Monday 17 January 2011

No political problem?

Pedro Lains said here that Portugal does not have a "political problem", but rather an economic one. I must disagree. The quickest way to express my disagreement is to say that there is a certain way of doing things in Portugal, a certain way of dealing with public funds, a certain way of coupling (nominally) private companies, political parties and public rents; in a word, there is a certain way - let's call it our regime - of creating economic problems where there were none. This is surely political and it sure has economic consequences (deficient allocation of economic resources, for starters). It also generates pernicious moral consequences, which in turn will again create more economic problems. But that is another matter.

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