A key missing element of the ongoing fiscal adjustment and reform program in Greece is the re-engineering of the anachronistic, slow, and unfair legal system. Drawing from a large body of research, I argue that improving the institutional environment protecting investors and speeding the judicial process are necessary conditions for restoring competiveness and growth. Correcting the injustices of the legal environment is also needed to raise opportunities for young entrepreneurs, lower inequality, and restore civic capital. First, I go over international indicators measuring de jure and de facto legal quality so as to put the devastating situation that one observes in Greek courts into a global perspective. Second, I discuss the main channels linking legal institutions to economic efficiency and inequality. Third, drawing on recent policy reforms in other countries, I lay down some proposals to improve the efficiency of the legal system.

This article has been written by Elias Papaioannou. The full article here.

A short version of the article in Kathimerini newspaper here.

By Elias Papaioannou
Source: Greek Economists for Reform.com
Published: March 11th, 2011