The American Interest
Democracy, Development & the Rule of Law
Published on May 8, 2012
The Two Europes

The Greek election on Sunday was a predictable disaster: the two mainstream parties, the socialist PASOK and the center-right New Democracy (ND), were displaced by new extremist parties that appeared on their right and left, including the left-wing Syriza and KKE (Communist) parties which won a quarter of the vote between them, and the right-wing Independent Greeks and Golden Dawn parties getting almost 18 percent.
The main issues in the campaign revolved around whether Greece should fulfill the terms of the pact that had been negotiated with the EU and IMF and continue the austerity that implied. None of the parties, however, was willing to take up what from the beginning was the source of Greece’s problems, and the reason it got into such trouble with its public debt in the first place, which is the country’s pervasive clientelism.
There has been plenty of talk about two Europes, which evolved from being a story about the peripheral PIGS (Portugal, Ireland, Greece, and Spain) to being one about the EU’s north and south, because it was clear that Italy and potentially France also faced large debt and bank problems. This is often portrayed as a contrast between a hard-working, Protestant, disciplined northern Europe (Germany, Holland, and Scandinavia) against a lazy, profligate Catholic-Orthodox south. But the real division is not a cultural one; it is between a clientelistic and non-clientelistic Europe.
Clientelism occurs when political parties use public resources, and particularly government offices, as a means of rewarding political supporters. Politicians provide not programmatic public policies, but individual benefits like a job in the post office, an intervention on behalf of a relative in trouble with the government, or sometimes an outright payment of money or goods.
In my view, clientelism should be distinguished from corruption proper because of the relationship of reciprocity that exists between politicians and voters. There is a real degree of accountability in a clientelistic system: the politician has to give something back to  supporters if he or she is to stay in power, even if that is a purely private benefit. True corruption is more predatory, such as a politician accepting a bribe or kickback that goes directly into a Swiss bank account for the benefit of the politician and his family alone. Giving out public jobs and directing resources to political supporters is legal in many countries, whereas bribery never is. One of the great tragedies of Afghanistan’s long-running civil war is that tribalism (which is inherently clientelistic) has broken down and been replaced by pure predation; returning to clientelism would actually constitute progress there.

An alternative way of understanding clientelism is that it is an early form of democratic mobilization, one that is almost universally practiced in relatively poor countries that hold regular elections. It is pervasive in countries as diverse as India, Mexico, Brazil, Thailand, Kenya, and Nigeria. Clientelism is not the product of a cultural proclivity or a failure of politicians to understand how a modern democratic political system is supposed to operate. Rather, it is often the most efficient way to mobilize relatively poor and uneducated voters and get them into the polling place. Such voters often care less about programmatic policies than an immediate personal benefit like a job or the equivalent of a Thanksgiving turkey.
America’s own history demonstrates this point: when the franchise was expanded in the 1820s and 30s to universal white male suffrage, the political parties responded by mobilizing these new masses of voters clientelistically. Indeed, the US invented both the mass political party and clientelism (or what in American history was known as the patronage system). For a century between the election of Andrew Jackson and the end of the Progressive Era, American politics at federal, state, and local levels was organized around the ability of the two competing parties to hand out government jobs.
Germany, Scandinavia, Britain, and the Netherlands have never been dominated by clientelistic parties, while Italy, Greece, Spain, and Austria have been. As Martin Shefter pointed out in his 1993 book Political Parties and the State, the reason for this difference had to do with the relative timing of the consolidation of a modern Weberian bureaucratic state and the onset of democracy. Those countries like Prussia/Germany, France, Sweden, or Japan which were engaged in extended military competition during their autocratic phases succeeded in creating modern, merit-based bureaucracies. The autonomy of these bureaucracies was supported by an “absolutist coalition” which then protected them against colonization by political parties when the franchise and political competition was opened up. Political parties could distribute resources to interest groups, but not government jobs. This is why all of these countries continue to have relatively high-quality public sectors which, among other things, are better at managing fiscal deficits.
In the United States, Italy, and Greece, by contrast, democracy arrived before the consolidation of a modern state; without a political coalition protecting bureaucratic autonomy, the public sectors of these countries were ripe for poaching by democratic politicians who needed jobs to mobilize mass publics. Greece as part of the Ottoman Empire never developed a strong, Prussian-style state. Democracy came to Greece relatively quickly after liberation from the Turks; universal male suffrage occurred in 1844 (this didn’t happen in Britain until well after the Third Reform Act of 1884), while parliamentarism was introduced in the 1870s. Political parties began to mobilize voters based on kinship and local village networks of patrons and clients. Capitalism was weakly developed there, so existing elites saw the state rather than the private sector as the main source of opportunity and resources. Urbanization in the 20th century did not involve the same transformation of Gemeinschaft into Gesellschaft as in Britain or Germany (that is, the breakdown of traditional kin and village networks and their replacement by a modern division of labor), but rather the transfer of Gemeinschaft wholesale into an urban environment, with the consequent survival of traditional patron-client relationships.
This pattern continued throughout the 20th century, and particularly after Greece’s return to democracy in 1974 after the dictatorship of the colonels. The two mainstream political parties PASOK and ND sought power through the distribution of government jobs to supporters. Greece’s powerful public sector unions succeeded in getting tenure for civil servants. This meant that every rotation from one party to the next did not result in the firing of the other party’s workers, as happened under the American patronage system, but an expansion of overall public employment. Hence the roots of the country’s present crisis in an oversized public sector, and a total failure by any of the existing parties to undertake the type of structural reforms demanded by Brussels and the IMF.
The Italian story is a bit more complicated. Northern Italy was organized around oligarchic and self-governing city states like Venice, Florence, Turin, Bologna, and Genoa, with reasonably good municipal governments. The south however had been part of the Kingdom of the Two Sicilies, ruled for much of the early modern period by the faraway Spanish Habsburgs on the basis of a hierarchical, feudal system of land tenure. The South of Italy had no history of an indigenous strong central government. When Italy was unified in the 1860s it chained together a North that was socially and economically not too different from Austria or southern Germany, to a South that was in effect a less developed country, both economically and socially.
When postwar Italian democracy was born, northern elites faced the question of how to mobilize voters in the South, a region whose poverty meant that support for communism was potentially strong. What the Christian Democrats did was to transform the traditional patron-client relationships into modern clientelistic ones, in which public employment was used as the currency for votes. This system succeeded in stabilizing the country, at the cost of making impossible the formation of a strong, modern Weberian state. Much of the history of contemporary Italy has involved a struggle between a modern north and a clientelistic south. Clientelistic Italy, with the allied phenomena of the Mafia and organized crime, at times threatened to overwhelm the country as a whole. Modern Italy fought back with prosecutions and Tangentopoli, while part of the North under the guidance of Lega Nord threatened to break away from the South altogether. Edward Banfield’s “amoral familism” and Robert Putnam’s low social capital are both ways of describing the dysfunctional social system produced by clientelistic political organization in southern Italy.
In the United States, clientelism was overcome eventually as a result of economic modernization. Industrialization of the country in the late 19th century produced new social groups like businessmen, professionals, and urban reformers who united in a Progressive Movement to push for civil service reform and merit-based bureaucracy. While the struggle to achieve the latter was slow and stretched over the better part of two generations, the US did manage by the middle of the 20th century to eliminate patronage on both federal and municipal levels. (One can argue that it has come back in a modern form of interest groups, but that’s a story for another post.)
In Italy and Greece, however, a modern state has never managed to push aside the clientelistic one. In Italy, as just noted, there has at least been a struggle to see this come about. But in Greece, no progressive coalition ever emerged, despite the obvious disgust of many younger Greeks with the existing system. The imposition of technocratic governments under Mario Monti and Lucas Papademos, respectively, were efforts to force such changes by outside powers. But while the Greek government has been willing to slash certain forms of spending and raise taxes, neither of the traditional parties has been willing to undercut its own political base by attacking clientelism itself. Nor have any of the new extremist parties now represented in the Greek parliament made this a significant part of their programs.
This is why the whole project of deepening Europe into a fiscal union seems to me like such a fairy tale. Outside pressure will never succeed in bringing about change by itself unless it can be allied to internal forces that themselves want reform. In Italy, these forces at least potentially exist, but in Greece they seem altogether absent.
Solving the issue of clientelism would address one of the long-term sources of the current crisis.  But any fix would have an effect only over a prolonged period, and is therefore not terribly relevant to the short-term future of either Greece or the EU.  If the Greek public wants to reject the austerity agreement, which seems pretty clear, the country will be heading for outright default and exit from the euro.  I always believed that exiting the euro was Greece’s only realistic option, and one that could have been done in a reasonably orderly way had it been undertaken some months ago.  Now, it is being pushed as the preference of the extremist parties, and if it happens, will probably occur in a very messy way with bad consequences for the stability of Europe as a whole.  So neither the long- or short-term futures look terribly bright.

  • http://www.zherebilov44.livejournal.com Cennady ZHEREBILOV

    Gennady ZHEREBILOV

    “The Transfiguration of the euro area”
    The basis of the euro zone during the formation of a monetary union of states with different levels of development of their economies, and last but not least – with a different mentality and way of life of citizens, these disparate entities were artificially united the founding fathers of the euro zone on the principle of “Caravan.” But the caravan has an immutable principle: the speed of the caravan must be equal to the speed of the slowest camel!
    In 1924 it was realized a great invention of mankind – the highway. The presence of several bands for a ride in one direction of movement has allowed each participant to achieve the maximum speed available to it without interfering with others. To equalize the rates were established band booster and congresses. Each chose the best for his lane.
    The principle of “highway” is the key to solving many problems of human life. In my mind, it is necessary to urgently at the highest level to discuss the possibility of replacing the model proved so unfit eurozone, built on the principle of “Caravan,” a new model that uses the principle of “highway” and consisting of several European regions (euroterra).
    In order to overcome the crisis of the euro, it is necessary in the euro area, under the control of supranational European institutions to create three European region (three lanes on the highway). For each of these international agreements establish objective criteria for the economies of the countries applying for membership in this zonal area. For example, for a Euroregion (euroterra A) shall remain in force now operating “Maastricht criteria” that establish limits on public debt (60% of GDP) and deficit of budget (3% of GDP). For example, these criteria could correspond to several countries. When you save the desired settings, they remain in that currency euro region that uses the good old euro (let’s call it “hard euro – he»). Failure to comply with the established parameters, any country will automatically switch to another currency Euroregion, its economy with the relevant criteria. For example, the economy of Spain, Italy and other “strong middle peasants” will meet the criteria in the euro region in the (limits of public debt from 60% to 150% of GDP and deficit of budget from 3% to 15% of GDP). They will use a lighter version of the euro – the usual banknote, which will feature a special magnetic strip (or cut the corner – techies prompt options.) Then, like Greece, Portugal and other “temporary lagging” countries will be included in the Euroregion C (limits public debt of more than 150% of GDP and deficit of budget over 15% of GDP). They adopt the euro light (euro light), the same notes, but with two magnetic strips (or two cut corners – if you want). It is obvious that the figures are provisional and are given as an example. Precise criteria should be calculated specialists.

    By the way, there is historical precedent for such a splitting of the currency – the Czechoslovak crown. There are reports that in 1993, Slovakia has not printed a new currency, used in Slovak banks stamped banknotes Czechoslovakia at the start.
    I am sure that my proposed scenario is the optimal solution. It is important that the possibility of transition to a new level in the euro zone was not determined on a group of states, but the criteria and the desire of the state – the applicant. This will remove the tension between the members of the eurozone, reduce unwarranted anti-German sentiment. In addition, member states of the EU will be a stimulus for economic recovery. And if, for example, Poland will make an economic breakthrough and its economy will match the Euroregion A then it just might be on a fast lane with Germany and France.
    george4@bk.ru +7 915 553 40 56 facebook.com/zherebilove

    • Bledy

      Not a bad idea, i like your ‘highway’ solution to this problem but how do you auyomatically switch into another currency. What happens to the savings of the populations in the countries going from the fast lane to the slow lane? Fiat money cannot possibly work with your highway solution.

    • mightymouse

      That sort of large scale, complicated, bureaucratic solution is the sort that has been failing in the first place. it’s the sort of ‘solution’ Europeans cannot identify with and therefore the sort that requires democracy to take the back seat while the elites try and put their theory into place.

      All relations between European nations should exist through mutually agreement by their democratically elected leaders, not tied together into a system where half of the elected representative’s powers are effectively given to un-elected councils.

      The sooner the EU fails, the better. And it will fail as it currently exists.

  • Pingback: Fukuyama: Greek Euro Exit Likely, Consequences Grave | Via Meadia

  • Ed Snyder

    “Clientelism”? How about using “patronage?” You know, a word that says the same thing AND is understood by Americans and others the world over. Instead of, you know, a neologism invented by people who spend all their time in classrooms and have no experience with politics or any other form of messy real life.

    • Jon Leisson

      If you’re unable to understand the distinctions being made, perhaps you should go back to your ‘real life’, and let the grown ups do the thinking.

      I know, right? Those classrooms… with their medicine… and machinery… and systems of societal organization that have resulted in the past sixty years being the most peaceful in human history. Pfft. You should clearly run the world, with your plain talkin’ and clear capacity to process something you’ve just read.

      Also – I cannot believe you are seriously accusing Francis Fukuyama as having no experience with Politics. Buy a Political Science 101 book. Ask a first year pol sci student who Francis Fukuyama is. Ask any member of the current, last, or before-last US administrations who Francis Fukuyama is. Go on. I’ll wait.

    • Jason Keuter

      Patronage is also better because of its negative connotations. Clientism or patronage or whatever you wish to call it is a form of corruption that occurs when government subsumes private institutions and activities. It is, in fact, the norm WITHIN government – the way government bureaucracies operate, the system of rewards and punishments is based on non financial rewards: better working conditions, promotions, immunity from punishment for violating rules, and often, immunity from serious work or responsibility itself. A great many government employees do very little in way of their actual jobs and instead spend the bulk of their time and efforts serving their superiors – essentially, doing the job of their superiors for them and allowing those superiors to take credit if the job goes well and avoid blame if it doesn’t. Since almost all government employees work under job descriptions that are either impossible to fulfill in their totality or are vague and subjective in many of their essential requirements, superiors hold the tacit and very well understood threat of punishment over the head of the cooperating employee. Further, since the employee spends the bulk of their time working to make the superior look good (not, mind you, by doing things that are actually part of their job description), they perform their actual job in a perfunctory manner at best – and therefore live under a constant low-level paranoia, fearing that they could get in trouble; this fear makes them all the more eager to jump at any chance to get on their superiors good side. Most of the benefits from this system actually go to the superior – the nice office and nice furnishings and all other non-financial benefits; the subordinate merely works to keep their fear at bay.

      Other employees seek refuge in unions, or perhaps by forming a relationship with some powerful patron or through some other politically minded actions taken in hopes of discouraging supervisors and superiors from taking adverse action. Meanwhile, as for the actual service these bureaucrats are supposed to performing for the public…well, that’s largely irrelevant. The citizens simply accept being fodder for this system by default; they participation in it as tradition bereft of any purpose or meaning.

      This is of course, a classic backstabbing and petty bureaucratic culture. The point I am making is that it comes with the kind of increased government that Fukuyama thinks conservatives should embrace -albeit in a minimal way and somehow in ultimate service to free-market principles. His invocation of Teddy Roosevelt is especially interesting given Fukuyama’s interest in political evolution; Fukuyama’s basic view is that political evolution is progressive in the sense that it works towards being better – something it achieves through resolution of dialectical contradictions. Another view would be that Roosevelt’s pro-capitalist progressivism was an historically necessary first, incremental step towards greater statism and centralization – both of which spell political decay and devolution towards the kind of oligarchic bureaucratic tyranny and waste described here.

      Fukuyama’s End of History is one of the most misunderstood and really misrepresented books on political evolution, and Fukuyama himself has accepted much of the criticism, despite that criticism reflecting a pretty major misreading of his ideas. He did not argue that liberal democracy and capitalism were the inevitable final state of history; instead, he argued that no further evolution from those systems would take place. In fact, he argued that given the unprecedented challenges posed by the individual freedom and responsibility liberal democracy and laissez-faire capitalism, regression to earlier stages of political development would likely result – a thesis not unlike that of Erich Fromm’s Escape from Freedom. It seems that Fukuyama has taken to romanticizing such earlier forms of government and backtracking from the powerful and very true insights of his masterwork on political philosophy and the evolution of government. The best antidote to Fukuyama’s current misquided views would be Fukuyama’s End of History.

  • thibaud

    Well put. This is a good first step as a corrective to the odd drumbeat from FF’s colleague, Walter Russell Meade, about his misconceived “blue model.”

    However, the reality is that many US states and municipalities today – particularly when it comes to public pension management and regulation of real estate activity – are just as “clientelist” as Greece or Italy.

    Compare the hack-ridden, “pay to play” model of US public pension management with the arms-length, professional, tightly-regulated pension management model you find in Canada or Holland. Most of the “blue” nations (per WRM) have far higher solvency rates than do their American counterparts.

    Or compare the degree of regulation of real estate lending across various US states. It’s the tightly-regulated (since the S&L bust in the 1990s) states that have strong and stable residential real estate markets and the loosely-regulated ones that have suffered huge declines in RE values, property taxes, construction employment etc.

    The issue isn’t the “blue social model” but the quality and extent of honest, competent governance.

    Where most of our pundits go wrong is in failing to see that America today is extremely badly governed. Clientelism is rampant in both parties, as the bipartisan history of “pay to play” at the state and local level shows.

    Our biggest problems are not financial but moral and cultural.

    We need a new political class, one that will man up and put an end to the bread-and-circus copout whereby both parties substitute artificially cheap consumer credit and serial asset bubbles for any serious effort to rein in banksters, get companies hiring, and provide a greater degree of economic security and secure access to health insurance for US families and workers.

    • GC

      You have some great ideas and some awful ones.
      You choose to knock how pensions are managed but ignore how public employee unions/politicians have conspired to rip off the taxpayers by giving outrageous comp packages to public employees in return for election-time support in the form of $$$$ and campaign hours. Are you an unemployed former public employee union member?

      Tightly regulated states vs. loosely regulated? Not sure which states are which in your view, but would you say the blueblueblue CA is tightly regulated?

      Banks need to be regulated much more tightly v.v. leverage and reserves but I doubt that’s what you want. You want more employee diversification at the banks, right?

      Clientism is rampant in both parties. For sure. The GOP still hasn’t the guts to push for a surplus budget.

      Here is where you hit your grand slam: “both parties substitute artificially cheap consumer credit and serial asset bubbles…”
      Excellent! That is the last 40 years of American politics. You hit the nail on the head.

      Unfortunately, you then strike-out (looking while all 3 pitches pass you):
      “…get companies hiring, and provide a greater degree of economic security and secure access to health insurance for US families and workers.”

      So that’s what you want: a Nanny State with the pols making all the decisions.
      No thanks! I’m with WRM.

      • thibaud

        You’re very confused.

        1) “Pay to play” is shorthand for the very process you describe. Both parties play this game.

        2) It was Texas that regulated its lending industry more closely after the S&L fiasco. California, home to Countrywide, did not. This more than any other reason explains why TX’s real estate market is healthy and CA’s is sick.

        3) We have a jobless recovery, and are now looking at the permanent disenfranchisement of literally millions of workers – both skilled and unskilled. And yet there are trillions sitting offshore, parked in debt securities held by foreign subsidiaries of US corporate treasury departments, that could and should be used to invest in the US and hire Americans. We need to get that money back onshore, and it will not happen unless there are sweeping changes to our tax code AND government intervention.

        You do realize, don’t you, that Sweden’s economy has achieved higher growth than ours for FIFTEEN YEARS RUNNING, don’t you? And that Germany and Holland’s unemployment rate is about half ours? And that Canada is kicking our behind on nearly every measure of economic performance?

        Why do you think that is?

        • Bob

          This is good stuff. GC, what do you say to thibaud’s response? And who is going to comment on the military-industrial, Jacksonian (FF’s term), lets go to war clientism of the US federal government?

        • John

          Just one quick note, it would appear you’re quite off on Sweden’s GDP growth:

          http://www.wolframalpha.com/input/?i=sweden+gdp+growth++versus+american+historically

          Haven’t checked precisely, but I hope your two other points fare better, though they both look pretty dubious to me, in the neighborhood of “capitalism has failed–let’s try scientific socialism!” stuff that’s been successful with and for (only) leftist intellectuals (i.e., not for economies so much, unless you cherry pick time and place) for the last 150 years.

          • Don

            Wolfram doesn’t agree with World Bank data,
            World Bank
            S US
            2.48 1.83
            2.34 2.50
            4.23 3.59
            3.16 3.06
            4.30 2.67
            3.31 1.94
            -0.61 -0.02
            -5.17 -3.50
            5.61 3.00
            Havent checked deeply into where Wolfram gets
            its data, but now I know not to trust it.
            http://search.worldbank.org/data?qterm=gdp&language=EN

          • John

            Don, your link didn’t take me to your table, but I think Wolfram Alpha gets data from numerous sources, not just the World Bank (presumably OECD, USG, etc.). GDP figures do vary a bit from source to source. Also, the Wolfram graph was (for better and for worse) spanning almost 50 years–the last “FIFTEEN YEARS RUNNING” part is a bit densely packed.

            BTW, your data also refutes thibaud’s point above, which was my purpose–or at least I think it does: there are no years attached.

          • thibaud

            Nice straw man. There are many varieties of advanced democratic capitalism, and several of these – in Canada, Holland, Sweden and Germany esp. – are showing better growth with lower unemployment, lower fiscal deficits and greater pension solvency than our variety is.

            The reasons for this are more complex than your absurd little dichotomy would comprehend, but they come down to these:

            1. Canada and Sweden, as well as Denmark and Norway, intervened heavily in the 1990s to reform their banking sectors. Despite some point reforms in a few submarkets at the state level – cf Texas’s tight regulations on RE lending after the S&L fiasco – our elites have not done so. Unlike Canada Sweden et al, our economy is saddled with TBTF zombie banks controlling most of the nations’ private assets.

            2. Public administration in the US has far higher levels of “pay to play” corruption than is found in Canada, the nordics, Holland and Germany. Public pensions are but one notorious example among many.

            3. Corporate governance in the US is notoriously weak; corporate governance in Germany et al has been pretty good, resulting in relatively few examples of CEOs looting the firm or piggish unions running their companies into bankruptcy.

            4. Our frugal northern cousins continue to save and to live within their means, while we have pretty much destroyed the frugal yankee ethos.

            The last differentiator IMHO is probably the most important one. US capitalism since the late 1980s has relied on serial asset bubbles, engineered by the Fed and depending for their existence on a deliberate policy of artificially cheap consumer credit.

            Now that we can neither save enough to provide for ourselves in retirement, nor spend enough to get our lopsided, consumer-heavy economy out of recession, we’re in a world of hurt.

            It would behoove us to get out of our cocoon and ask why so many nations that are culturally similar to us are doing so well today, and have been doing well for a long time.

          • thibaud

            John – you’re right: Sweden’s GDP growth lagged America’s … THIRTY TO FORTY YEARS AGO.

            Use this interactive graph, and play around with any period you wish:
            http://www.ekonomifakta.se/en/Facts-and-figures/Economy/Economic-growth/GDP/?from51=1997&to51=2011&columns51=,1,2,3,

            Me, I care about the last 15 years, not the 1970s or the 1980s.

            From 1997-2008, Sweden’s GDP growth consistently matched (early/middle part of the period) or significantly outpaced (latter part of the period) US GDP growth.

            Since the 2008 crisis, Swedish GDP has outpaced ours by a large margin.

            Why do you think that is?

            How can it be that nations which have universal health insurance and high social protection also have low deficits, high growth, and low unemployment?

            Long past time we stopped pretending we have all the answers, and started examining why we’re falling so far behind our northern cousins.

          • John

            thibaud, I think I misunderstood your claim–when you said “FIFTEEN YEARS RUNNING”, I took you to be saying (with extreme emphasis) that Sweden had higher GDP growth for 15 years in a row, not this it was better some years, worse others, but in the end ahead (in GDP growth rate, not GDP) after 15 years. (As when a team is a champion for 15 years running, that is different from saying that they had a better overall record after 15 years.) Perhaps this will surprise you (given [I think] their low levels of unskilled immigration relative to the US, it surprised me a bit), their per capita GDP is even so significantly lower than America’s, as indicated at the site you linked to (http://www.ekonomifakta.se/en/Facts-and-figures/Economy/Economic-growth/GDP-per-capita-/ ). OTOH, you do have Norway being higher than America, suggesting that oil wealth spread over a tiny population is a great way to boost per capita GDP. :)

            Even aside from playing GDP catch-up, Sweden is quite relevantly different from America: very small, ethnically very homogenous (this will change, perhaps radically, in decades to come), building on a cultural and economic foundation of extremely strong capitalist performance pre-socialism–all being important ways to maximize success/minimize failure of a welfare state. It’d be interesting to compare American ethnic Swedes to Swedes per se, economically; I would very much presume that Swedes in America are substantially better off, materially anyway, than Swedes in Sweden–more than Americans v. Swedes generally–but I don’t have real data on that.

            So I think you’re incorrect about the 15 years running, or that Sweden’s ahead of the US in GDP (per capita), but undoubtedly right that we can learn some things from them, and presumably vice versa–but probably only if we also note how very different the countries and societies are and therefore try to compare like to like.

  • Jim.

    So what’s the difference, then, between “clientelism” and the US Democrats’ tendency to hand out lots of money to favored constituencies?

    I mean, aside from the fact that theoretically you can get useful work out of someone who has a Greek government job, while US Entitlement recipients don’t have to contribute anything for the largesse they receive.

    • Bob

      and the Republican handouts to the military and agricultural interests? Entitlements to the ultrarich, who pay a much lower tax rate than measly ole me (and probably than you too, Jim)? Clientism is alive and well on the red side as well as on the blue.

  • trevalyan

    That’s assuming that the EU (Germany) just lets Greece default. I still think that the EU will assume all of Greece’s debt- and its sovereignty- to force the other nations of Europe to accept austerity. Germany is not going to just let its economy flatline- either they show that default has serious consequences, or they can watch their standard of living collapse along with the euro.

  • http://www.polycapitalist.com The PolyCapitalist

    A Greek default does not necessarily mean a Greek exit from the euro. In fact there is no legal means available at present for Germany, etc. to kick Greece out of the common currency.

  • Richard Treitel

    Jim@5, the difference is that an American who votes for a party that wants to cut … well, a party that says it wants to cut Medicare … will still get Medicare benefits.

  • Yannis Frangoulis

    “But in Greece, no progressive coalition ever emerged, despite the obvious disgust of many younger Greeks with the existing system.”

    I’m afraid that my young compatriots aren’t that much disgusted with the existing system. Many even see it as a more just and easier way to a happy life. In May 2010, when the bailout memorandum was signed, there was genuine hope for reform.

    Now however, there is much nationalist anger at the way Greece was treated. And German officials have made the situation worse with their maladroit public statements. Now you might hear young people defend clientelism, even corruption, as more humane than German-inspired “neoliberalism”…

  • Pingback: Fukuyama: Greek Euro Exit Likely, Consequences Grave | BostonCommons.NET

  • az

    Francis Fukuyama wrote: “But the real division is not a cultural one; it is between a clientelistic and non-clientelistic Europe.”

    How should this be understood? Isn’t clientelism very much a cultural phenomenon? Aren’t some societies more suspectible to clientelism than others on a deeper cultural level? Isn’t this partly also a conclusion that can be drawn from the aforementioned research of Edward C. Banfield?
    People differ on the level of their emotional fabrics, e.g. in who and how strongly they include inside their ‘circles of empathy’, in a degree that is reflected in the collective consciousness and larger structures of the society.
    There is more evasion of taxes in certain societies than others, partly, because it is less comtemptible in their general moral outlook. An outlook that is proportionaly more animated by what Banfield termed ‘amoral familism’. And isn’t morality an issue of deeper cultural structures?

    And there are also several other reasons why the disparities between European societies in their political functionality and economic performance have strong roots in cultural differences.
    Strong and innovative markets need a highly supportive educational backbone. Failing educational standards are one of the key deficiencies of Southern Europe. You can’t have a proliferation of successful start-up businesses that a growth economy needs without the required ‘human capital’ of a large mass of qualified, skilled and innovative entrepreneurs.
    The lack of such human capital has contributed to the economic failure of Southern Europe. And more so in the era of globalization when low-skill labour has been out-sourced to Asia.
    Greece cannot get itself out of the downward economic spiral and onto the growth track without the pull of innovative and successful businesses that produce highly qualified products for the foreign markets. They aren’t going to be competitive if their main products are olive oil and tourism. Not in the eurozone anyway. And it isn’t helping that many of their highly skilled workers are now migrating to countries that value their skills more highly and offer economically more supportive surroundings.

    The imbalancies in import and export that are at the structural root of the debt and euro crisis have thus deeper cultural roots.
    How are failing educational standards a cultural issue? The ideals, goals, attitudes and shared identities that animate a nation matter a great deal. You can see this reflected and highlighted in the low educational performances of minority subcultures inside otherwise educationally successful nations.

    Another important trait that derives from the deeper cultural level is that of assuming or reflecting responsibility. Both personal responsibility, and collective responsibility as a society. One of the key messages in the mass protestations at Athens and in the results of the Greek parliamentary has been, and is, “The crisis isn’t our fault, and even if it is, then only for a small part. “They” are to blame.”
    The greedy German bankers “did this to them”. It was “neo-liberalism”. It was the fault of the corrupted politicians.
    For a nation to grow morally it needs to look in the mirror. Too many greeks prefer pointing the finger. They refuse to see the connection with the wide spread tax evasion and gaming of the system their average fellow men committed, the unaffordable benefits and pensions that they rejoiced when they were given, the collective failure as a productive society to compete in the modern innovation-based economy.
    To the contrary, they have protested cutting the benefits.
    And now the Greeks have voted for more of the unaffordable, only some of them knowingly and deliberately for the full insolvency that is certain to follow. And what then? If it is the bankers they are going to blame to the bitter end, then a real socialist government with populist utopian promises could follow. If it is EU that has to take the main responsibility, then far-right will benefit. Neither alternative will be productive to a positive change in the Greek society. The positive change starts with assuming self-responsibility on a larger scale, not by reflecting it.

    With these, to a large extent cultural, disparities the eurozone was a utopian dream to begin with, and will inavoidably break apart.

  • Maria

    “Clientelistic Italy, with the allied phenomena of the Mafia and organized crime, at times threatened to overwhelm the country as a whole.” Exactly: as Mafia and organized crime spend their money on the North, as the North send all the trash in the South. Italy should be threatened as a whole.

    • Ramon Romano

      Non potrei essere più d’accordo Maria. I agree!

  • Pingback: ¿Qué es el clientelismo? | La Voz de Barcelona

  • Pingback: Francis Fukuyama At The American Interest-’The Two Europes’ | Chris Navin

  • Pingback: 42 je odgovor na vprašanje o vesolju, življenju in sploh vsem

  • dgforbes

    Whether the difference between north and south is clientalism or religiously-based culture is semantic.
    The Catholic and Orthodox culture of the south is strongly vertical in terms of patronage and weakly lateral in terms of individual autonomy. The Protestant culture of the north is the other way round.
    Trying to merge the two (think chalk and cheese) beyond the limited aims of the original Six was always a gamble. The project has descended into utopian farce with the expansion into a 27-member EU, all of them yoked to the euro whether they use it or not.
    The cultural difference between the two geographic blocs means that they will never be economically compatible.
    Fiscal union, the proposed solution to the euro crisis, is a non-starter because it is politically unacceptable to northern taxpayers precisely because of the cultural differences with the south.
    It is clear that Greece will be ejected from the euro and probably Portugal. Once the process of disintegration starts, the euro is almost certainly doomed in anything like its present 17-country form.
    One of the basic flaws of European construction is that it has been flagrantly undemocratic, a vertically composed edifice on the Catholic model which happened only because of Germany’s guilt towards France and to a lesser extent Italy.
    Now EU ‘leaders’ are reaping the consequences of their folly as, unfortunately, are the rest of us, their victims.

  • Pingback: “Πελατειακή” Ευρώπη, εναντίον της “μη πελατειακής” | ANTINEWS

  • CobbleHill

    There is a lot here. Let me just throw out a few points, not necessarily in any particular order.

    First, lots of countries have really bad debt to GDP ratios, most notably Japan. I think Fukuyama would include that as a high trust/social capital country vs. say Southern Italy. (He has written about this in the past.)

    Is Scandinavia so great? My wife is Danish. A few points. First Denmark had a huge housing bubble in the 80′s, which then crashed.

    Is their government honest? Yes. She is appalled by her experiences in America.

    On the other hand, their health care system is a monstrous disgrace. We know from personal experience. Also, you can read the Danish tabloids. It’s a steady source of material.

    From what I have read, Sweden tried a huge Keynesian solution to the downturn precipated by OPEC II, and as I understand it ended badly. That may have been the proximate cause of their takeover of the banking system that Paul Krugman so extolled.

    Are these countries richer? My understanding is that the Scandinavian countries were much richer in the 60′s on a relative basis than in recent decades.

    Perhaps a big part of this is that they avoided the depredations of World War II, not honorably in the case of Sweden and Norway.

    In Demmark, lots of work is paid for by barter, as in wine, (thanks be to the EU)rather than checks, so you don’t get hit up by the tax authorities.

    Fukuyama is saying some interesting things. But could do a lot better.

    My view is that that third way looks like a path headed over a cliff. A big reason is the stealth socialism or what we call entitlements in the United States. What do I mean by that? Both health care and social security are private goods. NOT public goods. They are excludable and rivalrous. Social security is an annuity. The private sector has provided those for maybe two centuries. (Fact check.) As with all government (communist) inteventions into the private market place, the result is that you get the prices wrong.

    Here let me distinguish between economic communism (the kind people like and doesn’t work) and political communism (as in the gulag, which is the kind that no one likes but some are willing to excuse.)

    It’s the “entitlements” that are pushing so many developing countries closer to bankruptcy.

    Also, he does not mention the sexual revolution. This is tricky. East Asia stopped having children without the collapse of marriage. Gay rights has also not made much headway there. Both seem a Western speciality. (The latter, btw, is a huge part of the Obama foreign policy.) Why? They didn’t have the pill in Japan. But still, women stopped having children.

    A big part of these insolvency issues has to do with demographics. And that is a mystery that still has not been explained.

  • Pingback: Francis Fukuyama explains why saving the euro is a ‘fairly tale’ « The Enterprise Blog

  • Pingback: Reasoned Indecision

  • http://eu-topia.ro Better Failling

    Clientelism explains only why Greece, and other clientelar states, are less efficient than those who learned how to cope with this phenomenon.
    Now if we want to understand the whole picture we must ask ourselves why so much foreign money got invested in Greece in the first place. OK, I can imagine/accept that at first the investors did not know about what was going on. But after a couple of years even a greenhorn learns the ways of the place in which he conducts his business. So why did they kept pouring money into Greece? Well some because they thought they could use ‘clientelism’ to further their goals, others for plain greed and some because they were blind.
    And what happened when the crisis hit? If Greece was a company it would have been allowed to enter bankruptcy, the negligent shareholders would have written off some losses and the stakeholders could have restructured the whole business, starting from the existing conditions and incorporating the new acquired experience.
    But no, at first the financial community acted lopsidedly. They imposed an austerity plan that hit only half the clientelar system i.e. those who received the pittances: pensioners, students, state employees, etc. Those who had organized the system and had benefited the most i.e. the politicians and the big business, didn’t want to share the burden, at least at first. Nor did those who made possible the whole fiasco, those who provided the money.
    Lately, when it became obvious that Greece could have never payed its whole debt a ‘haircut’ was accepted but it was too little and too late, the beans had already been spilled: too many Greeks had become disappointed enough as to vote for the extremists.

  • Dan O’Brien

    Measuring clientelism is not easy, but a collective effort by a group of European pol scientists (link at the end) found that it is less prevelant in Spain and Portugal than in Germany and Austria.
    Institutions, particularly electoral systems, may have more influence than cultural factors.

    http://www.socialsciences.leiden.edu/politicalscience/research/research-data/party-patronage.html

  • Ramon Romano

    His idea about history of southern Italy is flattened on a vulgar historiography, the industrial and economic progress of the kingdom of two Sicilies had no equal in Italy and in Europe.The reasons for the next social rickets are attributed to British interests and to a human and economic carnage by the Savoy.
    I agree with his idea of clientelism, but it should better investigate the historical origins because otherwise you may not make a correct diagnosis and wrong treatment.

    http://naplespolitics.com/2010/05/19/book-review-%E2%80%9Cterroni-all-that-was-done-to-ensure-that-the-italians-of-the-south-would-become-meridionali-southerners%E2%80%9D-by-pino-aprile/

    Bibliography:

    Harold Acton : I Borboni di Napoli, e Gli ultimi Borboni di Napoli. Giunti Editore

    Pier Giusto Jaeger: Francesco II di Borbone. Oscar Mondadori

    Michele Vocino: Primati del Regno di Napoli. Mele Editore

    Arrigo Petacco: La regina del sud. Oscar Mondadori

    Fulvio Izzo: I lager dei savoia. Controcorrente Editori

  • victoria wilson – mn

    In order to grasp why clientelism in Greece is not functioning to the benefit of the Greek public, one must first ascertain where it plays out in that country’s social structure. The author defines it as a politician’s use of public assets to reward political supporters and organizers. He goes on to state that it differs from corruption as there is an above-board, generally accepted reciprocity where the level of support will affect the level of compensation.

    Furthermore he points to historical examples of the use of this type of trade in the U.S. and elsewhere. Clientelism in this country was used to jump start the political party system after male suffrage. So not only did it have direct implications for the particular politicians and political organizers, but also for our political system at that stage of our country’s development.

    The key seems to be that the U.S. outgrew clientelism, as I assume the American public began to recognize its inefficiencies. Appointing a dynamic and passionate speaker to run the local post office may not be the right fit as he or she may lack the skills for a routine and somewhat mundane position. Once the public calculated the waste of using a public salary for the employ of an incompetent worker, the trade was discontinued and officially disallowed.

    I can only speculate that both the political organizer, benefiting personally, and the politicians, benefitting through the accumulation of power, resisted the demise of clientelism in the United States. It is natural to try to hang onto a good deal. And I can only speculate, as it is not accounted for in this essay, that Greek politicians and their appointed political organizers form a subgroup within the Greek public. This club is clenching tightly and monopolistically to the use of public wages. And the natural process of trading and evaluating this public asset, owned by the entire Greek public, is not settling into an efficient balance.

  • Pingback: For Greece and Germany a democratic trial looms | Mark Mazower | Old News

  • Pingback: A Tale of Two Countries: Northern and Southern Italy « Once You Go Zach…