17 Crisis, Development, Voice of Good Economists in Greece, Portugal and Spain, and comparison with other OECD countries. Euro-American Association Development Report 2011.

Source: Guisan(2011) based on OECD National Accounts Statistics

Greece: beautiful Egina

The graph shows real value-added per capital in industrial sectors. One of the main causes of economic crisis in Greece, Portugal and Spain is their low level of industrial development in comparison with more advanced OECD countries. Countries with low levels of industrial production per head very often experience twin deficits: 1) unbalanced foreign trade, with more imports than exports, and 2) government deficit because, as a result of the low level of industrialization, income from taxes and other sources is below the amount needed to provide satisfactory levels of public services. The attemps to foster production in building and services without a proper development of industry per capita, like it has happened in Spain and other countries for the period 1995-2007, is usually unsustainable and lead to economic crisis as it has happened in Spain for the period 2008-2010.

There are good economists in those countries but unfortuantely policy makers usually do not listen to their good advice. People do not expend too much, but instead most people in those countries work hard and expend little. It is not fair to throw blame on citizens for the causes of the crisis when the main cause is the lack of good economic policies, at national and European Union level, in order to foster industrial development.

Here we will include references to interesting articles and Websites where good economists give useful advice to improve development and avoid economic crises in those countries.


Recommended readings about crisis and development in Greece:
"Development is the only solution. Seventeen Proposals for a New Development Stategy", Azariadis, C.(Washington Universitry, MO, USA), Ioannides, Y. (Tufts University,MD,USA), Pissarides, A. (LSE, London UK) (2010).
"Is there a strategy that can free Greece from the grip of today´s unprecedental economic and social crisis and place her on a path of sustainable development and solid prosperity? The signers of this article believe that the answer is yes if the country is willing to go beyond the measures of fiscal austerity and market reform advised by the EU-ECB.IMF "troika". We predict that market reforms will not succeed unles they are supplemented by powerful pro-growth policies. The real choice of Greece is not between solvency and default or between reform and stagnation; it is between prosperity and underdevelopment". See full article

Website on Greek Development: http://greekeconomistsforreform.com/

Recommended readings about the positive impact of manufacturing on development, through intersectoral relationships in Europe, America and other areas:

Guisan, M.C.(2006).”Industry, Foreign Trade and Development: Econometric Models of Europe and North America, 1965-2003International Journal of Applied Econometrics and International Development, Vol.3-1. Article free on line: click on "Download"" at: http://ideas.repec.org/a/eaa/ijaeqs/v3y2006i1_1.html

Guisan, M.C.(2007).”Industry, Foreign Trade and Development: Econometric Models of Africa, Asia and Latin America, 1965-2003” International Journal of Applied Econometrics and International Development, Vol.4-1. Article free on line: click on the Abstrac page and then on "Download"" at the Web site of Journal IJAEQS.http://ideas.repec.org/s/eaa/ijaeqs.html

GUISAN, M.C. and AGUAYO, E. (2007). "Production by Sector in The European Union: Analysis of France, Germany, Italy, Spain, Poland nnd The United Kingdom, 2000-2005". Regional and Sectoral Economic Studies, Volume 7-1. On line at: http://ideas.repec.org/a/eaa/eerese/v7y2007i7_3.html

Other interesting articles at our journals AEID and RSES