Greece as a Precautionary Tale of the Welfare State

Few contemporary democracies offer tales of institutional failure as startling as that of Greece. Despite a turbulent political history in the twentieth century, the Greek economy gained ground during decades of actual wealth creation, until the country’s main parties started to compete on the basis of welfare statism, based on populism and patronage. Modern Greece has become a symbol of economic and political bankruptcy, a natural experiment in institutional failure. It’s not easy for a single country to serve as a textbook example of so many institutional deficiencies, rigidities, and distortions, yet the Greek government has managed it. The case of Greece is a precautionary tale for all others. Law and economics scholar Aristides Hatzis shows how short-term pursuit of political advantage through statist policies generated corruption, indebtedness, and political collapse