External influence on structural reform: Did policy conditionality strengthen reform capacity in Greece?

Abstract

The experience of Greece under the macro-economic adjustment programmes represents an intriguing case of the impact of external conditionality on the process of implementing domestic structural reform. After discussing the concept of reform capacity, the article looks into the specifics of its interaction with policy conditionality, in order to elaborate to what extent external constraint unleashes or hinders reform potential. In doing so, the article shows that it is necessary to take into account the nature of the reform agenda and the impact of strong external leverage on the capacity of the domestic political system to translate requirements into reforms. It concludes that external pressure through policy conditionality has moved things forward. However, its in-built side-effects hardly allowed to change the pattern of political operation, while they inversely affected political and therefore reform sustainability. The wider implications of this case study point to the need for going beyond assumptions regarding reform incentives to look into the reality of domestic reform dynamics.

Exploiting conditionality: EU and international actors and post-NPM reform in Ireland

“…The experience of the Irish administrative system in relation to programme implementation was less conflictual than that of Greece (Spanou 2018) and rather more like that of Portugal. The scale and timetable of the loan programme largely matched the preferred strategy of the dominant political parties and policy community in Ireland (Hardiman 2014).…”

Researching COVID-19: A research agenda for public policy and administration scholars

“…At the policy level, the new architecture of policy conditionality has impacted at multiple levels: fiscal, economic and social policy of Member-States (Crespy and Menz, 2015; Henning, 2017; Verdun and Zeitlin, 2018). The politics and policy of fiscal consolidation have implications on public budgets and, ultimately, its impact in terms of reducing the administrative capacities of the affected countries (Kickert and Ongaro, 2019; Kickert and Randma-Liiv, 2015; Randma-Liiv and Kickert, 2018; Spanou, 2020) and hence, ultimately, possibly their capacity to cope with new and unexpected high-impact crises.…”

Influence of the EU (and the IMF) on domestic cutback management: a nine-country comparative analysis

“…The EU, particularly its informal leader, Germany's Chancellor Merkel, had insisted on the IMF being involved because the Fund had ample experience and standard operating procedures for these crisis situations, whereas the EU did not. Following the usual IMF procedures, the Troika worked out a programme that defined the loan amount, the objectives, and the so-called conditionalities (Featherstone 2011;IMF 2012;Spanou 2017). The loan conditions consisted primarily of the fiscal and financial policies to remediate the deficit and banks, and of so-called structural reforms (see below).…”

“…This is understandable, as the harsh cutbacks and deep economic recession led to high unemployment, poverty, and social inequality. Public protest and social unrest were massive and violent (Spanou 2017). In 2010, there had been no consultation with the opposition.…”

“…In 2016, the new Syriza government held another referendum against the Troika cutbacks, which it won clearly. Nevertheless, the Syriza government was forced back to the negotiation table in Brussels and for further loans had to accept the very same conditions that had been voted down in the referendum (Spanou 2017). Table 4 juxtaposes the situation of protest parties in Hungary and in Greece.…”