To summarize, given that Greece has chosen to use a non-market economic model, its done amazingly well. It’s done something no other sizable non-market economy has done–achieved developed country status without vast oil wealth. This may partly reflect its long-time inclusion in the EU, partly the fact that it is both small in population and has highly desirable tourist attractions, and partly the entrepreneurial skill of its citizens. But for whatever reason it is vastly outperforming expectations. Greece is doing shockingly well, given its economic model.
Read the entire post, which is interesting. However, my guess is that the Heritage economic freedom index makes Greece seem worse than it really is. However, the Fraser economic freedom index also makes Greece look bad.
But I am going to guess that it is much easier for an international company to do business in Greece than in other countries with low indices of economic freedom. And if that is true, there is probably more competitive life in the Greek economy than there is in those other countries.
The question was how well (or poorly) they were doing relative to their freedom index before joining the Euro in 2001 and gaining access to all that new sweet credit that they’ll never pay back? It’s easy to punch above your weight on someone else’s dime, while you can.
I’m guessing we haven’t nearly seen the end of Greece’s correction, either financially downward, or (quasi-coerced) neoliberal reforms upward. When the obscure bailouts are finished and reforms are implemented and Greece eventually settles into its new equilibrium, I think it will prove much less of an outlier.