This “post”:http://www.economist.com/blogs/charlemagne/2010/03/empathy_short_supply on the background to Greece’s economic problems from the Economist‘s Charlemagne is both very interesting and surprisingly non-Economisty.
The Greek civil war, and the bloody score-settling that followed, is a living memory for many Greeks. Any consideration of Greek nepotism or clientelism needs to be seen in that light. So for example, it is not enough to say that Greek civil servants enjoy jobs for life, and that is a big problem. (Though it is a big problem, not least because many Greek civil servants are paid pitiful wages—partly because there are so many of them. That means they will resist austerity measures all the harder, because they feel like victims in this crisis, not fat cats.) But the bloated public sector is also a function of history. Here again, is a commentary from Kathimerini:
The vast majority of Greek civil servants and others working in public enterprises are guaranteed lifetime employment. This practice arose from the country’s recent past, when any new government coming to power would fire the employees hired by its predecessor and replace them with its own supporters. Unfortunately, immunity from dismissal has been abused and simply offers hundreds of thousands of employees shelter from changing economic conditions
… Newspapers here in Belgium talk all the time about the government needing to “buy social peace” by paying off some interest group or other. In Belgium, the alternative to “paix sociale” is a strike. In Greece, plenty of grown-ups remember when the alternative to social peace was their neighbour, or their loved-one, vanishing in the night into a jail cell or worse. The current clientelist truce between right and left is the price (albeit a horrible, wasteful price) established for the current version of social peace enjoyed in Greece.
I am not an expert on Greek politics, but this strikes me as a highly plausible explanation, and one that is very clearly compatible with the emphasis that Adam Przeworski and others lay on credible commitment problems in new democracies. One of the most urgent tasks for those who would like to build a sustainable democracy is to ensure that credible commitment problems are solved – most basically, that (a) power will alternate according to election results, and (b) that disgruntled losers won’t take to the hills with their Armalites. Laying the foundations for these credible commitments is not always a politically pretty process, and leads to various inefficiencies (see also the Austrian _Proporz_ system. But – as Charlemagne notes – it surely beats the alternative.