An interesting paper on "the political problem":
Economic Performance and Political Coordination in Portugal’s “Dry” Political System, by Carlos Pereira and Shane Singh:
"(...) we hypothesize that growth-promoting economic policy is more likely to be formulated when veto players have incentives to cooperate and are able to form solid, intertemporal agreements. Cooperative actors can rapidly adjust to changing external and internal factors and therefore formulate well-tailored economic policies. (...) In general, the Portuguese political system does not enhance cooperation among political players because it is “dry.” That is, it lacks tradable currencies capable of compensating coalition players for potential loses, it lacks internal and budgetary coordination capacity of governing, and it lacks a credible enforcement mechanism as a result of a politicized and inefficient judiciary system."
I have a number of quibbles with the paper, but I find the general argument concerning the difficulties in reaching agreements persuasive. Another good reason to read it, at least for me, was to be reminded of another article that focuses on more general aspects of the institutional impediments to growth in Portugal.