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The Detrimental Impact of Political Budget Cycles on the Greek Economy

In: The Role of the Public Sector in Building Social and Economic Resilience

Author

Listed:
  • George Petrakos

    (Panteion University of Social and Political Sciences
    Research Institute for Tourism (RIT))

  • Konstantinos Rontos

    (University of the Aegean)

  • Chara Vavoura

    (Panteion University)

  • Ioannis Vavouras

    (Panteion University of Social and Political Sciences)

Abstract

Over the last fifty years, and more specifically during the period 1974–2022 known as the “Third Hellenic Republic,” Greece exhibits the pattern of severe political budget cycles, or electoral fiscal cycles, causing the country’s public debt to soar to unprecedented levels and possibly impeding its economic growth. In this paper, we aim to assess the impact of political budget cycles on the Greek economy. To this end, first, we quantify the effects of electoral cycles on the Greek actual budget balance, to evaluate the significance of political budget cycles on the accumulation of public debt in Greece in the post-1974 period. Secondly, we explore whether general or national elections affect the country’s GDP and estimate the extent to which this effect has played a stabilizing or a destabilizing role in the long-run evolution of the Greek economy.

Suggested Citation

  • George Petrakos & Konstantinos Rontos & Chara Vavoura & Ioannis Vavouras, 2024. "The Detrimental Impact of Political Budget Cycles on the Greek Economy," Springer Books, in: Alina Hyz (ed.), The Role of the Public Sector in Building Social and Economic Resilience, chapter 0, pages 13-31, Springer.
    • Handle: RePEc:spr:sprchp:978-3-031-67702-1_2
    DOI: 10.1007/978-3-031-67702-1_2
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    More about this item

    Keywords

    Political budget cycles; General elections; External balance; Economic growth; Greek economy; Destabilizing effects;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H62 - Public Economics - - National Budget, Deficit, and Debt - - - Deficit; Surplus

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