Broken Promises in Greece: Institutional Design and Economic Outcomes of Troikonomics

The persistence of structural imbalances despite years of fiscal consolidation necessitates a fundamental re-examination of the theoretical foundations upon which the dominant analysis of the Greek Financial Crisis rests. It is imperative for a more thorough and systematic reassessment of the conceptual tools and analytical premises that have guided research thus far. Worldwide, there is no real room for culturally different economic policies beyond the monocultural neoclassical framework underlying the Washington Consensus and the imposed austerity of Troikonomics. A political economy approach in harmony with history and economic pluralism is a capable medium to grasp the evolutionary nature of the Greek economy susceptible to crisis. Troikonomics views Troika's collective decision-making as a distinct economic phenomenon. The idea is novel because it depicts a situation that has never been seen in history: these three institutions have never functioned as a single decision-making body with such broad sovereign oversight authority. By systematically examining what each member of the Troika brings to the table and contributes to the collective decision-making apparatus, we can develop a comprehensive understanding of how joint policy decisions were formulated, negotiated, and ultimately imposed upon Greece, the crisis-affected EU member. The paper concludes by drawing lessons applicable to crisis-afflicted economies.