Abstract
The seventh chapter describes the concept of economic institutions and the forms they assume in the Greek economy, based on their main features: property rights, the operational quality of markets and the organization of contracts. These features are incorporated in the tax and insurance systems. We discuss the nature of transaction costs and property rights and their influence on the entire economy, the issue of oligopolies and the process of foreign direct investment. We also analyse the financial system and its transactions and, finally, the tax and insurance systems in Greece.
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Notes
- 1.
Includes the following types of transactions: (a) black market transactions, (b) agreements, exchanges without direct financial return, and (c) opportunity costs for allocating resources.
- 2.
Since 2003, the World Bank has been preparing a research project to measure the impact of the institutional environment on business. The methodology adopted concerns quantitative indicators that illustrate the relationship between businesses and government bureaucracy. It does not thus record the personal evaluations of respondents, as in the case of the World Economic Forum. Overall, it uses 43 indicators, which are divided into 10 topics: (1) Establishment of the company, (2) Dealing with licenses, (3) Employment of staff, (4) Registration of property, (5) Reception of credit, (6) Investor protection, (7) Payment of taxes, (8) Cross-border trade, (9) Imposition of contracts and (10) Business closure. For the limitations and weaknesses of the methodology adopted in the “Doing Business” surveys, see National Competitiveness and Development Council, Annual Competitiveness Report, 2007, pp 113–114.
- 3.
Labelle, Kathimerini (13/1/2008).
- 4.
EIU 2008, IMD 2008, IMD 2007, MIG 2007, WEF 2007, GI 2008.
- 5.
Source: http://www.transparency.gr/Content.aspx?page=43 (2006, 2007, 2008).
- 6.
Enet (24.09.2008).
- 7.
- 8.
Meleti and Xanthopoulou (Monthly Review 26/8/2010).
- 9.
Concentration ratio: It measures the degree of concentration of a market. The number 4 refers to the 4 largest firms in the industry.
- 10.
IMF (2006) World Economic Outlook, Financial Systems and Economic Cycles.
- 11.
The ban on investment activity had been imposed by the legislation of the democrats Glass and Steagall (Glass-Steagall Act, 1933) as a result of the crisis of 1929 in an effort to protect depositors from the speculation of banking administrations and the corresponding market risk. The decisive lifting of the ban took place in 1999 with the voting for the bill of the Republicans Gramm, Leach and Bliley (Financial Services Modernization Act).
- 12.
IOBE (2008) Entrepreneurship in Greece 2007–2008, Athens, November.
- 13.
Here, we use the term “redistribution” to mean the transfer of resources between individuals of the same generation.
- 14.
The average tax rate is defined as the total tax burden to the total household income. In a progressive tax system, the average tax rate increases with personal/household income.
- 15.
A typical example is the difference between the Anglo-Saxon world and continental Europe. In the first case, the role of government in social security is significantly smaller than in the second, where people expect the “social contract” of the state to guarantee the smooth functioning of the social security scheme.
- 16.
Significant contributions to the insurance scheme were made under the Economic Reconstruction Program in 2010, whose effect is examined in Chap. 11 of this book.
- 17.
It is difficult to convey the exact number of pensioners as many pensioners receive pension benefits from more than one fund. It is clearly easier to assess the ratio of pensions to employees.
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Petrakis, P. (2012). Idiosyncratic Economic Institutions. In: The Greek Economy and the Crisis. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-21175-1_7
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