The “Trilemma” of Public Bodies: Bureaucratic Structures Versus Agencies Under Policy Conditionality

Abstract

The aim of this article is to explore the implications of the delegation of powers from central bureaucracies to semi-autonomous agencies for public administration under policy conditionality. Focusing on Greece, we argue that agencification reforms that were introduced during the economic adjustment programs (2010–2018) have changed the role of the administrative apparatus in policy-making and implementation. Based on two exemplary case studies, tax administration and state assets management, the empirical findings illustrate the political dynamics that induced organizational transformation and show how policy conditionality has changed the domestic agencification pattern and has rebalanced the institutional, functional, and democratic dimensions of agencies.

Keywords

public administration organizational reform agencification policy conditionality Greece

Introduction

The Eurozone crisis as well as the prior global economic and fiscal ones (Kickert, 2012) have unquestioningly affected the organizational patterns of public administration. Especially in countries that were severely hit by the crisis, such as Greece, the financial assistance programs set out a wide range of measures that should be implemented within a very tight timeline. In Greece, the debt crisis erupted in late 2009 and led to three successive programs of sweeping reforms, the so-called Memoranda of Understanding (MoUs, 2010–2018). The volume and the type of the required adjustments coupled with the short implementation frame placed enormous pressure on the administrative apparatus that was not used to rapid and radical reforms. Instead, the domestic administrative system has been characterized by long-standing resistance to change, cumbersome procedures, slow adjustment, (over)politicization, and low reform capacity (Featherstone, 2005, 2015; Ladi, 2014; Lampropoulou & Oikonomou, 2018; Spanou, 1998, 2001; Spanou & Sotiropoulos, 2011). The need for quick and large-scale adjustments called into question the capability of existing structures to effectively respond to the new policy formulation, implementation, and monitoring requirements. At the same time, the external involvement in domestic politics and the direct linkage of the reforms with the loans disbursement created a new policy environment defined by the conditionality clause that accompanied the bailout agreements (Featherstone, 2015; Spanou, 2018).

In light of these pressures and in search of more flexibility, credibility and effectiveness of public administration, critical functions and responsibilities were delegated from central bureaucratic structures to quasi-independent entities, which were placed at a distance from the ministerial bureaucracy. The nature of these agencies shows a clear tendency toward the strengthening of “arm’s length” bodies that are not subject to direct political and democratic control. The agencification trend was evidently stronger in reform areas that were linked with the economic adjustment programs and had a strong fiscal impact, such as tax collection and privatizations. In these areas, the crisis has changed the motives and the criteria for agency creation as well as their governance methods.

This article aims at investigating the implications of the aforementioned developments for the domestic administrative system. To that purpose, we delve into the agencification effects through the lens of policy conditionality, exploring its impact on the relationship between traditional bureaucratic structures and quasi-autonomous bodies. In our analytical scheme, we use as a dependent variable the structural transformations of public bodies in two policy fields that are highly contingent upon external conditionality, namely tax administration and state assets management. The external pressure for reforms has been the catalyst for a range of institutional adjustments and constitutes the independent variable. Policy conditionality serves as an intermediate variable, largely explaining the type and the scale of change in times of crisis, as well as certain particularities of the Greek case.

Our starting point is that the shift from traditional bureaucratic structures to semi-autonomous agencies has increased the complexity of policy-making and implementation and caused certain trade-offs between the goals and principles that the newly established agencies pursue. The complexity of policy-making is reflected on several variables of the political-administrative system in relation to the agencification trend in the crisis context: the multilevel process of decision-making and the involved (domestic and supranational) actors, the multiplication of structures involved in policy-making and implementation, the subsequent “inflation” and overlapping of administrative procedures and functions, the new coordination requirements between and within the national and supranational institutions, the domestic government and the decentralized agencies, the shift of control and accountability standards, and the (re)hierarchization of the political and the technical-managerial features of public organizations.

It is argued that these new arrangements created considerable tension within public agencies with regard to three critical dimensions: (a) the institutional (political autonomy), (b) the functional (technical effectiveness), and (c) the democratic (accountability). The relationship among these dimensions constitutes a critical “trilemma” in the process of the structural reform of public administration via agencification. This argument is linked with the nexus between the political and the administrative sphere, suggesting that the rebalancing of the aforementioned dimensions reflects a broader shift in the perception of the politics-administration dichotomy in Greece, which has been accentuated during the crisis.

The article aspires to contribute to the theoretical debate concerning agencification and administrative reform under policy conditionality. At an empirical level, we focus on the newly established agencies in the areas of tax administration and state assets management, respectively the Independent Authority for Public Revenues (IAPR) and the Hellenic Corporation of Assets and Participations (HCAP). The creation of these agencies was required by the Memoranda that were agreed between the Greek government and the “Troika”/“Institutions.”¹ The fiscal constraints and the pressure for delivering large-scale reforms within a very short timeframe provided the core rationale for the delegation of competencies that were traditionally exercised by ministerial departments to quasi-independent agencies. Along with the economic and technical arguments, this delegation of powers to arm’s length bodies aimed at the depoliticization of the administrative apparatus. In this respect, the subsequent organizational adjustments have sharpened the divide between the political and the administrative sphere.

Based on the “trilemma” proposition, the implications of the shift from bureaucratic structures to autonomous agencies are assessed with reference to three analytical criteria: (a) the institutional features of IAPR and HCAP and the governance, decision-making, and policy implementation tools; (b) the agencies’ function and performance; and (c) the democratic legitimacy and accountability framework. Greece represents an exemplary case study because the manifested agencification trend has been differentiated from similar reforms in other European Union (EU) countries principally due to the conditionality that linked the reforms with the loans’ disbursement. Policy conditionality has created a unique type of agencies that are characterized by multilevel and multistakeholder accountability. The criteria of agency creation, governance, and performance have changed as well, shifting the emphasis from the political to the technical and economic dimensions. Overall, agencification during the economic adjustment programs seems to have acquired new and exceptional characteristics that differentiate the post-crisis agencies not only from the pre-crisis ones at the domestic level, but also from the typical New Public Management (NPM)-inspired agency model. Based on the above claims, two main hypotheses are formed and will be tested in the analysis that follows: (a) the sharper separation between politics and administration and (b) the changing character of the domestic pattern of agencification under policy conditionality.

Theoretically, the analysis draws on the agencification literature and on the conceptual scheme of the politics-administration dichotomy. The empirical basis of the article consists of official EU and domestic documents, legislation, the Memoranda agreements, the national reform programs, the reviews of the adjustment programs, and quantitative data. In relation to the “trilemma” argument, the institutional dimension (political autonomy) is assessed with reference to the legislative provisions and the agencies’ institutional features. The functional dimension (technical efficiency) is measured based on the management–administration framework and the performance of the two agencies in qualitative and quantitative terms. The democratic dimension is evaluated in relation to the accountability and control mechanisms, particularly regarding the degree of involvement of the national Parliament. Qualitative data were also gathered via targeted, semi-structured interviews and discussions with policy-makers and top administrative officers of IAPR, HCAP, and the Ministry of Finance (MoF). Due to the fact that IAPR and HCAP have been established recently, thus being operational for a relatively short period of time, the available empirical evidence cannot be considered enough to provide a firm assessment; in this respect, our argumentation is mainly tentative and suggestive rather than strictly conclusive.

The article is structured as follows: The first section provides the theoretical background. We then describe the rationale, goals, and pressures for the creation of “arm’s length” bodies in the course of the economic adjustment programs in Greece. In the “Empirical Research: Role and Impact of the Independent Agencies” section, the two case studies are presented in relation to the three analytical criteria. The “Discussion: The ‘trilemma’ and the Politics-Administration Dichotomy” section assesses the overall impact of the agencification trend and discusses its implications for the rebalancing of the agency dimensions in relation to the domestic agency model and the politics-administration dichotomy. The main findings of the analysis and further challenges are summarized in the concluding section.

Theoretical Background and Conceptual Framework

The reform of the Greek public administration through the creation of quasi-autonomous agencies is linked with two main literature strands. The first one dates back to a fundamental proposition of the relationship between the political and the administrative system, which is well-known as the politics-administration dichotomy. The origins of this idea are traced in the works of the early founders of administrative science. Wilson (1887) suggested the separation of the political and administrative spheres, highlighting their distinct roles and functions: on one hand, political life is concerned with broader planning, decision-making, and legislative functions and is characterized by subjectivity, complexity, and uncertainty; on the other hand, the role of administration is mostly related to law implementation, practical, and technical tasks, following bureaucratic (rather than political) standards. Their main functions correspond, respectively, to “general plans” and “special means” (Wilson, 1887, p. 212). Goodnow (1900, Chapters II–IV), with reference to the separation of powers, further illustrated this argument: Politics refer to policy-making and to the way by which the state’s will is formulated and expressed; administration refers to the state machinery, including public services; its mission is to execute the state’s will and serve the public interest.

The differentiated functions of politics and administration define the nature of each sphere. Politics involves more discretion, subjectivity, and independence, while administration is characterized by greater stability, discipline, continuity, and standardization. Weber (1946) considered the politics-administration relationship with reference to the political neutrality and impartiality of the bureaucracy. He particularly emphasized the need for technical knowledge/scientific expertise and meritocracy in administration. The political sphere is concerned with power, influence, and ethical questions. On the contrary, administration, as the executive authority, should function on the basis of efficiency, impartiality, and integrity. Thus, the notion of “political neutrality” is critical in the function of administration (Overeem, 2005). Regarding the Greek case, the domestic administrative system has been long-suffering from (over)politicization and clientelism, which hindered any efforts to meet the aforementioned Weberian–Wilsonian standards of a clear divide between politics and administration.

The idea of the politics-administration dichotomy has revived in the context of agencification reforms that were linked with the recent economic adjustment programs. However, the approach was different from the traditional view and highly country-specific, as a consequence of policy conditionality. The separation of politics from administration underpinned a core argument of the recent agencification wave in Greece as regards the need to depoliticize certain functions through the delegation of powers to independent bodies. The detachment of administrative tasks from the political level was a core external demand, to ensure the credibility of policy implementation according to the agreed plan. This prerequisite was overemphasized due to the lack of trust in Greek governments’ credibility, their weak commitment to fully implement the adjustment programs and political instability (Spanou, 2018). At the same time, it assured, to some extent, policy continuity (Pagoulatos, 2018, p. 10). In this respect, the creation of IAPR and HCAP was a means of circumventing the central ministerial structures and/or national governments by detaching the tax administration and assets management from direct political control, which is a common implication of agencification (Egeberg & Trondal, 2009).

However, in the relative, literature is stressed that the administrative sphere should meet certain democratic control and accountability criteria. In relation to the politics-administration dichotomy, administrative functions (law execution) should necessarily be subordinated to the function of politics (law-making; Goodnow, 1900). This condition has been strongly questioned within the framework of the new institutional arrangements that followed the creation of arm’s length bodies during the Greek debt crisis, as will be discussed in the following sections.

Notwithstanding the usefulness of the politics-administration dichotomy as a normative and conceptual (or even symbolic) scheme for the study of government, its perception as an absolute distinction of the two spheres has been often misinterpreted. In Waldo’s early publications, the “simplistic” idea of a rigid separation between politics and administration, as, respectively, decision and execution, has been questioned (Waldo, 1948, pp. 106–129; Overeem, 2008, pp. 37–38). The dichotomy notion has been mostly criticized from the point of view of its practical and empirical value, as the work of government cannot be isolated and strictly divided into disjointed functions. The idea of the separation of the two spheres does not mean that they are unrelated and independent. On the contrary, the relationship between politics and administration is based on complementarity, interaction, and interdependence (Demir, 2009; Denhardt, 2015; Riggs, 1987; Svara, 2001). Besides, policy formulation and implementation are parts of the broader policy process and do not constitute isolated functions, thus the dividing line of tasks between political and administrative actors cannot be a definite issue (Verschuere, 2009).

Further theoretical developments as well as observed empirical drawbacks of the traditional bureaucratic structures sparked a new strand of academic literature, which favorably argued for the separation of administration from politics from a different point of view from the Wilsonian dichotomy. This line of arguments is closer to the official rhetoric of agencification in Greece during the crisis. Mostly inspired by The New Institutional Economics (North, 1991; see Chavance, 2009) and, in particular, the NPM (Hood, 1991; Pollitt, 1990), proponents of these new theoretical strands held the view that public bodies should function “at arm’s length” from the government (Verhoest, 2013) to cope with multifaceted, socioeconomic problems. The subsequent delegation of powers from central government structures to quasi-autonomous agencies signifies a critical aspect of administrative reform that is directly linked with the agencification trend.

Providing a single and coherent definition of the term “agency” is considered to be a rather difficult task (Laking, 2005; Organisation for Economic Co-operation and Development [OECD], 2002; see also Wettenhall, 2005, for a broader discussion). In terms of a single taxonomy, there have been proposed many types of agencies based on their size, function, rationale for their establishment, or their relationship to the competent ministry (OECD, 2002, pp. 10–11). Pollitt et al. (2005, p. 10) define agencies as organizations that operate within the provisions of public law, do not pursue commercial goals, are politically disaggregated and enjoy some degree of autonomy, though they are linked to some ministry or department of state and therefore are not fully independent entities. Laking (2005, p. 9) referred to agencies as organizations that operate outside the core government and have not any hierarchical relation with any ministerial structure. For the purpose of this article, agencies are considered to be decentralized, flexible public bodies that function independently from the “parental” ministry, and enjoy a high degree of political autonomy and discretionary power; the latter allows them to manage their resources (financial as well as personnel) and make policy decisions on their own will.

The main rationale for creating new, disaggregated institutions with increased political autonomy was that traditional public bureaucracies suffer from several functional drawbacks. Their main weaknesses include the existence of transaction costs and asymmetric information, the lack of incentives for increasing personnel’s productivity, excessive formality, and increased emphasis on administrative procedures rather than on results (Schick, 2002; Thatcher, 2005, p. 349). In addition, it has been argued that political ties do not allow public bureaucracies to maximize their performance; instead, they tend to serve the interests of the bureaucrats (Niskanen, 1971) or their principals (politicians) “only if it pays off for them” (Tullock, 2002, p. 55). As a response to the aforementioned criticism, agencies were expected to overcome (or by-pass) the weaknesses of the old bureaucratic structures. The new entities generally aimed at achieving high organizational performance and results,² based on a managerial perspective on public administration that borrowed a great deal of its rationale from the private sector. The establishment of decentralized, separated, and autonomous public institutions that operate without, at least direct, political interference and supervision allowed the agencies to enjoy high degrees of freedom in terms of decision-making and policy implementation.

The detachment of administrative bodies from political interferences was a core external demand in the course of Greece’s economic adjustment program that dictated the creation of the agencies for tax administration and public property management. Contrary to the typical reaction of governments to financial crises, namely the restriction of agencies’ autonomy, “de-agencification,” and more centralization (Randma-Liiv et al., 2011; Verhoest, 2017), in Greece an adverse tendency was observed, that is to say the multiplication of agencies in key policy areas. This proliferation of agencies was also observed at the EU level in the aftermath of the global financial crisis of 2007–2008 (Scholten & van Rijsbergen, 2014). Regarding the creation of IAPR and HCAP, their establishment was not a Greek peculiarity since similar agencies exist in other European countries as well.³ However, the creation of such agencies under policy conditionality is an exceptional case of agencification that goes along with certain specificities which are analyzed in the following sections.

Beyond the anticipated benefits of the agency model proponents of the agencification trend cope with growing criticism stating that agencies tend to operate with low degrees of accountability which may lead to corruption phenomena, skipping of general rules for hiring employees, “captivation” by those that they are supposed to administer/regulate or even failing to fully understand implementation issues with regard to public policies (see Laking, 2005; Pollitt et al., 2005; Thatcher, 2002). The weak democratic accountability and the legitimization of the quasi-autonomous bodies stand as typical agency problems (Busuioc, 2009; Lord, 2011; Shapiro, 1997) and has been a highly controversial issue with reference to the Greek agencies under study.

Certain concerns were also raised regarding the actual commitment of the agencies to their official mission and the public interest. Although IAPR and HCAP do not face the usual risk of regulatory capture, that is, the risk to operate for the benefit of the regulated industries (Stigler, 1971), a different captivation possibility arises due to the specificity of the accountability framework and the involvement of supranational institutions (see the “Empirical Research: Role and Impact of the Independent Agencies” section). Because of this specific condition, IAPR and HCAP may be susceptible to a form of “external captivation” by the country’s lenders, foreign governments, and/or industries, which in turn may displace their focus toward external preferences rather than the national government’s priorities. Furthermore, if the agencies’ outcomes deviate from the preferences of their political principals, problems of bureaucratic drift may occur (Christensen & Lægreid, 2005b, p. 17).

Figure 1 depicts a conceptualized form of our analytical framework in line with the “trilemma” proposition. Efficiency, political autonomy, and accountability represent the quasi-competing aspects of the different organizational patterns. Despite the fact that political autonomy and accountability have been major issues for scholars for many years (Christensen & Lægreid, 2005a, 2005b; see also Rittberger & Wonka, 2011), in the following analysis the functional component is considered as a third critical dimension which contributes to a more holistic approach and a better understanding of the challenges facing public entities. The three dimensions provide a rather general, yet highly comparative picture of the institutional advantages and weaknesses of both traditional bureaucratic structures and agencies. In short, bureaucratic structures can be held accountable for their actions, but they are weaker in achieving high organizational performance and optimal results in an efficient, (technical) effective, and cost-saving way. Similarly, they do not have significant autonomy to act independently of the competent Minister. On the other side, agencies are considered to be specialized bodies aiming primarily at maximizing performance and results and they are not held accountable for their actions in the same way as their bureaucratic counterparts. In addition, they enjoy considerable political autonomy which allows them for decision-making based upon technical/scientific knowledge rather than on political pressures. These factors are further specified and elaborated with reference to the organizational transformations of the Greek administrative apparatus in light of the agencification trend.

Figure 1.

Conceptual framework: The “trilemma” of public bodies.

Agencification During the Crisis: Goals, Rationale, and Pressures

A central goal of the administrative reform programs that were initiated under the financial assistance agreements (MoU)⁴ has been the depoliticization of public administration. This prerequisite has called for a reconsideration of the relationship between the political and the administrative spheres. A means for depoliticizing administrative functions has been the delegation of responsibilities from traditional bureaucratic structures to quasi-independent agencies that are not hierarchically subordinate to a Ministry. The creation of independent agencies was directly dictated by the Memoranda agreements, stressing the need for transforming key bureaucratic structures into results-oriented agencies. The core rationale for agencification was to ensure the operational and functional independence, transparency, and greater efficiency of entities responsible for policy implementation, especially in areas with a considerable fiscal impact, coupled with requirements to better monitor the progress of the reforms. Along with the low trust toward the domestic political system, delegation to independent agencies seemed to be a practical solution to the weak ownership of the programs by the Greek governments (Featherstone, 2015; Spanou, 2018).

Contrary to other countries (see Pollitt & Bouckaert, 2011), in Greece, the agencification trend evolved in a rather hybrid—or even controversial—way, leading to a variety of institutions. Considering the scale of change during the crisis, evidence shows that in the past 8 years, the number of independent agencies and entities was doubled compared with the period before 2010. The external pressures from the country’s international creditors have facilitated and, in some cases, directly imposed the creation of new bodies, such as IAPR and HCAP. Thus, the national and international context of institution building differs significantly. The critical factor for the delegation of competences to “arm’s length” bodies was not an overall restructuring plan of public administration, but policy conditionality prescribed in the MoUs.

With regard to our case studies, the creation of IAPR was chiefly a result of external pressure posed on Greece by its creditors. The competent structure for public revenue was initially established as a hybrid, quasi-autonomous unit within the MoF in late 2012 (Secretary General for Public Revenue [SGPR]). After a strong disagreement between the Head of the SGPR and the MoF over management issues, the former was forced to resign without completing their 5-year term in office. That incident increased external pressures for the depoliticization of the SGPR and paved the way for its complete transformation into an independent body, which was required by the third MoU (2015). The new agency, namely the IAPR, was finally created in 2016. Likewise, the creation of HCAP and its subsidiaries aimed at depoliticizing, better monitoring and rendering more transparent, professional, and technically effective the management of state assets. The establishment of an independent (depoliticized) state holding company for the consistent implementation of the privatization program has been a core demand and a prerequisite for the disbursement of the loans.⁵ This was the main rationale for the creation of HCAP in 2016. In light of the evident lack of trust in the domestic political system,⁶ it was deemed necessary to place the competent agency under the supervision of the European institutions, which constitutes a unique feature of the postcrisis agencification process.

Administrative change did not come smoothly, as the launching of the measures was accompanied with considerable resistance at the domestic level. Implementation risks were considered very high in areas such as market liberalization and tax evasion and they were traced at multiple levels: bureaucratic delays, lobbies’/vested interests’ resistance and deep-rooted policy “taboos” (European Commission, 2012, p. 4). For instance, the establishment of the IAPR took longer than international lenders desired due to bureaucratic resistance. In the same vein, the creation of HCAP and the transfer of valuable state assets to its portfolio faced considerable opposition from a range of actors affected by this decision, namely state-owned enterprises, workers’ unions, and line Ministries, who perceived HCAP as a means of restricting their powers. The national government also initially opposed to the creation of the Fund, but their propositions did not manage to override the external demands.

Empirical Research: Role and Impact of the Independent Agencies

The creation of IAPR and HCAP has led to the reallocation of the competences of the Greek MoF in two major policy areas: the collection and monitoring of public revenues and the management of state assets. In this section, the main features of the two agencies are described in relation to the three criteria of our analysis.

The Institutional Dimension

Institutional features of IAPR and HCAP

Policy conditionality is a key-instrument for inducing institutional change, which in the case of Greece was directly linked with the restructuring and depoliticization of the competent agencies for public revenue (Dimitrakopoulos & Passas, 2019) and state assets management (Lampropoulou, 2019). From the standpoint of the country’s lenders, depoliticization was perceived as the strengthening of the technical, economic, and managerial dimensions of agencies and called for a clearer separation between politics and administration. These demands have largely defined the institutional features of the two agencies.

According to IAPR’s organic law (No. 4389), the Authority aims at collecting all public and custom revenues on behalf of the Greek state. In addition, IAPR is responsible to monitor the state’s revenues growth and to implement any measure, within its legal jurisdiction, for the maximization of the organizational performance. Among its tasks is also the fighting against corruption, tax evasion, organized fraud, as well as the elimination of phenomena of “black market economy.” Furthermore, IAPR is responsible for coordinating its departments that are geographically dispersed across the Greek territory. Regarding policy-making tasks, the agency is responsible for submitting draft proposals to the MoF as well as for expressing its opinion on draft laws of the Ministry.

IAPR is fully independent in administrative, economic, and political terms (see also Dimitrakopoulos & Passas, 2019), without being accountable to other state administrative bodies, except for the Hellenic Parliament by which is supervised. Similarly, there is no hierarchical relationship between IAPR and the MoF. The Head of the IAPR is the Governor who is responsible for the management of the Agency’s resources (financial and human); in addition, the Administrative Board is comprised of five members and among its duties is to provide the broad policy guidelines, which the Governor is bound to implement. In sum, IAPR is comprised of five Directorate Generals, seven Directorates, a training Academy, as well as several local tax and custom offices across the country.

IAPR replaced the previous institutional structure of the MoF, the SGPR. The latter was established in 2012 (Law 4093) as the successor of the General Secretary of Tax and Custom Affairs (GSTCA) of the same Ministry. In addition, responsibilities of the Special Body for Economic Crime (SBEC) were transferred to the SGPR. The Head of the SGPR would be appointed for a period of 5 years (plus a 5-year renewal) and was proposed by the MoF with whom the Head was obliged to sign a contract including the quantitative and qualitative targets that he or she had to accomplish; in turn, the Ministerial Council of the Greek Government was held responsible to decide on the basis of the proposal of the MoF. At this time, the SGPR was considered to be a semi-autonomous agency (European Commission, 2017, p. 55).

The agencification trend in the field of state assets management was expressed through the assignment of certain competencies that traditionally belonged to the MoF to three new entities: the Hellenic Republic Asset Development Fund (HRADF, 2011), the Public Properties Company (PPC, 2011), and their mother company, the HCAP (2016). The first agency that has been created in the course of the economic adjustment programs was the HRADF in 2011 (HRADF/TAIPED, Law 3986/2011). HRADF was established with a 6-year duration, which has been extended in 2017 for 3 more years. The aim of creating an independent entity was clearly to restrict government intervention in the process of state assets privatization (European Commission, 2017, p. 163). Unlike public sector bodies, the Fund’s legal form is a public limited company (Société Anonyme [SA]) and operates according to the rules of corporate governance. Its main mission is the implementation of the privatization program and its portfolio includes three main categories of assets (land development, infrastructure, corporate). The Fund is managed by a Board of Directors (BoD), which is composed of professionals from the banking, business, consultancy, and legal services’ sectors, assisted by a Council of Experts and ad hoc international consultants for each project. HRADF practically replaced the Special Secretary for Privatizations and the Special Secretary for State-Owned Enterprises of the MoF, which were abolished in 2012. The remaining competences (mainly the monitoring of the finances of state-owned enterprises) were initially transferred to a special directory of the MoF and 2 years later, in 2014, to a department of the State General Accounting Office.

The second agency, the PPC (SA), had been initially established in 1998, but took its current form in 2011, after the merger of existing companies in the area of real estate and state property.⁷ Its main responsibility is the management and development of public property and closely cooperates with HRADF. PPC is managed by a seven-member board, which operates according to the corporate governance rules and procedures. Interestingly enough, PPC did not replace a Ministerial structure, as did the HRADF, but, on the contrary, in 2011 a new General Secretary of Public Property was created in the MoF. Hence, a central structure and a decentralized agency co-exist in this policy area.

The critical shift in the balance between traditional ministerial structures and agencies has been the establishment of the third agency, the HCAP, which is the mother company of HRADF and PPC. HCAP (2018) was created in May 2016 as a single institutional structure and is competent for the management and exploitation of state assets (p. 3). As in the case of HRADF, HCAP serves a specific public purpose, namely the management and development of state assets, with the aim of contributing to the economic recovery through investment and the impairment of the financial obligations of the country. The creation of HCAP was the result of externally imposed demands for the establishment of a single entity that would manage and monitor public undertakings and real estate assets in an independent, professional, and transparent way (European Commission, 2017, p. 136). The company is currently managed by an eight-member BoD and supervised by a five-member Supervisory Board.

Decision-making, implementation, and governance

Policy conditionality has a direct effect on the domestic policy-making system (Spanou, 2016), which is further reflected on the tools, methods, and processes of policy implementation. The new agencies, apart from their distinct legal status, incorporate new decision-making and governance methods that differ from the typical bureaucratic practice. The IAPR, though independent, is legally abided by the rules of the administrative law and the same pertains for its personnel. The agency operates under specific regulation and draws up a 4-year strategic plan and yearly business plans which are accompanied by annual reports and financial statements regarding the management performance of the previous year. In terms of policy-making, the relationship between the IAPR and the MoF has utterly changed after 2016, since when the MoF does not interfere with the IAPR’s responsibilities. The two institutions cooperate on legislation and implementation issues whereas the MoF is not allowed to exercise any hierarchical control over the IAPR; on the contrary, any ministerial direction cannot extend to operational issues, even in information requests and individual cases of the IAPR (European Commission, 2017, p. 55). In addition, the MoF lacks official capacity to dismiss the Head of the IAPR, except for requesting from the Administrative Board to issue an opinion about the continuation of the mandate of the Head of IAPR on the grounds of performing successfully (or not) the managerial contract (European Commission, 2017).

In practice, the relationship and the collaboration between IAPR and MoF as well as the division of their powers and competences is not always clear and functional. The MoF is still rather skeptical of IAPR’s independence and several tensions arise at the policy-making level. The main problem is that the Governor of IAPR does not have the power to legislate, as the proposals and amendments of the legislative framework fall within the competence of the MoF. However, the latter, due to the structural separation of IAPR from the Ministry is not always fully informed of all necessary technical details of the tax policy, or even may not agree with the proposals of IAPR. Thus, delays, tensions and/or disagreements may occur in the relationship between the MoF and the IAPR.

The Governor of the IAPR is appointed for a 5-year term with an option for another 5 years in office. The Governor decides upon human resource management issues and has the power to provide incentives based on performance. Apart from the Head of the IAPR, the Administrative Board stands for the principal collective body of the organizational architecture of the Agency. The Board is comprised of five members in total, including its President for a 5-year period. Interestingly, the selection of the Board is based on a unique procedure in which the Supreme Council for Civil Personnel Selection (independent administrative authority) is represented by its President. In addition, for the first 7 years of the operation of the Agency, two out of the seven members of the selection committee should be officials of the European Commission. This condition is indicative of the external pressure that was posed on Greece due to the mistrust in domestic actors, and underlines the uniqueness of the Greek agencification pattern as well. In addition, an international expert proposed by the European Commission is appointed in the IAPR to provide advice on best practices to the Board. Figure 2 summarizes the organizational and functional core features of the IAPR.

Figure 2.

Institutions and operation of the tax administration system.

Similarly, to the IAPR, the type, nature, and organizational standards of HCAP differ significantly from the typical bureaucratic structures. First, regarding the legal form, HCAP and its subsidiaries are public limited companies (SA) that are not part of the public (or the wider public) sector. They operate in the public interest and their main mission is to serve a specific public purpose, namely the management and exploitation of state assets. Unlike administrative law and procedures applied in the case of Ministerial structures, these companies operate according to the rules of the private economy, on the basis of entrepreneurial standards and in accordance with the Corporate Governance Code and the provisions of Law 2190/1920 for SAs. Likewise, decision-making process is subjected to the rules of corporate governance.

Since the creation of HRADF and HCAP, the context of government intervention in the area of state assets management and the competent political and administrative structures have changed. The role of the government is defined on the basis of the MoF’s rights as the sole shareholder (and owner) of HCAP and substantially differs from the notion of political oversight. The MoF is the key contact point between HCAP and public administration and is also responsible for the coordination between the state, HCAP, and its subsidiaries regarding the implementation of public policy (HCAP, 2018, p. 2). However, apart from setting out the general policy directions, the MoF cannot interfere in the operation of HCAP and its subsidiaries. As in the case of IAPR, the government had strong reservations about the detachment of HCAP from the ministerial bureaucracy (MoF) and, consequently, its direct political control. In relation to the IAPR, HCAP is considered less vulnerable to political interference; however, certain incidents of political interventions regarding the implementation of the privatization program have occurred.

The governing bodies of HCAP differ from the traditional administrative heads of units of the bureaucracy. HCAP management is based on a threefold scheme including the General Assembly, the Supervisory Board, and the BoD. The General Assembly of the sole shareholder (Greek state, represented by the MoF) is the supreme body of HCAP and decides on the main issues defined by the relative legislation. The Supervisory Board is responsible for the supervision and the evaluation of the BoD. Three members are selected by the sole shareholder (MoF), with the agreement of the European Commission and the European Stability Mechanism and two members, including the Chairman of the Board, are selected by the European Commission and the European Stability Mechanism, with the agreement of the MoF. The BoD is appointed by the Supervisory Board and is responsible for the management of the Company. Similar to the IAPR, the direct involvement of supranational institutions in the governing bodies signifies a critical difference between the traditional administrative structures and the newly established agencies, underlying the specificity of the Greek agencification pattern.

Policy tools also diverge from the instruments related to the traditional bureaucratic structures. The key policy instrument of HCAP is the Strategic Plan of the Company, which is prepared on the basis of the Strategic Guidelines provided by the MoF and defines the overall strategic approach and the main objectives and priorities of the management and exploitation of the portfolio of state assets and participations. The current scheme of decision-making and policy implementation as well as the governing bodies of HCAP are summarized in Figure 3.

Figure 3.

Institutions and operation of the state assets management system.

The Functional Dimension

Since 2012, significant tax administration policy actions were put forward as part of Greece’s adjustment programs. The income tax code and the procedures code (Laws 4172/2013 and 4174/2013) were considered as key steps toward streamlining procedures and increasing transparency for tax payers, as well as simplifying and modernizing the tax system (European Commission, 2014, p. 30). These measures mainly aimed at fighting tax evasion and raising tax revenues (European Commission, 2014). While much remains to be done, tax collection is considered to have been improved (OECD, 2018, p. 5). Figure 4 shows the collection of tax revenues based on data provided by the MoF (state budget reports) and the IAPR. Tax revenues gradually decline after 2011 (figures in absolute numbers), during the first year of the operation of the semi-independent SGPR (2012–2015). The declining trend gradually weakens and, in 2016, when the SGPR was transformed into a fully independent agency (IAPR), tax revenues show a significant increase in comparison to the previous year. In 2017, the amount of collected taxes remained approximately the same (IAPR, 2018). Thus, the creation of the quasi-autonomous structure within the MoF (SGPR) in late 2012 does not seem to have altered the picture of the decreasing numbers in tax collection. On the contrary, the establishment of IAPR in 2016 was followed by a significant increase in the collected revenues.

Figure 4.

Tax revenues, 2011–2017.

Notwithstanding the fact that the creation of IAPR cannot be solely considered as the only explanatory factor,⁸ the observed improvement after 2016 implies at least some sort of functional enhancement/improvement, also taking into account the adoption of fiscal policy management tools (tax codes) that allowed for increasing the effectiveness of the tax system. This improvement of the functions that were delegated to IAPR is confirmed by the interviewees, both from the MoF and the IAPR. However, they point out that the technical criterion of the agency’s efficiency (revenues) should better combine standards of qualitative effectiveness (type and targeting of audits).

Along with the creation and strengthening of the independent authority (IAPR), other factors that accompanied its establishment have contributed to the observed improvement, for instance, the initiation of new and the upgrade of existing ICT (information and communication technology) applications supporting tax revenue services (i.e., the new system for collecting revenues—TAXIS—fully operationalized in 2013) and their interconnectivity, improvements in the value-added tax (VAT) system (European Commission, 2012, pp. 86, 195), the automation of the debt collection, the increase of IAPR’s organic positions, the staffing of tax authorities (Angerer, 2018, pp. 11–12) and other ongoing reforms (Pitsilis, 2018). Empirical data show that the increased VAT receipts, excise duties, collected income from previous years (tax debt), the rationalization of legislation for tax compliance and the fight against evasion have increased the overall effectiveness of the tax system (Angerer, 2018). This increase of tax revenue is also explained by the implemented fiscal policy. For instance, measures that enhanced taxation are expected to raise revenues, such as an increase in the VAT rate⁹ and the abolition of the special reduced VAT regime.

Regarding the management of state assets, the function and performance of the competent institutions seem to have improved since the creation of HCAP and its subsidiaries. Progress has been recorded regarding the classification of real estate assets, the collection of lease receivables, the strategic planning for managing HCAP’s portfolio, the staffing, boards’ review, and the monitoring of HCAP’s direct and indirect subsidiaries (European Commission, 2018b, pp. 57–58). In addition, evidence shows that the scheduled privatization transactions proceeded (European Commission, 2018b, pp. 59, 32–35) and revenues tend to increase since 2016 (Figure 5), implying an improvement in policy planning and implementation. In addition, HCAP was considered as a positive initiative for the improvement of the management of state’s assets, ensuring a better coordination of two major policy areas, namely privatization and public investment (OECD, 2018, pp. 29–30). The suggested improvement of the technical efficiency is affirmed by the interviewees’ responses (MoF and HCAP). However, as in the case of IAPR, they also stress the importance of the qualitative dimension of privatizations, regarding the prices and offers of the state assets, as well as the long-term performance of the investments.

Figure 5.

Privatization revenues, 2011–2018.

It should be noted that, while privatizations have been evidently accelerated, the amount of the revenues raised is fairly lower than the initial goal and projections, leading to successive downward revisions (European Commission, 2014, p. 27). Furthermore, the observed improvements are not solely explained by the creation of HCAP, but also depend on other factors. A key-explanatory factor is the quantitative increase in the number and, consequently, the total value of the privatization portfolio assets, due to the massive transfer of corporate, land development and infrastructure assets to HCAP and its subsidiaries, most of which were not planned to be privatized (at least not to that extend and within this timeframe) before the crisis. Since the eruption of the crisis, the number of assets included in the privatization program has been significantly increased. This expansion also explains the increase of the privatization proceeds, although the value of the privatized assets has been decreased. Furthermore, privatizations affect but are also affected by the macro-economic environment that may facilitate or hinder investment activity, for instance debt sustainability and growth prospects (Christodoulakis, 2011). Thus, the relative stabilization of the Greek economy could provide an additional explanation for the increased privatization receipts.

The Democratic Dimension

Delegation to nonmajoritarian institutions has been criticized with regard to legitimacy and democratic accountability concerns (Laking, 2005; Majone, 1999; Thatcher & Sweet, 2002). In Greece, the issue of legitimacy and accountability of IAPR and HCAP seemingly was not part of the reform agenda of the crisis period, as the criterion for the separation of administration from its political components utterly prevailed. Emphasis was placed on governance, oversight, transparency of reporting and compliance standards, detaching the new agencies from the traditional political and democratic procedures. In relation to the distinction of the legal, administrative, and political understanding of accountability from a professional and market-oriented one (Lodge & Stirton, 2010, p. 357) in the Greek agencification case, a shift has occurred toward the latter type of accountability.

Along with the rebalancing of the trilemma components, the democratic dimension was also redefined. Before the crisis, independent agencies were mostly criticized for their insufficient democratic accountability and their weak relationship with the parliament (Chrysogonos, 2000; Contiades, 2003; Papadopoulos, 2010). IAPR and HCAP respond to different control and accountability standards, as the perception of their accountability to the domestic political system has changed regarding both its content and nature (political vs. technocratic) and its locus (national vs. supranational).

Accordingly, the divide between the political and administrative sphere seems to have been accentuated during the economic adjustment programs (2010–2018). External pressures for overcoming the resistance of the political actors and restricting their interference in the operation of public administration served as a mediating factor which facilitated the transformation of bureaucratic structures into (quasi-)independent agencies. Accountability and legitimacy issues of IAPR and HCAP were left aside, as the fiscal pressures tended to monopolize the domestic reform agenda.

The new control and accountability standards for IAPR and HCAP clearly signify a critical shift in the traditional submission of bureaucratic structures to the hierarchical control of the competent Minister, who is in turn accountable to the Parliament. In the case of IAPR and HCAP, technical expertise and effectiveness have prevailed over traditional administrative values of democratic control and accountability. Especially in the case of HCAP, its legal form as an SA has imposed a management, governance, and accountability scheme that substantially deviates from the traditional administrative and political procedures of the bureaucracy. As a result of the external pressure for depoliticizing the relevant functions, both agencies operate at a distance from the political system and no direct ministerial oversight applies. Although IAPR and HCAP are obliged to publish reports and reviews of their activities on a regular basis, aiming at enhancing transparency, such mechanisms are not linked with any form of political control or accountability.

Regarding the relationship of the new agencies with the Parliament, the provisions for parliamentary control are weak. In the case of the IAPR, the members of the Administrative Board and the Governor may appear before the competent Parliamentary Committees, after a request or on their own initiative, on issues pertaining to the Authority’s competences and responsibilities (Law 4389, art. 4). However, this process is mainly informative and does not constitute a substantial means of democratic control. Similarly, HCAP is subjected to transparency and publicity obligations (including the company’s regular Reports), as well as to the provided by the law hearings at the Hellenic Parliament (HCAP, 2018, p. 33). These processes empower the dimension of transparency in the sense of information, but do not include other fundamental aspects of transparency and accountability (see Lodge, 2004), thus cannot guarantee the democratic accountability of the company. Besides, HCAP is primarily bounded by corporate control and governance rules due to its legal form (SA). Even if the sole shareholder is the Hellenic Republic represented by the MoF, the control that the latter can exert as a shareholder substantially differs from the traditional political control–oversight.

A critical finding that indicates an exceptionality of the Greek case is the direct involvement of the European institutions in the selection and composition of the governing bodies of IAPR and HCAP. In the organic laws of the two agencies, it is provided that supranational institutions,¹⁰ which are not directly democratic elected and accountable, are involved in decision-making processes. In this respect, this unique provision along with the policy conditionality factor create two distinct dimensions of agencies’ control and accountability within the national and the European context as well. Thus, the agencies are accountable not only to the national government but also to (multiple) supranational bodies whose democratic legitimacy is rather vague. Furthermore, especially in the case of HCAP, the type of control as well as the role of the overseeing bodies focuses on corporate standards rather than political control. The agencies are thus accountable to multiple levels and stakeholders, which constitutes a key-particularity of the domestic agencification reforms. In addition, these new agencies may have been seen from certain internal and external officials and policy actors as a means for pursuing their own interests and agendas, which raises further questions for the public interest.

Discussion: The “Trilemma” and the Politics-Administration Dichotomy

Christensen and Lægreid (2005a) have found that with regard to the balance between political control and agency autonomy, there is much instability, which stands as a core, systemic feature of the relationship between these two variables. In Greece, the politics-administration relationship has been rather controversial and the idea of a dichotomy in the sense of a balanced and effective division of labor between the two spheres was never really embedded in the function of the domestic political-administrative system. The notion of the dichotomy can be traced in the normative principles and the law providing for the impartiality and political neutrality of the administrative apparatus.

However, in practice, these provisions have been eroded by the heavy politicization, the tight control, and the constant interference of the political/party system in the operation of the bureaucracy. The domestic administrative system has been characterized by clientelistic practices, political interference, and patronage (Dimitrakopoulos, 2001; Featherstone, 2005, 2015; Ladi, 2014; Makrydemetris, 1991; Samatas, 1986; Sotiropoulos, 2003; Spanou, 1998, 2001) that have blurred (and sometimes distorted) the boundaries between the two spheres. Thus, a clear distinction has never existed and the dichotomy has always been a weak one. This problematic, “symbiotic” in Spanou’s (2001) words, relationship between bureaucrats and politicians became more controversial due to the proliferation of quasi-autonomous agencies during the crisis.

The specificities of the postcrisis agencies can be linked with particular aspects of the “trilemma” argument. In relation to the institutional dimension of IAPR and HCAP, in the aftermath of the crisis, the politics-administration dichotomy became sharper and was accompanied by a clearer separation of the policy decision and delivery roles, as a response to the external demand for policy credibility and depoliticization. The assignment of specific missions and tasks to executive agencies aimed at detaching policy delivery from political interference. Thus, contrary to the precrisis agencies, the creation of IAPR and HCAP as independent structures was not a domestic decision but an externally imposed request.

Regarding the functional dimension, under policy conditionality and growing fiscal pressure the quasi-autonomization of IAPR and HCAP was a means for securing that the implementation and the outcomes of the required reforms will remain in line with the agreed commitments, regardless of any domestic political upheaval. Accordingly, effectiveness in policy delivery became a top-priority of the agencification agenda, however, in a quite specific context that focused on particular aspects of agency performance. The rationale for creating these agencies primarily emphasized their technical and economic features and is doubtful that included any broader political-administrative considerations, upon which many of the precrisis agencies have been established.

Concerning the democratic dimension, compared with the precrisis agencies IAPR and HCAP have been subjected to different accountability standards, due to the strengthening of their technocratic and external (supranational) accountability. In line with the hypotheses of the principal–agent model, the new agencies are held accountable to multiple principals, namely the national government and the EU institutions, implying different forms, criteria, and tools of control. On one hand, IAPR and HCAP are indirectly subject to a form of political oversight through the ministerial guidelines and parliamentary procedures. On the other hand, their function and performance are being closely monitored and evaluated by the EU institutions and have been linked with certain targets and obligations set out in the Memoranda and the postprogram surveillance framework. In this respect, a new layer of principals has been added on top of the domestic agency scheme, shifting the accountability chain beyond the national government. The main tool for the agent’s compliance is the linkage of the required reforms with the loans disbursement, that is, policy conditionality.

This scheme strongly resembles with a typical feature of agencification, namely the contract-like relationship between the principal and the agent, where the delegation of authority is accompanied by a set of goals that are defined by the principal and the must be met by the agent, which are often specified in contracts. However, the obligations and rights that derive from a contractual relationship and the prerequisites of political control and democratic process are evidently of different nature. Another key-difference between IAPR and HCAP and the typical agency model is that the contract terms are largely defined at the supranational rather than the domestic level by principals who are not democratically elected or accountable to the Greek political system.

Drawing on the findings of the analysis, Table 1 summarizes the main differences between the (old) bureaucratic structures and the (new) agencies in the areas of tax administration and state assets management in line with the “trilemma” dimensions. As regards the institutional dimension, IAPR and HCAP differ from the traditional bureaucratic structures in several respects. The new agencies have a distinct legal form and are governed by their own administrative boards. Their management is not hierarchically subordinate to the MoF, who can no longer intervene in or veto their decisions. Thus, the Greek political system has lost a policy area to which used to exert strong influence regarding the decision-making and implementation process. Regarding the functional dimension, IAPR and HCAP appear more flexible, (technically) effective, and less politicized than the ministerial bureaucracies. Notwithstanding other factors affecting policy outcomes, some progress has been also recorded with regard to their performance and policy delivery. With respect to the democratic dimension, the two agencies are characterized by weaker ties with the political system and the government and are not subjected to direct political oversight or parliamentary control. Although transparency has enhanced, there is no direct link with a democratic control process; thus, they are not held accountable in the sense of the traditional democratic legitimacy of the bureaucracy. In addition, a new level of accountability was added toward supranational actors, which is an exceptional feature of IAPR and HCAP.

Table 1.

A Comparison of the Traditional Bureaucratic Structures and the New Agencies.

Dimensions	Old bureaucratic structures	New structures—agencies
Dimensions	MoF (before 2010)	IAPR (2016)	HCAP (2016)
Institutional dimension
Relationship with the government	Direct—hierarchical	Direct—nonhierarchical	Weak/indirect
Political oversight	Direct control	Extremely low	Extremely low
Power of Government to stand as a veto-player	High	Low	Low
Governing bodies	Administrative officers	Administrative Board	General assembly of the shareholders Board of directors
Functional dimension
Effectiveness	Political interventions Heavy—complicate procedures	Flexibility Depoliticization Technical expertise	Depoliticization Flexibility Technical expertise
Performance	Low Internally monitored	Partly improved Externally monitored	Partly improved Externally monitored
Democratic dimension
Political accountability	Medium (Hierarchical political control)	Low Multilevel	Very low (Corporate control) Multilevel
Parliamentary control	Medium (Indirect control through the Minister)	Low	Low

Source. Own elaboration.

Note. MoF = Ministry of Finance; IAPR = Independent Authority for Public Revenues; HCAP = Hellenic Corporation of Assets and Participations.

The findings also show that the division between politics and administration in Greece has been accentuated as a result of the growing agencification trend, especially in policy sectors that relate to economic and financial functions. The new agencies in the areas of tax administration and state assets management are evidently characterized by greater (technical) efficiency and effectiveness (functional dimension) and political autonomy (institutional dimension) than the MoF’s traditional structures. On the contrary, both agencies show a significantly lower degree of accountability and democratic legitimacy (democratic dimension) than the traditional ministerial structures. These shifts are illustrated in Figure 6.

Figure 6.

The “trilemma” of public bodies: Empirical assessment.

Conclusion

This article explored the changing dynamics between bureaucratic structures and quasi-independent agencies in Greece under policy conditionality. Focusing on the reforms of the crisis period (2010–2018), two major policy areas were selected to empirically investigate the implications of the agencification trend: tax administration and state assets management. Two newly established agencies, respectively, IAPR and HCAP, undertook these functions and responsibilities that previously fell within the competence of the central ministerial structures, signifying a critical organizational shift of the domestic administrative system. Agencification has further affected some key features of the policy-making and implementation process, aiming at depoliticizing and improving the effectiveness of public administration. However, several tensions and trade-offs have occurred among different objectives and functions of the new entities, which in our article were defined as the “trilemma” of public bodies. The competing dimensions include the institutional, functional, and democratic components of agencies.

The delegation of policy-making and implementation competences from traditional bureaucratic structures to quasi-independent agencies has been linked with the Wilsonian concept of the politics-administration dichotomy. In the context of policy conditionality, this dichotomy was perceived as a tool for enhancing administrative independence toward political pressures that latently distort the rationality, efficiency, and effectiveness of the bureaucracy. In relation to our first hypothesis, the case of Greece provided evidence that fiscal pressures and the conditionality clause have called for a clearer separation of the political and administrative spheres, especially in policy domains that have been directly linked with fiscal parameters. This sharper divide between politics and administration was largely the result of intense external pressure for depoliticizing particular functions, such as public revenues and state assets management.

As regards the second hypothesis, policy conditionality seems to have changed the character of the domestic pattern of agencification in certain ways: First, the rationale for creating quasi-independent agencies was directly (or solely in some cases) linked with the fiscal constraints and was not embedded in the domestic process of public sector (re)organization. The main goal was to meet the MoUs’ fiscal requirements, which were not part of a broader plan of administrative reform. In addition, agencies’ key features changed, such as the governance methods and accountability criteria. The control and accountability of IAPR and HCAP shifted toward more technocratic standards and acquired a multilevel character, which displaced authority from the national (democratically elected) government to the supranational (EU) institutions. The latter, due to policy conditionality, have the power to intervene in a direct way in (and in a sense “capture”) the domestic political system.

Second, a major shift, which also signifies a critical divergence from the precrisis agencification patterns, has been the involvement of supranational actors in critical internal functions and processes of the IAPR and HCAP, such as management selection and oversight. This form of external involvement and the subsequent accountability to supranational actors portrays a unique characteristic of the two agencies. The observed exceptionalities have broader implications for the domestic agencification pattern, significantly affecting the rationale, performance, control, and accountability of agencies. At the same time, these deviations highly underline the particularity of the Greek case compared with the typical agency model as established in other Western countries.

In a nutshell, the “trilemma” argument was empirically supported by our case studies: on one hand, findings showed that the delegation of powers and competences to quasi-independent agencies has relatively depoliticized the tax revenues collection and state assets management and has largely enhanced the technical efficiency in terms of policy implementation; on the other hand, considerable democratic control and accountability issues of IAPR and HCAP were raised. However, a solid assessment of these reforms requires more time and data, as the experience of IAPR’s and HCAP’s operation covers a very short period of time. Thus, the evidence provided by the analysis is suggestive rather than conclusive, highlighting some indications that confirmed our hypotheses but should be reevaluated in the long-term by further research.

Although the present study focused on two country-specific case studies, the suggested “trilemma” constitutes a general theoretical proposition that could be applied in other agencification cases as well. The conditionality clause adds a specific and unprecedented feature in the puzzle of agencies’ accountability, which in the Greek case tends to acquire a multilevel and multistakeholder character, due to the involvement of the European institutions in the decision-making and the governance of the new agencies. Evidently, the macro-effects of the reforms are not yet clear. Although agencification has strongly affected the domestic process of administrative reform, it remains to be seen whether these reforms will be viable and enhance the consistency and performance of the administrative apparatus in the long run, beyond the economic adjustment programs and the conditionality restrictions.

Footnotes

Acknowledgements

The authors would like to thank the participants of the SOG 2018 Conference “Bureaucracy in Divided Times,” and particularly Professor Martin Lodge and Professor Per Lægreid for their helpful comments and suggestions.

Authors’ Note

A first version of this article was presented at the SOG 2018 Conference “Bureaucracy in Divided Times” June 20 and 21, 2018, University of Potsdam.

Declaration of Conflicting Interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

ORCID iD

Giorgio Oikonomou

Notes

Author Biographies

Manto Lampropoulou is an adjunct lecturer at the National and Kapodistrian University of Athens. She is a graduate of the Greek National School of Public Administration and she works as a staff scientist at the National Center for Public Administration and Local Government. Her research interests focus on public policy, public administration, state reform, privatization, regulation and governance. Her most recent publications include “Policy Responses to the Eurozone Crisis: A Comparative Analysis of Southern European Administrations” in Public Policy and Administration (First Published November 5, 2018); “Theoretical Models of Public Administration and Patterns of State Reform in Greece” in International Review of Administrative Sciences (2018, with G. Oikonomou); and “State-owned enterprises in Greece: The evolution of a paradigm 1996-2016” in Annals of Public and Cooperative Economics (2018).

Giorgio Oikonomou is an adjunct lecturer at the University of the Peloponnese. He holds an MSc degree in public policy and public management from the Athens University of Economics and Business. He graduated from the Greek National School of Public Administration. His research interests include (multi-level) governance, public policy, public administration reform, Europeanization, and subnational mobilization. His most recent publications include “Decentralizing Governance within the European Union’s Framework: Evidence from Greece” in International Journal of Public Administration (2019); “Variations in the Quality of Government within the European Union: A Comparative Approach of Northern and Southern Public Bureaucracies” in European Integration Studies (2019); and “Theoretical Models of Public Administration and Patterns of State Reform in Greece” in International Review of Administrative Sciences (2018, with M. Lampropoulou).

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