Quality of Government, Trust, and the Persistence of Crisis in Greece: Understanding “Greek Exceptionalism”

Drawing primarily on new institutionalist approaches to Europeanization and the institutional theory of trust, this paper attempts to explain the so called "Greek exceptionalism", which is associated with the persistence of the crisis that started in 2009-10, in contrast with what happened in other crisis-hit countries of EU periphery, such as Portugal or Ireland. It argues that the situation in Greece over the last two to three decades, characterized by high levels of corruption and low levels of social and institutional trust, has constituted a vicious cycle that can be conceptualized as a “social trap”. Yet, the paper provides evidence of the Greek paradox, namely that this vicious cycle can be traced back to the post-authoritarianism, and in particular post-EU accession period, the main feature of which, however, has been incremental institutional and policy change. Thus the vicious cycle can itself be considered as a byproduct of inadequacies/failures of Europeanization and/or modernization processes. In accounting for this phenomenon, the paper points to the congruence of cheap credit, as a result of Greece’s accession into the Eurozone, and the long-established weakness of the domestic institutional infrastructure, identified with low level of all aspects of “quality of government”, namely government effectiveness, regulatory quality, political stability, voice and accountability, rule of law and control of corruption. This has had serious implications for people's "normative" and "instrumental" beliefs, both inked to increased influence of rent-seeking interest groups in Greece’s policy-making structure, thus blocking the reform and adaptation processes. This phenomenon, however, is closely linked with the predominance of particularized over generalized/social trust, which constitutes a key feature of Greece’s institutional infrastructure. Thus low quality of government and lack of social and institutional trust are identified as key explanatory variables within the research hypotheses of this paper.