The crisis in Greece: the semi-rentier state hypothesis

This article offers an alternative explanation of the ‘Greek crisis’ by using the rentier-state theory. Past explanations referred to domestic pitfalls of the Greek economic development or to external constraints such as the incomplete architecture of the Eurozone. Without rejecting these interpretations, we offer a complementary interpretation underlining the facility and large scale with which external funds have flowed into Greece. This pattern was reminiscent of cases of resource-rich countries of the developing world and have created a semi-rentier state. External resources have spread a ‘rentier mentality’ among state actors and a ‘get-rich-quick mentality’ among business entrepreneurs and interest groups. Political decisions were characterised by riskaverse attitudes, while private actors spent their energy in seeking political protection rather than in initiating new enterprises. Three factors that played a significant role in shaping the Greek crisis and continue to plague Greece are foreign loans, EU funds and tax evasion.