Contemporary Greece and Europe by Achilleas Mitsos Elias Mossialos

Author:Achilleas Mitsos, Elias Mossialos [Achilleas Mitsos, Elias Mossialos]
Language: eng
Format: epub
Tags: Social Science, General, Sociology
ISBN: 9781351739962
Google: KUujDwAAQBAJ
Publisher: Routledge
Published: 2019-07-17T04:57:39+00:00

Notes

1. The stabilisation programme had been devised by the policy team of Kostas Simitis, then Economy minister. Simitis succeeded Andreas Papandreou as prime minister and chairman of PASOK after Papandreou's death in 1996.

2. These were mainly failed industrial firms which, during the first half of the 1980s, had come under the rather euphemistically named Industrial Reconstruction Organisation (IRO), a state holding company established with the purpose of overhauling these enterprises and returning them to the private sector. By the end of the 1980s, however, almost none of the IRO subsidiaries had been privatised or closed down; instead they were burdening the state budget with large deficits.

3. In a powerful paper Jeffrey Sachs himself (always influential but now a reform moderate and acute critic of 'big bang' adjustment strategies for transition economies) blames Russia's financial breakdown of the early 1990s on the failure of the IMF, the G-7 and other multilateral institutions to provide a financial lifeline of Marshall Plan proportions necessary to bring Russia back on its feet (Sachs, 1994).

4. Probably the strongest argument in support of shock therapy (or the 'big bang' strategy, as it is known) is derived from the rational expectations economic theory: shock therapy exercises a critical impact on market expectations, convincing actors that the government is determined to push ahead with the reforms; on the contrary gradualism, this argument maintains, may be interpreted as a signal of hesitance, thus inducing rent-seeking responses or systematic efforts by status quo interests to resist reform if they considered the government as prone to back out under the weight of sociopolitical opposition. However, there is no compelling evidence that sociopolitical resistance would be less adamant - and for that matter less successful - if market actors perceived the government as committed to a 'big bang' strategy. On the contrary, a shock therapy could promulgate even harsher reaction from the side of status quo interests, leading to a stand-off between government and, say, trade unions. If the government retreated as a result of this standoff (a quite plausible outcome given the political/electoral cost gradualist or radically reforming governments invariably face), then the negative impact on the government's credibility would be more severe if the government had initially appeared as radical and uncompromising than if it had positioned itself as unbelligerent and gradualist.

5. Though the financial and economic collapse in South East Asia cannot be directly attributed to their authoritarian political regimes, the suppression of a dissenting opposition to their economic errors can. Suppression of political dissent in countries like Malaysia, Indonesia, Thailand and South Korea facilitated their adventurist subjection to a combination of ill-founded, doctrinaire economic recipes and crony capitalist management. (On the 1998 Asian crisis see Yotopoulos, 1998, as well as a collection of articles cited in Nouriel Roubini's homepage: www.stern.nyu.edu/~nroubini/asia/). The literature, however, tends to remain rather agnostic on the correlation between authoritarianism and economic growth (see Maravall, 1997: Appendix 2; Bertrand, 1998; also Haggard, 1990: 261 ff).

6. Drawing on other similar examples, the syndrome could be equally

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