Regional Distribution of Industry and the Role of the State in Greece

Abstract

This paper is an examination of how state policies have influenced the spatial distribution of industry in Greece throughout the period after World War 2. The focus is only on those aspects of state policy that directly influence the spatial distribution of industry, that is regional policy, which was always orientated, in theory at least, towards the vague notion of the ‘more even’ regional development of the country. It is argued that state regional policies were not on the whole successful. The regional incentives system for industry in particular, which was the most important instrument of state regional policy, was quite inadequate, and, moreover, its cost to society increased steadily while its contribution towards a more even spatial distribution of industry was marginal. That is, the incentives system does not seem to have facilitated the regional reorganisation of industry in the sense of diminishing the spatial inequalities in the distribution of industrial activities. It was not ‘accidental’ that the regional incentives system, with its innate weaknesses and increasing cost, survived for so long, despite the fact that it was ineffective. Its survival can be explained in terms of the particular characteristics of Greek society, such as the predominance of the political over the economic sphere and the prevalence of clientelism in politics. In such a context the innate weaknesses of the incentives system allowed certain groups of people to enjoy economic benefits with noneconomic means.