On the 1974 Transition of Greece to Democracy: A Non-Conventional Assessment

Abstract

Since transitioning to democracy in 1974, Greece has enjoyed political stability. However, this stability has been accompanied by a significant slowdown in economic growth. Specifically, the average annual growth rate from 1974 to 2022 has dropped to approximately 1%, down from around 7% in the preceding 20 years. Existing literature suggests we would expect economic growth to accelerate, particularly in the years following Greece's integration into the European Union in 1981. It did not occur, raising the ques-tion: why not? This essay offers the explanation that political stability in Greece has resulted from a redis-tribution mechanism of income and wealth, which was embedded in the 1975 Constitution. This mecha-nism established a broad range of new 'social' rights while further constraining property rights. By ad-dressing these social rights through the public budget and imposing ad hoc burdens on the private econo-my, this mechanism enhanced political stability. However, in an open market economy like Greece's, this approach has proven counterproductive, leading to stagnation of economic growth and increasing the like-lihood that political stability could be disrupted. To safeguard against the risks to democracy and even national sovereignty that this outlook presents, it is crucial to eliminate the aforementioned redistribution mechanism from the constitution. An even better solution would be to adopt the new constitution recently proposed by six eminent Greeks.