The Two Europes

Neither the long- or short-term futures look terribly bright

by FRANCIS FUKUYAMA

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 bookPolitical 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 intoGesellschaft 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 Gemeinschaftwholesale 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.