HISTORICAL DICTIONARIES OF EUROPE Jon Woronoff, Series ...

xliv • INTRODUCTION
As in most modernizing societies, Greece exhibits a pronounced
dualism between an innovative, progressive, and self-confident core
and a traditional, conservative, and defensive periphery. Thus, change
is haphazard and asymmetrical. Greece continues to suffer from an
oversized, inefficient, and corrupt state bureaucracy that overtaxes and
overregulates the productive capacity of the nation. Education at all
levels, but especially tertiary, is in crisis. The social security system is
bankrupt. Public policy in almost every field remains hostage to special
interests that use their privileged access to power to parasitize on state
resources.
Three challenges are particularly acute. The first is that Greece is aging
rapidly, despite the influx of immigrants, due to low fertility rates
since 1980. With 1.3 children per fertile woman, Greece has one of the
lowest reproductive rates in the world. As a result, the population of
Greece might decline to fewer than 9 million by 2050 while the percentage
of people over 60, which has already doubled in the past 40 years,
will double again in the next 40.
The second challenge is the extent of its corruption. There is usually
a correlation between poverty and corruption. Greece is an exception;
although rich, it suffers from widespread corruption usually associated
with the Third World. Corruption permeates the entire state structure,
including the judiciary, police, church, and tax and urban planning
authorities. Corruption wastes precious resources, dampens economic
growth, rescinds public policy, reinforces inequality, and makes Greece
unattractive to investment. It is no coincidence that Greece has failed
to draw substantial greenfield foreign investment (that is, investment
in new assets). Nor is it a coincidence that the serious Greek money is
made in shipping, where the corrupt Greek state is mostly absent and
where Greek entrepreneurship is allowed to flourish unhindered. Carrying
out or creating a business in Greece means having to work through
a labyrinth of laws and state agencies that are often more determined to
satisfy their own self-interests rather than the good of the public.
The third challenge is that Greece’s natural environment is under
threat. The crystal waters, the unspoiled coastline, the pristine mountains,
and the extraordinary biodiversity of the land are Greece’s most
precious resource and the country’s unique comparative advantage in
an increasingly competitive world economy. The density of Greek cities
has saved the country from the suburban sprawl that has afflicted most
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