The Political Economy of Portugal

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Inter-American Development Bank


We aim to analyze the political and economic institutional aspects that have held Portugal back from sustaining long-term economic growth and keeping pace with its European counterparts. Why did belonging to the European Union provide positive economic policy outcome in the short run only? How do political institutions contribute to this relatively feeble current economic performance? What are the economic constraints to a more rapid pace of economic growth? Why were the Portuguese political players not able to cooperate inter-temporally? If Portuguese economic institutions are required to be reformed in order to facilitate economic growth, why do politicians not work together to achieve this desired outcome? What is needed, in terms of public policies, to enhance growth? These are the main puzzles that this research paper will address.

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