Between Domestic Learning and External Coercion: Budgeting and Fiscal Management Reform in Greece

Abstract

ABSTRACT The article examines the interplay between external pressure and domestic learning through a case-study of Greek budgetary and fiscal management reform. Pre-crisis, budgetary management inadequacies were not efficiently addressed, mainly due to lack of awareness of problems, a low uncertainty environment and a strong political propensity to maintain discretionary use of financial resources. In contrast, crisis-era bailout conditionality represented a drastic change in the environment, increasing uncertainty and encouraging domestic openness to reform. The fiscal governance framework was significantly transformed, to a point of paradigm change. While there is no doubt regarding the impact of external pressure, the analysis highlights certain aspects that point to a domestic learning process, though variable in different parts of the political-administrative system.