Democratic divergence

Democratic divergence

It’s become par for the course: The government continuously pretends it has good reason to toot its own horn while the data, assessments and recommendations would give any other reasonable person pause.

A recent survey by the Organization for Economic Cooperation and Development (OECD) on the Greek economy was no exception. The Paris-based organization indicated that the excessive profit margins that commerce and industry have learned to work with are one of the main driving forces behind inflation. Price competition, it adds, is lacking in key sectors that are dominated by oligopolies, while new players are discouraged from entering. The survey also says that taxes on capital and distributed profits are among the lowest in the OECD and need to be increased, just as taxes on middle incomes need to be reduced. It further noted that large sections of the population are being left behind and not benefiting from the rebound of gross domestic profit. This is not to mention Greece’s poor record in unemployment among women, young people and long-term unemployed or its lagging investments.

Such observations should, in any normal country, serve as a wake-up call. They should be raising the alarm even more so given that Greece’s economic woes run deep and are not restricted to economic reasons alone. To explain:

The course of a society is judged by its ability to create institutions that are strong, safe and able to adapt to a changing world

The course of a society, along with its economic model, is determined by its institutions. It is judged – as Greek economist and Athens Academy member Vasilis Rapanos has demonstrated – by its ability to create institutions that are strong, safe and able to adapt to a changing world; this is, after all, one of the key traits that distinguishes the progressive from the conservative. For Greece to truly turn a corner, it needs to stop being an institutional basket case. It needs to find the strength to rebuild its institutions; not just the state’s legislative bodies but all the formal and informal “rules of the game.” Because, as is so often said, a country’s economic problems are, essentially, political.

Instead of steps to strengthen our institutions through progressive reforms, however, what we have are seeing are steps in the opposite direction. And this is the root cause of our grave concerns about the course of the economy (among others).

Some of these steps back are less severe. For example, the misguided notion that the stability broad popular support gives a government can somehow be replaced by the artificial (and ephemeral) stability provided by a vote-grubbing law and our divergence from the common European practice of coalition governments. Others are simply chilling, like the evident reluctance of law enforcement and judicial authorities to smash the so-called “Greek Mafia,” despite the preponderance of the evidence of its criminal operations. Others still are extremely dangerous, like the Supreme Court prosecutor’s opinion that the Authority for Communication Security and Privacy (ADAE) should not be doing its job as defined by the Constitution.

Constitution law professor and former PASOK minister Evangelos Venizelos said it best when he commented last week that Greece is “diverging from the model of a European democracy.” It is a dramatic warning. Heading into elections with more public money being squandered on handouts is one thing – and a serious one too. If, however, we get to the polls with our democratic institutions – or what has survived of them in the wake of efforts to cover up the wiretapping scandal – in tatters, that is an entirely different matter and will have an entirely different impact. That it will harm the people responsible is the least of it; its impact on democracy is what really matters.

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