Conditionality lending vs performance-based budgeting: lessons from public sector reform in Greece

The seminar by Angelos Angelou presented joint research with Stella Ladi (QMUL & Panteion) and Dimitris Tsarouhas (Virginia Tech) examining whether the EU’s Recovery and Resilience Facility (RRF) has improved the implementation of structural reforms across member states.

The article discusses the drivers that render performance-based budgeting more efficient to conditionality-based lending vis-a-vis reform completion in the public sector. Conditionality has been a feature of EU policy until the 1990s and came at its peak during the Eurozone crisis. Although a lot has been achieved via this tool, there has also been criticism in relation to the design (ownership of the reforms), the impact and viability of the reforms. Performance-budgeting was introduced as an alternative for the implementation of the RRF and the design of the NRRPs. Leveraging the case of Greece ,which has thorough experience of both conditionality-based lending (via the three Economic Adjustment Programmes) and of performance-based budgeting (via its large NRRP), we discuss the drivers that might render performance-based budgeting more effective compared to conditionality-based lending. As such, we conduct a comparison between a reform that was included in both the EaPs and the NRRP but was never implemented (justice system reform) with a reform that was part of the EaPs and of the NRRP but was implemented only during the latter (anti-corruption via digital tools). The article offers insights with respect to the political economy of reforms in states that are long-term reform laggards, while also discussing the conditions that lead to successful public sector reforms under different EU financing instruments.

Meet our speaker and chair

Angelos Angelou is Assistant Professor of European Political and Economic Governance in the Department of International, European and Regional Studies at Panteion University of Social and Political Sciences. He is also a visiting fellow at the European Institute of the London School of Economics (LSE), where he obtained his PhD.

Professor Vassilis Monastiriotis is Director of the LSE Centre for Research on Contemporary Greece and Cyprus - Hellenic Observatory, Professor in Political Economy and Eleftherios Venizelos Chair of Contemporary Greek Studies at the European Institute, LSE.

The Hellenic Observatory (@HO_LSE) is internationally recognised as one of the premier research centres on contemporary Greece and Cyprus. It engages in a range of activities, including developing and supporting academic and policy-related research; organisation of conferences, seminars and workshops; academic exchange through visiting fellowships and internships; as well as teaching at the graduate level through LSE's European Institute.

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LSE holds a wide range of events, covering many of the most controversial issues of the day, and speakers at our events may express views that cause offence. The views expressed by speakers at LSE events do not reflect the position or views of the London School of Economics and Political Science.