Journal of Comparative Economics29,773–775 (2001)doi:10.1006/jcec.2001.1745, available online at http://www.idealibrary.com on

Heather D. Gibson, Ed.,Economic Transformation, Democratization and Integra-tion into the European Union: Southern Europe in Comparative Perspective.New York: Palgrave, 2001. xx+ 360 pp., index, $79.95.

This is not a book to be taken up lightly. Each of the chapters is a detailed andusually dense survey of an important aspect of the Southern European Economies(SEEs) since the democratic consolidations of the 1970’s that replaced previousdictatorships. The authors are based mainly in Greece and Italy, a few from theUnited Kingdom, with none from Portugal or Spain. The essays assemble and as-sess information and judgments from different sources rather than present originalresearch. A central concern of the book is the question whether the SEEs do, infact, form a coherent whole; there is frequent reference to it in the discussions ofthe particular features of the economies. However, the treatment is never rigorousbut consists instead of visual comparisons of levels and ratios of comparative data.There is never a statistical test.

The chapters are generally comprehensive and informative. However, there areseveral complaints that apply to most of them. First, the material is often notup-to-date. This book was published just this year but the terminal date of thedata series is typically 1994, 1995, or 1996. This means that the very substantialgrowth rates and the other changes of the late 1990’s are not taken into account.Second, there is a good deal of repetition. For example, the material in the firstthree chapters often covers the same ground with details that turn up again in laterchapters. Trying to herd the authors of a symposium is like trying to herd cats, sothat one has sympathy for the editor, but the burden of the repetition is shifted tothe reader. Finally the various economic influences are typically sorted out in animpressionistic manner. The many simultaneous, interacting factors operating overtime in all the economies are not easy to disentangle and weigh separately. If anauthor writes that some development has a particular cause, it is natural to ask howthe author is so sure and the answer is not always given. A little economic theoryand casual empiricism may be good enough to resolve some questions but oftenit is not sufficient when many influences are at work. The problem is particularlyacute in the chapters about particular sectors of the economies, which are oftentreated as if they each had a life of their own. Of course, that is not the case.The changing macroeconomic climates that provide the context for the sectoralchanges are neglected, although these are often decisive.

773 0147-5967/01 $35.00C© 2001 Elsevier ScienceAll rights reserved.

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The introductory chapter, “Economic Change in Southern Europe: Prospects forConvergence,” serves as a good survey for anyone wishing to find out about thebook without committing to read the whole thing. The next chapter, “EconomicChange and the Process of Democratization in Southern Europe,” by MassimoRocco and Tommaso Padoa Schioppa is the most ambitious in the book becauseit attempts to relate, as the title indicates, political and economic change. Theeconomic aspects of the transformations are treated more deeply than the politicalchanges. What one misses on the political side is an appreciation of the differencesin the political transformations that took place in each country, which, in turn,created different degrees of disruption in each economy and imposed differentperiods of adjustment. Italy’s political metamorphosis was the end product of aterrible war with accompanying human and physical damage. In Portugal, theevents of 1974 are considered to be a revolution although it was never a lethal one,while in Greece and Spain the process of democratization was a relatively orderlyparliamentary change.

The third chapter, “The Internationalization of Southern European Economies,”by Louka T. Katseli shows the problems of separating the microeconomic influ-ences of changes in domestic cost structures, trade barriers, and exchange ratesfrom macroeconomic forces at home and abroad. In addition, the trade imbalancesin the SEEs, created by the need to accommodate European Union capital inflows,are not distinguished from trade imbalances due to failures in competitiveness andtrade policy, which is admittedly hard to do. The reading of Chapter 5, “LabourMarket Segmentation and Informal Work,” by Enzo Mingione requires an adjust-ment of mindset. It is not really economics but more like sociology, although notcompletely, since it contains suspicions about the social health of market systems.The continuing role of small-scale family farms associated with small-scale artisanand manufacturing firms is emphasized as the basis for explaining the distributionof labor among the various sectors. This is asserted rather than demonstrated. Thechapter shows little recognition of macroeconomic forces and the exposition neverconfronts the major differences among the SEEs in employment rates. Chapter 6,“Industrial Policy for Southern Europe,” by Antigone Lyberaki often repeats ma-terial in previous chapters and much of it seems to be mainly exhortation as to theneed for industrial policy.

Chapter 7 by Vincent Wright and Georage Pagoulatos on privatization is infor-mative about the different policies among the SEEs. Comparisons of the politicalcontexts of privatization policies in the SEEs and the rest of Europe are particularlyenlightening. There are real problems in Chapter 8, “The Changing Role of Financein Southern European Economies: Will There Be An Improvement in EconomicPerformance,” by Heather D. Gibson, Yiannis Stournaras, and Euclid Tsakalotos.In their explanations of the role of the financial sector and how it operates, theauthors rely heavily on the assertion that savings are responsive to interest rates.There is little, if any, empirical evidence to support this and the authors cite onlyold, speculative articles and books. Likewise, the discussion of credit rationing

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is sometimes obscure. On the other hand, the authors do pay close attention tothe sources and consequences of the differences between financial markets andbanks as they evolve over time. These issues are not often taken into account indiscussions of financial development.

Achilleas Mitsos discusses “The Community’s Redistributive and DevelopmentRole and the Southern European Countries” in Chapter 9 and is often critical ofthe badly defined and somewhat inconsistent policies. Yet it would be surprisingif this were otherwise. Individual countries have difficulty in arriving at clear andconsistent aid policies. What else could one expect from a pride of lions? It iswell worth pointing out the inconsistencies, but the Community’s commitment tocohesion is an admirable, though relatively modest, goal. It is also useful to tryto determine the consequences of the different uses of the funds by the separateSEEs. Funds are fungible and it is not clear from the chapter that the differentallocations of Community funds had the intended consequences.

It is easy to be critical of such an ambitious collection but this book wouldcertainly have been improved had it been more current and had the editor beenable to control its repetitiveness. However, the book does contain a great deal ofmaterial and its chapters will serve as individual starting points for understandingwhat has gone on in Southern Europe since the 1970’s. Nonetheless it should beread with caution for the reasons given.

Richard S. EckausMassachusetts Institute of TechnologyCambridge, Massachusetts 02139