CORRUPTION, INEQUALITY AND TRUST: the Greek vicious circle from incremental adjustment to "critical juncture"?

Abstract

Drawing primarily on new institutionalist approaches to Europeanization and the institutional theory of trust, and based on critical evaluation of the post-authoritarian period in terms of institutional and policy evolution, this paper argues that the situation in Greece over the last decade or so characterized by relatively high levels of corruption and inequality and low levels of social and institutional trust has constituted a vicious circle that can be conceptualized as a “multiple/institutional equilibrium”. In this respect, the current period of institutional and policy change should be viewed as a “critical juncture”, actually a consequence of the external shock facing the country, marked by the serious economic and political crises over the last two to three years. Yet, given that corruption, inequality and lack of trust are characterized as rather “sticky” phenomena, the paper, differentiating - up to a point - from other theories of transition/change, such as cultural, modernization and/or late industrialization theories, provides evidence of the Greek paradox, namely that this vicious circle is a relatively recent phenomenon that 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. In other words, the vicious circle can itself be considered as a side-effect or byproduct of inadequacies/failures of the adjustment and/or modernization processes themselves. In accounting for this phenomenon, the paper points to the congruence of cheap credit, on the one hand, as a result of Greece’s accession into the Eurozone, and the long-established weakness of the domestic institutional infrastructure, on the other, identified primarily with political clientelism and/or low “quality of government”. A key feature of this weakness has been the predominant role of rent-seeking interest groups in Greece’s policy-making structure at the expense of (civil) society. This phenomenon, however, is closely linked to the predominance of particularized (“amoral familism”-like) over generalized/social trust, which constitutes a key feature of Greece’s institutional infrastructure. Thus the lack of social trust is identified as a key intervening/ explanatory variable within the research hypotheses of this paper.