Success and Failure of Economic Policies: The Experience of Greece and Portugal

Abstract

This paper evaluates macroeconomic and structural policies in Greece and Portugal over the 1980s and 1990s and analyses the factors that have shaped economic policy making in the two countries. Portugal seems to have been a successful case of economic reform and structural adjustment as reflected in its impressive economic performance. In Greece, stabilization measures and structural adjustment have been delayed as shown by the country's poor economic record in the 1980s and the early 1990s. Policy options seem to have been largely determined by the state of the economy and the flow of financial transfers from the European Union, as well as by local historical legacies, political institutions and the capacity of the state to implement policy measures.