Summary of a Paper presented by George Alogoskoufis at the online Harvard/Fletcher Conference on New Perspectives on the Greek Revolution, September 24-25, 2021.

Modern Greece has a history of about two centuries. During these two hundred years, the country and the economy have been radically transformed. 

1. Greece managed to almost triple its national territory, in relation to the first Greek state. 

2. Greece managed to increase its population by almost 15 times.

3. Greece managed to increase its real GDP per capita (living standards) by another 15 times. 

It has managed to move from the margins of south-eastern Europe to the core of today’s European Union, to gradually develop and maintain democratic institutions and to develop a functioning, if somewhat inefficient, state and public administration.

The process was neither deterministic nor inevitable, let alone linear and automatic. It involved leaps forward and steps backward, Sisyphian ups and downs, ’triumphs and disasters’  in wars, national schisms and civil wars, periods of economic progress and stability and periods of instability, major economic crises and national defaults. Yet, in retrospect, the overall progress is impressive on almost all counts, especially when compared with other countries that emerged under similar circumstances.

A first overview of the long-run developments of the Greek economy, based on the evolution of the Greek state, its area and population and real per capita GDP, suggests the existence of three large distinct historical cycles. (See Alogoskoufis (2021), GreeSEPaper no. 158, Hellenic Observatory, London School of Economics).

First, the cycle of state and nation building, 1821-1898, second, the cycle of national expansion and consolidation, 1899-1949 and, third, the cycle of economic and social development, 1950  to the present.

The purpose of this paper is to identify the main characteristics of these three historical cycles and analyse the key drivers of the historical evolution of the state and the economy of modern Greece.

The Evolution of Greece’s Real GDP per capita during the Three Historical Cycles, 1833-2020

1. State and Nation Building, 1821-1898

The first historical cycle covers the period from the struggle for independence and the foundation of the first Greek state until the establishment of the International Financial Audit Commission in 1898. This cycle is characterised by three main achievements: 

1. The creation and the establishment of the first Greek state, 

2 the consolidation of the national consciousness and the adoption of the ‘Great Idea’, and, 

3. the gradual development of constitutional and democratic institutions. 

The state of the economy during this period was rather disappointing. Economic stagnation, fiscal and monetary instability and three sovereign debt ‘defaults’. Dealing with the economy was clearly secondary relative to the other national aspirations, such as the Great Idea and constitutional government.

This cycle ended with Greece in an ‘existential crisis’ following the default of 1893, the defeat in the war of 1897 and the imposition of the International Economic Audit Commission in 1898.

2. National Expansion and Consolidation, 1899-1949

The second historical cycle includes the first half of the 20th century, from economic stabilisation after 1898 to the end of the civil war in 1949. 

The main achievement of this cycle is the realisation of a large part of the ‘great idea ‘, with the great territorial and population expansion of the Greek state and its consolidation. 

Otherwise, there was significant political and economic instability due to the almost constant wars and civil strifes, but also due to the social transformations that accompanied the integration of the new populations and the large number of refugees. Towards the end of this cycle Greece experienced a decade of disasters, following the Triple Occupation of 1941-1944 and the Civil War of 1946-1949.

This cycle ended with the end of Triple Occupation in 1994 and the Civil War in 1949. Greece was integrated into the Western Alliance, that was formed under the leadership of the United States, a development that contributed to its security and future economic prosperity during the following cycle.

Evolution of the Area and Population of the Greek State, 1833-2020

3. Economic and Social Development, 1950-2020

The third historical cycle begins after the end of the civil war in 1949 and continues to this day. Its three main achievements are 

1. the growth ‘miracle’ of the period 1953-1973, 

2. the democratic and social ‘miracle’ of the post-1974 period, after the restoration of democracy in 1974 and national reconciliation, and the development of a welfare state, 

3. the integration of Greece in the European Union in 1981 and the gradual adoption of its institutions and policies. 

Its negatives include the dictatorship of 1967 and the significant economic slowdown after entry to the European Union.

Key Achievements and Failures During the Three Historical Cycles

Key Drivers of the Greek Economy Since 1821

In order to analyse, interpret and contrast the three historical cycles of the Greek state and the economy of modern Greece, this paper focuses on the interdependence of ideas, social and economic conditions, the political and economic institutions through which state policy was implemented, the geopolitical circumstances and international economic developments and institutions, which affected the Greek economy.

It is through the dynamic interactions of such forces that the key developments were determined. A summary of the main drivers of the Greek state and the Greek economy during each of the three historical cycles is contained in the following Table.

The Key Drivers of the Greek State and Economy during the Three Historical Cycles

Tentative Conclusions

This paper has presented an overview and interpretation of the evolution of the state and the economy of modern Greece, based on the examination of the interactions of 

1. ideas

2. social and economic conditions, 

3. political and economic institutions and policies, 

4. geopolitical circumstances

5. international economic circumstances

The analysis ultimately leads to an optimistic message: 

Despite its difficulties and weaknesses, the alternation of national triumphs with national disasters, despite wars and national ‘schisms’ and economic crises, in each of these three historical cycles Greece has managed to make relatively good use of the opportunities that presented themselves and the geopolitical and international economic circumstances to largely achieve its national goals.

What is needed for the future is to improve upon the level of prosperity it has secured during its third historic cycle, through reforms that will protect democracy, improve the economy and shield its membership of the European Union.


This article is an extension and summary of ongoing research reported in,

Historical Cycles of the Economy of Modern Greece: From 1821 to the Present,Working Paper no. 1-2021, Department of Economics, Athens University of Economics and Business.


Historical Cycles of the Economy of Modern Greece from 1821 to the Present, GreeSE Paper no. 158, Hellenic Observatory, London School of Economics.