the context of monetary union), (b) the plight of the Greek economy, and (c) global ideological trends. It is particularly ironic to see these reforms implemented by PASOK.

The diagnosis is plausible and the prescription adequate. However, the...