Rules, institutions, and Douglass C. North's institutionalism: Understanding Greece's economic performance

The Greek Crisis has preoccupied many economists and thinkers around the world since its break out in 2008. A lot of ink has been consumed on its possible causes; however, everyone makes use of the basic, classic, economic model and its assumptions. In this thesis we are looking at the crisis from a completely different perspective. Drawing on the Nobel Prize Award winning work of Douglas North on Institutional Economics, we explore the deeper reasons responsible for the current economic crisis in Greece. Institutions dictate the behaviour of societies and define their choices; they are, thus, the key to their own success or decay in the arrow of history. Their existence lies in the very psyche of humans, and their endurance through time is their main trait. In this work we make out the three basic Institutions held responsible for the Greek crisis: small property, the Greek notion of exceptionalism and the dogma of the Greek Orthodox Church. We also examine the way they affect the trajectory of the economy in the course of time. This research indicates that there is a lot more than just mere graphs and numbers. A whole world of human behaviour and institutions lies in the background. Expectation of any change of society's trajectory must have reforms in institutions at its core. It is under this framework we propose an institutional revolution that will target the institutional producers of society in a way that will initiate the sprouting of new sets of institutions, which will enhance economic progress. It also regards the conclusions of the thesis; that understanding economies requires a better understanding of how the brain works - something completely removed from the classic paradigm in economics.