ProblemProblem--solving and ideology in public solving and ideology in public

policy instrumentation:policy instrumentation:Sketching an alternative reading of Sketching an alternative reading of ‘‘populismpopulism’’ and and

‘‘modernizationmodernization’’ in Greece in Greece

Professor Kostas A. LavdasProfessor Kostas A. LavdasNational Bank of Greece Senior Research FellowNational Bank of Greece Senior Research Fellow

Hellenic ObservatoryHellenic Observatory

LSELSE

17 March 17 March 20020099

Main Points Main Points �� taking a macroscopic view of policy change in Greecetaking a macroscopic view of policy change in Greece

�� the relative weight of Europeanization and of longerthe relative weight of Europeanization and of longer--

term domestic policy shiftsterm domestic policy shifts

�� ambivalence, ideology and political strategies in the ambivalence, ideology and political strategies in the

domestic utilization of Europeanization effects domestic utilization of Europeanization effects

�� sketching the interaction between policy coalitions and sketching the interaction between policy coalitions and

the choice of policy instruments in an attempt to make the choice of policy instruments in an attempt to make

sense of the roles of problemsense of the roles of problem--solving, ideational and solving, ideational and

ideological elements in policy ideological elements in policy

�� ‘‘populismpopulism’’ and and ‘‘modernizationmodernization’’ as rhetorical constructs as rhetorical constructs

denoting particular types of defection from policy games denoting particular types of defection from policy games

�� Rejection of theRejection of the

Situating the case of Greece Situating the case of Greece �� A Napoleonic model of civil service development (legal A Napoleonic model of civil service development (legal

formalism, centralization, clear publicformalism, centralization, clear public--private divide in theory, private divide in theory,

career civil service), but also career civil service), but also

�� Particularities in staffing (patronage), permeability of state Particularities in staffing (patronage), permeability of state

apparatus, no Hegelian notion of stateness prevailing apparatus, no Hegelian notion of stateness prevailing

�� HyperHyper--political concerns predominating:political concerns predominating:

I. PostI. Post--1949 (from civil war to limited democracy) 1949 (from civil war to limited democracy)

II. PostII. Post--1974 (regime transition and consolidation) 1974 (regime transition and consolidation)

III. PostIII. Post--1981 (first PASOK government) (consolidation of 1981 (first PASOK government) (consolidation of

party dominance, public sector expansion and redistribution)party dominance, public sector expansion and redistribution)

�� statestate’’s presence in the economy strengthened by the s presence in the economy strengthened by the

nationalization programmes which, as in Portugal but on a nationalization programmes which, as in Portugal but on a

smaller scale, followed the regime change in 1974 smaller scale, followed the regime change in 1974

�� Inherited corporatist structures Inherited corporatist structures postpost--19741974, leading to an , leading to an

asymmetric and complex pattern of disjointed corporatism asymmetric and complex pattern of disjointed corporatism

�� In In 19821982--20022002 many countries increased spending levels, many countries increased spending levels,

reaching a peak by 1996. Among these are several of the reaching a peak by 1996. Among these are several of the

previously low spenders, such as Greece, Portugal, Spain. Greecepreviously low spenders, such as Greece, Portugal, Spain. Greece

is often listed among is often listed among ‘‘non reformernon reformer’’ countries because of the countries because of the

level of primary spending (transfers, subsidies, government level of primary spending (transfers, subsidies, government

consumption and investment). The belated and asymmetric consumption and investment). The belated and asymmetric

development of a welfare state accounts to an extent for the development of a welfare state accounts to an extent for the

increase of this type of expenditure during the 1980s and the increase of this type of expenditure during the 1980s and the

early 1990s early 1990s

�� A new A new ‘‘European strategyEuropean strategy’’ from 1996from 1996, focusing on stabilization , focusing on stabilization

and participation in monetary union and participation in monetary union

�� TodayToday’’s Greece: a market economy with the public sector s Greece: a market economy with the public sector

accounting for about 40% of GDP and with per capita GDP at accounting for about 40% of GDP and with per capita GDP at

least 75% of the leading euroleast 75% of the leading euro--zone economies zone economies

�� Prevalence of ideological justification of political and policy Prevalence of ideological justification of political and policy

choice choice

�� By By ‘‘ideologiesideologies’’ I mean sets of beliefs and values that help orient I mean sets of beliefs and values that help orient

and/or provide justification for political and policy action, and/or provide justification for political and policy action,

provided that the prevalence of such beliefs and values is provided that the prevalence of such beliefs and values is

attributed (at least to some degree) to a nonattributed (at least to some degree) to a non--epistemic role that epistemic role that

they serve. More than other beliefthey serve. More than other belief--forming processes, the forming processes, the

ideological ones involve unacknowledged causes and nonideological ones involve unacknowledged causes and non--

epistemic interestsepistemic interests

�� Considerable public debate over the ideological aspects of policConsiderable public debate over the ideological aspects of policy y

objectives AND policy instruments objectives AND policy instruments

Evolution of EU institutions & policy Evolution of EU institutions & policy Facilitating domestic factors Facilitating domestic factors

EU mandating inst. models EU mandating inst. models EU changing opportunity EU changing opportunity

structures structures

Domestic response / Concurrence with EU policy objectives Domestic response / Concurrence with EU policy objectives

OROR

Domestic response / Drifting away from EU policy objectives Domestic response / Drifting away from EU policy objectives

Table 3Table 3. Modes of EU policy impact / policy influence . Modes of EU policy impact / policy influence

�� Significant differences between policy areas Significant differences between policy areas –– the understandable the understandable

fragmentation of policy analysis risks losing sight of the biggefragmentation of policy analysis risks losing sight of the bigger r

questions, such as: questions, such as:

�� Factors responsible for the initiation of waves of crossFactors responsible for the initiation of waves of cross--area area

policy change / conditions determining the capacities of states policy change / conditions determining the capacities of states to to

achieve objectives / the relative weight of domestic and achieve objectives / the relative weight of domestic and

internationalinternational––European stimuli, opportunities, and limits European stimuli, opportunities, and limits

�� Policy instruments (forms of taxing, wage indexing, standards, Policy instruments (forms of taxing, wage indexing, standards,

benchmarking, types of military service, and so on) provide a benchmarking, types of military service, and so on) provide a

crucial level for the analysis of political and policy choice crucial level for the analysis of political and policy choice

�� EU White Paper on GovernanceEU White Paper on Governance (2001): a (na(2001): a (naïïve) view of ve) view of ‘‘new new

instrumentsinstruments’’ leading to greater effectiveness and democratizationleading to greater effectiveness and democratization

�� But the choice of instruments is not part of a rationality of But the choice of instruments is not part of a rationality of

methods without any autonomous significance methods without any autonomous significance

�� In policy literature, In policy literature,

**AA problemproblem--solving approach solving approach refers to the general understanding of refers to the general understanding of

an administration on how to tackle the problems of an administration on how to tackle the problems of

environmental pollution. environmental pollution.

* Policy instruments * Policy instruments are the are the ‘‘techniquestechniques’’ applied to reach a policy applied to reach a policy

goal by inducing certain behaviour in actors. goal by inducing certain behaviour in actors.

�� But public policy is not simply about solving problems with the But public policy is not simply about solving problems with the

help of the appropriate instruments help of the appropriate instruments

�� the limitations of the different versions of latent functionalisthe limitations of the different versions of latent functionalism in m in

policy analysis can be grasped by focusing on policy instrumentspolicy analysis can be grasped by focusing on policy instruments

�� the choice of instruments / the existence of alternatives / factthe choice of instruments / the existence of alternatives / factors ors

influencing choice, avoidance, or routine selection influencing choice, avoidance, or routine selection

�� The proposed typology of instruments (based on the The proposed typology of instruments (based on the

work of McDonnell & Elmore) uses ideal types and its work of McDonnell & Elmore) uses ideal types and its

aim is to call attention to the qualitative difference of aim is to call attention to the qualitative difference of

some tools, such as the some tools, such as the ‘‘systemsystem--changingchanging’’ instrumentsinstruments

�� Instruments are not neutral devices Instruments are not neutral devices –– they reflect they reflect

choice, avoidance, or conditions that lead to routine choice, avoidance, or conditions that lead to routine

selection selection

� Research looking into policy actors’ approach at the

levels of (a) the selection of policy instruments, and (b)

the application of instruments

Policy InstrumentsPolicy Instruments

TYPES OF TYPES OF

INSTRUMENTSINSTRUMENTS::

�� Rules:Rules:

�� Inducements:Inducements:

�� CapacityCapacity--Building:Building:

�� SystemSystem--Changing: Changing:

Main Forms / Main Forms / Anticipated Effects:Anticipated Effects:

�� Laws, Regulations / Laws, Regulations /

Compliance Compliance

�� Aid, procurement /Aid, procurement /

Performance enhancement & Performance enhancement & shortshort--term returnsterm returns

�� Aid, investment /Aid, investment /

Future returns in material or Future returns in material or human capital human capital

�� Authority transfer / Authority transfer /

New institutions, shifts in New institutions, shifts in public policy system public policy system

� Policy instrumentation means the set of problems posed by the

choice and use of instruments (techniques, methods of operation, devices) that allow government policy to be made

material and operational (see Lascoumes & Le Gales)

� Policy actors respond to the content AND the instruments of

policy in forming expectations and managing response

� To examine policy games, we need to focus on situations of

initial cooperation between policy actors – this reflects quite realistically most cases of policy initiation

� I suggest that policy actors’ constructive interaction with

authorities can be captured in a reciprocity-based classification in four strategic contexts

CONTINGENCY-

EquivalenceIMMEDIATE LESS IMMEDIATE

Precise Cell 1

Specific reciprocity:

narrow exchange (perceived

as equivalent in value) in

strict sequence

Cell 2

Mixed:

narrow, longer-term

exchange

Imprecise Cell 4

Mixed:

broad exchange in strict

sequence

Cell 3

Diffuse reciprocity: broad

(perceived as non equivalent

in value) and longer-term

exchange

Table 4. Policy actors’ expectations in four strategic contexts

(adapted from Lepgold and Shambaugh 2002).

�� Cells Cells 11 and and 33 refer to the familiar cases of refer to the familiar cases of ‘‘specificspecific’’ vs. vs. ‘‘diffusediffuse’’ reciprocity: reciprocity:

�� Specific reciprocity occurs when exchanges are seen as Specific reciprocity occurs when exchanges are seen as

comparable in value and occur in strict sequence. In other wordscomparable in value and occur in strict sequence. In other words, ,

in specific reciprocity, both actors in a relationship insist thin specific reciprocity, both actors in a relationship insist that the at the

value of their concessions must be equivalent and that each mustvalue of their concessions must be equivalent and that each must

be made highly conditional on the other. be made highly conditional on the other.

�� The polar opposite pattern (diffuse reciprocity) is one in whichThe polar opposite pattern (diffuse reciprocity) is one in which

the actors consider both the value and timing of individual the actors consider both the value and timing of individual

concessions to be irrelevant. Exchanges in this pattern are not concessions to be irrelevant. Exchanges in this pattern are not

expected to be strictly comparable in value or linked closely inexpected to be strictly comparable in value or linked closely in

time.time. Emphasis on the long-term horizon of cooperation.

�� ‘‘PopulismPopulism’’ has been used in political discourse and also, to an has been used in political discourse and also, to an

extent, in certain political analyses, to denote a particular tyextent, in certain political analyses, to denote a particular type of pe of

defection from situations in Cells 2 to 4. Defection from (or defection from situations in Cells 2 to 4. Defection from (or

termination of) policy games of diffuse or mixed reciprocity hastermination of) policy games of diffuse or mixed reciprocity has

been described as been described as ‘‘populistpopulist’’, when the actors involved have , when the actors involved have

different perceptions about equivalence in exchange. In this typdifferent perceptions about equivalence in exchange. In this type e

of situation, the actor who defines equivalence more precisely iof situation, the actor who defines equivalence more precisely is s

in a stronger bargaining position. This is so because s/he will in a stronger bargaining position. This is so because s/he will be be

satisfied with fewer possible policy concessions from the other satisfied with fewer possible policy concessions from the other

actor than the other actor will be from him/her, and thus likeliactor than the other actor will be from him/her, and thus likelier er

to achieve a good bargain from his point of viewto achieve a good bargain from his point of view

�� ‘‘ModernizationModernization’’ has been used to describe prompts that have has been used to describe prompts that have

been employed in the context of Cell 2 (emphasis on a longbeen employed in the context of Cell 2 (emphasis on a long--term term

horizon) and Cell 3 (emphasis on a general field of discourse / horizon) and Cell 3 (emphasis on a general field of discourse /

‘‘strategystrategy’’))

Turning to cases of policy change in Greece,

� We need to distinguish between

aims of the actors involved and declared objectives

� Aims refer to the strategies and expectations of the main policy

actors involved

� Objectives set in legislation or other official language

� These may constitute two distinct but not incommensurable systems of meaning. Adapting Quine’s theory of meaning, we

argue that

� the meaning of a policy from the perspective of the policy actors

involved, is what each one of them wishes to preserve when s/he decides to ‘translate’ between aims and objectives

A. A. Cases predating the direct effects of Europeanization Cases predating the direct effects of Europeanization

MILITARY

REFORM

POLICY

CHURCH-STATE

RELATIONS

REFORM

(before 1981)

SMOKING

POLICY

Aims relative success relative success failure

Objectives relative success relative success failure

Table 5. Sketch of cases of policy reform with low

politicization

ADMINISTRA-

TIVE

REFORM

(excluding

decentralization)

UNIVERSITY

REFORM

LANGUAGE

POLICY

REFORM

Aims failure failure relative success

Objectives relative success failure relative success

Table 6. Sketch of cases of policy reform exhibiting high

politicization

B.B. Cases with direct Europeanization effectsCases with direct Europeanization effects

CAPITAL

MARKET

LIBERALIZA

TION

COMPETITION

POLICY

MARITIME

POLICY

Aims relative success relative success failure

Objectives success relative success relative success

Table 7. Sketch of cases exhibiting a low degree of

politicization

PENSION

REFORM

TELCOMS INDUSTR

RELAT

OLYMPIC AGRI-

CULTURE

Aims failure relative

success

failure relative

success

failure

Objectives relative

failure

relative

success

relative

success

relative

success

failure

Table 8. Sketch of cases exhibiting a high degree of politicization

Smoking policySmoking policy�� Greece has the highest smoking prevalence not only among Greece has the highest smoking prevalence not only among

members of the EU but also among all members of the OECD members of the EU but also among all members of the OECD

(data from (data from PubMedPubMed and from Greek database and from Greek database IatrotekIatrotek) )

�� Factors: low price of cigarettes, the lack of laws forbidding thFactors: low price of cigarettes, the lack of laws forbidding the e

sale of tobacco products to minors, antisale of tobacco products to minors, anti--tobacco education is not tobacco education is not

incorporated into the school curriculum, school smoking incorporated into the school curriculum, school smoking

prevention legislation does exist, but it is not always enforcedprevention legislation does exist, but it is not always enforced, ,

smoking by students and teachers in school grounds does take smoking by students and teachers in school grounds does take

place (inadequate enforcement of legislation) (Vardavas & place (inadequate enforcement of legislation) (Vardavas &

Kafatos 2006) Kafatos 2006)

�� a tobacco producing country, agricultural produce in certain a tobacco producing country, agricultural produce in certain

areas is largely tobacco, encouraging a proareas is largely tobacco, encouraging a pro--tobacco culture tobacco culture

�� a socially accepted habit, also in the public place a socially accepted habit, also in the public place

�� During 1978During 1978––1981, Greece conducted its only ever nationwide 1981, Greece conducted its only ever nationwide

antianti--smoking campaign n smoking campaign n

�� National ban on tobacco advertising on broadcastingNational ban on tobacco advertising on broadcasting

media enforced in 1979 gave unimpressive results. However,media enforced in 1979 gave unimpressive results. However,

�� when the campaign became aggressive (repeated antiwhen the campaign became aggressive (repeated anti--smoking smoking

messages and circulation of posters), annual increase in messages and circulation of posters), annual increase in

consumption dropped to nearly 0%. When the campaign consumption dropped to nearly 0%. When the campaign

stopped 2 years later consumption returned to prior ratesstopped 2 years later consumption returned to prior rates

�� only recently (August 2005) did Greece comply with the only recently (August 2005) did Greece comply with the

European directive 2003/3/EC on the advertising and European directive 2003/3/EC on the advertising and

sponsorship of tobacco products, forbidding free distribution, sponsorship of tobacco products, forbidding free distribution,

promotion, sponsorship, or advertising promotion, sponsorship, or advertising

�� Greece complied with the EU Directive on Tobacco ProductGreece complied with the EU Directive on Tobacco Product

Regulation (EU Directive 2001/37/EC) (warning labels) Regulation (EU Directive 2001/37/EC) (warning labels)

�� Introducing tobaccoIntroducing tobacco--free zones in public transport, and infree zones in public transport, and in

privateprivate--sector and publicsector and public--sector workplaces, and creating sector workplaces, and creating

smoking cessation clinics have been at the forefront of suggestesmoking cessation clinics have been at the forefront of suggestedd

instruments by experts. Especially in a culture that encourages instruments by experts. Especially in a culture that encourages a a

publicpublic--space function of smoking. However, space function of smoking. However,

�� most ministries seem afraid to face the tobacco companiesmost ministries seem afraid to face the tobacco companies’’

pressure and keep such ideas on the drawing board. Many pressure and keep such ideas on the drawing board. Many

loopholes in laws on tobacco control, e.g., a ban on smoking in loopholes in laws on tobacco control, e.g., a ban on smoking in

the privatethe private--sector workplace, although passed by law, depends sector workplace, although passed by law, depends

on the employer who has the final decision whether or not on the employer who has the final decision whether or not

smoking is to be permitted in the workplace. smoking is to be permitted in the workplace.

�� IN SUM, preIN SUM, pre--EC/EU measures shortEC/EU measures short--lived, abandoned when lived, abandoned when

diversification in tobaccodiversification in tobacco--producing areas did not proceed. producing areas did not proceed.

EC/EU measures compliance, but avoidance EC/EU measures compliance, but avoidance –– to the extent to the extent

possible possible –– of instruments that may curtail smoking. of instruments that may curtail smoking.

Telecommunications Telecommunications

�� SE public telecoms companies: generally successful public SE public telecoms companies: generally successful public

monopolies which, despite a tradition of inwardmonopolies which, despite a tradition of inward--looking looking

development, compared favourably with other small and development, compared favourably with other small and

medium European public operatorsmedium European public operators

�� Telecoms liberalization and privatization have been focal pointsTelecoms liberalization and privatization have been focal points

of the general privatization wave in the 1980sof the general privatization wave in the 1980s

�� The EC/EU level has been crucial in determining the particular The EC/EU level has been crucial in determining the particular

policy responses to international stimuli. After 1984, the policy responses to international stimuli. After 1984, the

influence exercised by external factors (US and international influence exercised by external factors (US and international

pressures for liberalization) as well as technological change anpressures for liberalization) as well as technological change and d

growth in the sector meant that the Commission enjoyed growth in the sector meant that the Commission enjoyed

exceptionally favourable circumstances for action in telecomsexceptionally favourable circumstances for action in telecoms

�� Concern with deficits and public indebtedness led to the Concern with deficits and public indebtedness led to the

underlying shift from privatization as an instrument of underlying shift from privatization as an instrument of

restructuring to privatization as an instrument of European restructuring to privatization as an instrument of European

convergence convergence

�� The ensuing two basic dimensions of SE privatizations (states inThe ensuing two basic dimensions of SE privatizations (states in

fiscal strains struggling to balance the books; EU members fiscal strains struggling to balance the books; EU members

striving to adjust to its development) defined the debate about striving to adjust to its development) defined the debate about

how best to use privatization receipts and also about how best thow best to use privatization receipts and also about how best to o

present the use of receipts. The receipts could be used to reducpresent the use of receipts. The receipts could be used to reduce e

the deficit, or they could be used to invest in infrastructure athe deficit, or they could be used to invest in infrastructure and nd

industry modernization industry modernization

�� Despite the need for investment in modernization, the political Despite the need for investment in modernization, the political

conditioning of the process implied that if privatization receipconditioning of the process implied that if privatization receipts ts

were used directly to reduce the deficit, governments could were used directly to reduce the deficit, governments could

anticipate political benefits resulting from their ability to afanticipate political benefits resulting from their ability to afford ford

tax reductions tax reductions

�� GR: privatization of public enterprises got a difficult start inGR: privatization of public enterprises got a difficult start in the the

late 1980s with government announcements of intention to late 1980s with government announcements of intention to

privatize but without any agreed plan as to the pace or sequenceprivatize but without any agreed plan as to the pace or sequence

of privatization: the instrument of sequential selling (beginninof privatization: the instrument of sequential selling (beginning g

with the most profitable firms and then restructuring the less with the most profitable firms and then restructuring the less

efficient ones which can be sold at a later stage) was initiallyefficient ones which can be sold at a later stage) was initially

considered (because of the immediate need for receipts), set theconsidered (because of the immediate need for receipts), set the

stage for ensuing public debates, but eventually was not followestage for ensuing public debates, but eventually was not followed d

as a clear policy line across the boardas a clear policy line across the board

�� As a result, privatization of major utilities and strategic firmAs a result, privatization of major utilities and strategic firms s

emerged as an issue very early, even if actual privatization plaemerged as an issue very early, even if actual privatization plans ns

remained unclear. A single large privatization in the early 1990remained unclear. A single large privatization in the early 1990s, s,

that of the cement company AGET, one of Europe's biggest that of the cement company AGET, one of Europe's biggest

cement exporting companies, accounted for Dr130bn of the cement exporting companies, accounted for Dr130bn of the

Dr160bn of general privatization receipts by 1992 Dr160bn of general privatization receipts by 1992

�� The Commission promoted liberalization by utilizing the most The Commission promoted liberalization by utilizing the most

powerful provision that was available to it: its right under Artpowerful provision that was available to it: its right under Article icle

90 EC to issue directives by itself in the cases in which membe90 EC to issue directives by itself in the cases in which member r

state governments have endowed enterprises with rights state governments have endowed enterprises with rights

conflicting with Treaty rules conflicting with Treaty rules

�� In terms of regulatory change as a process, Greece shares with In terms of regulatory change as a process, Greece shares with

Italy the experience of a number of protracted, stopItaly the experience of a number of protracted, stop--go go

privatization processesprivatization processes

�� Unfavourable domestic environment: PASOK governments in Unfavourable domestic environment: PASOK governments in

the 1980s pursued expansionary economic policies and the 1980s pursued expansionary economic policies and

redistribution, particularly in the early years, in an approach redistribution, particularly in the early years, in an approach that that

led to increased public indebtedness and further extension of thled to increased public indebtedness and further extension of the e

public sector public sector

�� Despite the fact that groups within PASOK had, by the late Despite the fact that groups within PASOK had, by the late

1980s, acknowledged the need for partial privatizations, it was 1980s, acknowledged the need for partial privatizations, it was

the fall of the PASOK government in the June 1989 elections the fall of the PASOK government in the June 1989 elections

that set in motion privatization processes that set in motion privatization processes

�� In early 1990s, along with Italy and Ireland, Greece has been onIn early 1990s, along with Italy and Ireland, Greece has been one e

of EU member states with the lowest record (below 70%) of of EU member states with the lowest record (below 70%) of

incorporation of directives on telecommunications. Yet there incorporation of directives on telecommunications. Yet there

was no general difficulty with liberalization: for example, in twas no general difficulty with liberalization: for example, in the he

mobile phone market, by 1992 Greece had become among the mobile phone market, by 1992 Greece had become among the

first countries in Europe to have competitive GSM services first countries in Europe to have competitive GSM services

((Wall Street Journal Wall Street Journal , 8, 8--9 Sept 1995). The issue at stake was to 9 Sept 1995). The issue at stake was to

safeguard the state telecoms group and its linkages, against a safeguard the state telecoms group and its linkages, against a

political background which was generally unfavourable to political background which was generally unfavourable to

economic liberalization.economic liberalization.

�� OTE was given a monopoly control of all telecoms services by OTE was given a monopoly control of all telecoms services by

Law 1049/1949. Networks linking politicians, civil servants, Law 1049/1949. Networks linking politicians, civil servants,

trade unionists and telecomstrade unionists and telecoms--related companies. Most of the related companies. Most of the

aforementioned frictions with the EU have involved issues of aforementioned frictions with the EU have involved issues of

public procurement. public procurement.

�� The 1989The 1989--1993 conservative government decided the sale of a 35 1993 conservative government decided the sale of a 35

per cent stake to an international telecoms operator and a stockper cent stake to an international telecoms operator and a stock

market flotation of another 14 per cent. By 1993, OTE was a market flotation of another 14 per cent. By 1993, OTE was a

relatively successful national telecoms monopoly. With prerelatively successful national telecoms monopoly. With pre--tax tax

profits of $551 million in 1993 ($749 million in 1994) and a higprofits of $551 million in 1993 ($749 million in 1994) and a high h

level of domestic coverage (53 lines per 100 people), OTE level of domestic coverage (53 lines per 100 people), OTE

compared favourably to Portugal Telecom, Telecomm Eirann compared favourably to Portugal Telecom, Telecomm Eirann

and even Spainand even Spain’’s Telefonica. As OTE was profits Telefonica. As OTE was profit--making, the making, the

government was hoping for substantial receipts government was hoping for substantial receipts

�� Law 2075/92 limited monopoly and established National Law 2075/92 limited monopoly and established National

Telecoms Commission, which would also be responsible for Telecoms Commission, which would also be responsible for

licensing. International firms were invited to submit expressionlicensing. International firms were invited to submit expressions s

of interest to the Greek Government's financial advisors for theof interest to the Greek Government's financial advisors for the

35 per cent stake along with the company's management, a 35 per cent stake along with the company's management, a

sensitive issue due to procurement practices sensitive issue due to procurement practices

�� The concerns of those who opposed the OTE privatization The concerns of those who opposed the OTE privatization

programme were addressed in autumn 1993 by the new PASOK programme were addressed in autumn 1993 by the new PASOK

government, which aimed to construct a privatization package government, which aimed to construct a privatization package

that would be more acceptable to a number of groups. In an era that would be more acceptable to a number of groups. In an era

of telecoms alliances, the control of the privatized OTE's of telecoms alliances, the control of the privatized OTE's

management was a crucial issue and the PASOK government's management was a crucial issue and the PASOK government's

pledge to keep OTE control pledge to keep OTE control ‘‘in public handsin public hands’’ satisfied both satisfied both

unions and procurement beneficiaries unions and procurement beneficiaries

�� The new government initially suggested that it was considering The new government initially suggested that it was considering

the flotation of a total of 25 per cent, of which 18 per cent tothe flotation of a total of 25 per cent, of which 18 per cent to

foreign operators through a book building procedure and 7 per foreign operators through a book building procedure and 7 per

cent to domestic small investors. The decision on the sale of cent to domestic small investors. The decision on the sale of

35% to an international operator was repealed. Process 35% to an international operator was repealed. Process

suspended in 1994. suspended in 1994.

�� Partial privatization was rePartial privatization was re--started in 1996 (Simitis) and by 2001 started in 1996 (Simitis) and by 2001

it had become the first public enterprise to be controlled by it had become the first public enterprise to be controlled by

private capital. The new (after the 2004 elections) management private capital. The new (after the 2004 elections) management

of the partly privatised telephone company reached an of the partly privatised telephone company reached an

agreement with the labour union, according to which attractive agreement with the labour union, according to which attractive

incentives for voluntary early retirement were to be offered in incentives for voluntary early retirement were to be offered in

view of reducing personnel. In exchange, future recruits would view of reducing personnel. In exchange, future recruits would

not be covered by employment guarantees in terms of length and not be covered by employment guarantees in terms of length and

remuneration. remuneration.

�� As of 2009:As of 2009:

�� Government holds 28% of company stock Government holds 28% of company stock

�� In 2007, In 2007, Marfin Investment Group Marfin Investment Group acquired 20% of OTE, then in acquired 20% of OTE, then in

2008 sold it to 2008 sold it to Deutsche TelecomDeutsche Telecom, which now holds 25% , which now holds 25%

�� OTE major expansion in SE Europe and in CIS OTE major expansion in SE Europe and in CIS

�� In 2006, OTE sold 90% of the Armenian provider In 2006, OTE sold 90% of the Armenian provider ArmenTelArmenTel to to

the Russian company OJSC the Russian company OJSC

�� No official government control over management practices and No official government control over management practices and

procurement, but government still appoints CEO procurement, but government still appoints CEO

�� IN COMPARISON: eventual FULL privatization of Olympic IN COMPARISON: eventual FULL privatization of Olympic

Airlines (to Airlines (to Marfin Investment GroupMarfin Investment Group) in March 2009) in March 2009

�� Success depended on tools & methods used to privatize Success depended on tools & methods used to privatize

Military reformMilitary reform

�� Huntington (1995): reform of civilHuntington (1995): reform of civil--military relations is often military relations is often

successful as it imposes few costs, unlike, e.g., economic reforsuccessful as it imposes few costs, unlike, e.g., economic reform, m,

& produces widespread benefits: cuts in spending, reductions in & produces widespread benefits: cuts in spending, reductions in

service, etc service, etc

�� Greek case postGreek case post--1974: relative success with different tools, 1974: relative success with different tools,

increasedincreased costs, and major sidecosts, and major side--effects effects

�� Facets of reform:Facets of reform:

�� --Conscription length and features,Conscription length and features,

�� --Arms procurement,Arms procurement,

�� --Organization of the military,Organization of the military,

�� --Personnel management changes Personnel management changes

�� Military expenditures approx. 4.5% of GDP in the last 5Military expenditures approx. 4.5% of GDP in the last 5--year year

period, with oscillations period, with oscillations

�� As of 2003, GR has set the military service to 12 months for theAs of 2003, GR has set the military service to 12 months for the

Army, 15 months for the Navy and 14 months for the Air ForceArmy, 15 months for the Navy and 14 months for the Air Force

�� Citing Citing ‘‘Turkish threatTurkish threat’’ and to counter the numerical disadvantage and to counter the numerical disadvantage

(Greece's armed forces(Greece's armed forces number 170,000 while Turkeynumber 170,000 while Turkey’’s 690,000), s 690,000),

the government of Greece embarked on a new tenthe government of Greece embarked on a new ten--year, $17 year, $17

billion modernization programbillion modernization program

�� Biggest spender in NATO (relative to GDP) after the US and Biggest spender in NATO (relative to GDP) after the US and

Turkey / also third or fourth in absolute numbers in specific Turkey / also third or fourth in absolute numbers in specific

areas (submarines, artillery, etc). areas (submarines, artillery, etc). An arms race?An arms race?

�� Statistical analysis confirms that GreeceStatistical analysis confirms that Greece’’s and Turkeys and Turkey’’s military s military

expenditure were expenditure were ‘‘cointegratedcointegrated’’ until 1985 (they tended to move until 1985 (they tended to move

together) but not thereafter. If there was an arms race, it stoptogether) but not thereafter. If there was an arms race, it stopped ped

in 1985. in 1985.

In conclusion,In conclusion,

�� A caseA case--byby--case analysis would point to the crucial roles of case analysis would point to the crucial roles of

interest coalitions and policy instrumentation interest coalitions and policy instrumentation

�� Politicization, as such, does not explain the success or failurePoliticization, as such, does not explain the success or failure of of

attempted policy reformattempted policy reform

�� The extent and form of politicization will depend on the The extent and form of politicization will depend on the

particular profile of interest coalitions involved and the partiparticular profile of interest coalitions involved and the particular cular

type of policy instruments chosen type of policy instruments chosen

�� Certain difficult cases (e.g., Olympic Airways/Airlines) reachedCertain difficult cases (e.g., Olympic Airways/Airlines) reached a a

successful conclusion once (a) the terms became clearer and (b) successful conclusion once (a) the terms became clearer and (b)

legal instruments were used not to guarantee union power but to legal instruments were used not to guarantee union power but to

encourage a fresh start for the new investor encourage a fresh start for the new investor

�� We will be unable to assess the overall picture (We will be unable to assess the overall picture (‘‘limits limits

of Europeanizationof Europeanization’’, etc) unless we look into pre, etc) unless we look into pre--1981 1981

cases (such as military reform) and their implications cases (such as military reform) and their implications

�� Implications of military reform postImplications of military reform post--1974: (a) 1974: (a)

continuous search for cash (hence the initial choice of continuous search for cash (hence the initial choice of

the instrument of sequential selling for privatizations in the instrument of sequential selling for privatizations in

the 1990s), (b) consolidation of policy coalitions the 1990s), (b) consolidation of policy coalitions

involving defence procurement and other interests, involving defence procurement and other interests,

(c) effects on political culture(c) effects on political culture

�� ‘‘PopulismPopulism’’ and and ‘‘modernizationmodernization’’ have been used to have been used to

rationalize policy actorsrationalize policy actors’’ expectations regarding success expectations regarding success

or failure in policy gamesor failure in policy games

�� Lack of congruence between policy actorsLack of congruence between policy actors’’ and the and the

authoritiesauthorities’’ systems of meaning (linked to the systems of meaning (linked to the aimsaims and and

the the declared objectivesdeclared objectives of policies) is associated with of policies) is associated with

blockages in policy reform blockages in policy reform

�� Political culture needs to be brought back into the Political culture needs to be brought back into the

mainstream of Europeanization studiesmainstream of Europeanization studies

�� The The meaning of a particular policy from the perspective

of the policy actors involved (i.e., the elements that

each one of them wishes to preserve when ‘translating’

between aims and objectives) is crucially influenced by

policy instrumentation

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