The ongoing European debt crisis has singled out the peripheral
economies of the European South by shedding light on their latent pathologies
and malfunctions. Often viewed as an epitome of a ‘Mediterranean’ model of
political and economic organization, Greece gave utmost expression to those
ills pertaining to a weak and inefficient social contract. The Greek post-dictatorial
political economic system has been marked by an explosive mix of statism, welfarism,
and popular distrust of public institutions that eventually gave way to a
downward spiral of state degradation and social degeneration. The country has
thus been trapped in a self-enforcing vicious cycle of low state (fiscal and
legal) capacity, high policy implementation costs, and depreciating social
capital.
