The London School of Economics and Political Science National institutional contexts and domestic discourse during proposed transformative policy change. The case of telecoms' privatization in Greece and the Republic of Ireland. Christos Dimas A thesis submitted to the European Institute of the London School of Economics for the degree of Doctor of Philosophy, London, October 2009. 1 UMI Number: U511576 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U511576 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 r Uorarn a**L & » V d'Pr"'" ' 0 ^ W J ; Sc*™** _J Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without the prior written consent of the author. I warrant that this authorization does not, to the best of my belief, infringe the rights of any third party. 2 Abstract This thesis attempts to unravel the relationship between the national institutional contexts on the one hand, and the forms of the domestic discourse on the other and analyze how that in turn affects the overall policy-making process, in terms of ideas promoted, applied and rejected, during proposed transformative policy change. It maps the pattern linking a nation’s institutional arrangement and its discursive process. Such an approach is valuable as it illustrates why and how the diverse institutional contexts of different countries shape the way transformative changes are publicly legitimized within the policy-making process. It tests the theory of discursive institutionalism, as defined by Vivien Schmidt, by examining the nature of the telecoms privatization discourse in Greece and the Republic of Ireland. This is carried out through a qualitative analysis of primary sources including newspapers, parliamentary archives, documentations of political foundations, manifestos of political parties, press releases by labour unions and industrialist confederations and personal interviews. The goal is to attribute a particular type of discourse depending on the institutional settings within which it takes place. The argument put forward is the following: in simple polities -like Greece- privatization is justified principally on a pro-market ideological basis or an expressed strategic objective. In compound polities -like Ireland- privatization is presented as a socially acceptable managerial adjustment to market needs with minimum references to ideology or strategic objectives. The examination of the privatization discourse exemplifies the various complex issues entailed within the political process of a polity when dealing with transformative changes. It has important implications not only for the two countries under investigation or privatization politics but even for other societies facing large-scale transformative changes as it provides guidance on how the pathways for legitimizing such changes are likely to differ according to the different institutional contexts. 3 Acknowledgements I would like to thank: My academic supervisor Professor Kevin Featherstone, not only because he was always accessible and there for me when I needed him, but mainly for his psychological support when things were heading towards the wrong direction. My advisor Dr Eiko Thielemann for all of the time he spent reading and re-reading numerous drafts but always coming up with good comments and giving me courage to continue. The Alexander S. Onassis Public Benefit Foundationfor its invaluable support throughout the years. My parents, as nothing would have been possible without them. My sister Antigone and my brother Costas for standing by me and their overall support throughout my studies. Mr loannis Palaiokrassas, because in a moment of panic, he was there to save the day. The Constantine Mitsotakis Foundation for its excellent studying environment and because it gives students the opportunity to access important files instantly without bureaucratic delays. Professor Theodore Kouloumbis, Dr Bob Hancke, Dr Mark Thatcher, Dr Giorgos Pagoulatos, Dr Sotiria Theodoropoulou and Dr Andreas Antoniades for the time each of them spent, in order to give me helpful advice. All of my friends but especially: Ellie, Costas and Avgoustinos for their patience, tolerance and hospitality. Mr Konstantin Kostopoulos for his kindness to help me find access to some of the data which was much needed. 4 To my mother Alkistis and my father Stavros 5 Table of Contents A. Declaration B. Abstract C. Acknowledgments D. Table of Contents E. Table of Figures F. Abbreviations Chapter 1: Discursive Institutionalism and Transformative Policy Changes like Privatization 1. Purpose of chapter 1.1 Introduction 1.2 Privatization, national institutional contexts and particular types of discourse 1.3 Hypothesis 1.4 Dependent variable: Arguments in the discourse as a means to legitimate privatization 1.4.1 Ideological grounds 1.4.2 Strategic reasons: Financial motives and EU constraints 1.4.3 Financial reasons 1.4.4 EU as a perceived constraint 1.4.5 Managerial adjustment to market needs 1.5 Privatization politics: actors, strategies and methods 1.5.1 Privatization actors 1.5.2 Privatization Strategies 1.5.3 Privatization methods 1.6 Sector selection: telecoms 1.7 New Institutionalism 1.8 Discursive institutionalism as a theoretical framework 1.9 Contribution, Methodology and possible different approaches 1.10 Conclusion Chapter 2: Ireland and Greece: Two Most Similar Cases in the ‘80s with Different Outcomes in the ‘90s 2. Purpose of Chapter 2.1 Justifying the selection of the time-frame 6 2.2 Ireland and Greece: Parallel paths in the 1980s 2.3 Ideological standings of Irish political parties 2.4 Ideological standings of Greek political parties 2.5 Political and economic mismanagement in Ireland 2.6 Political and economic mismanagement in Greece 2.7 Conclusion Chapter 3: Ireland 1987-1992. from Simple to Compound Polity 3. Introduction 3.1 The run-up to the 1987 elections: Privatization and neo-liberalism on the agenda 3.2 Institutional metamorphosis in Ireland: from simple to compound polity 3.3 Telecom Eireann (TE) during the ‘Smurfit years’ (1983-1991) and privatization 3.4 First privatizations 3.5 From Haughey to Reynolds 3.6 Conclusion Chapter 4: Greece 1990-1993: Privatization in the Name of European Integration 4. Introduction 4.1 Lack of a coordinative privatization discourse 4.2 Communicative privatization discourse 4.3 Failing to privatize OTE 4.4 OTE privatization politics 4.5 Conclusion Chapter 5: Ireland 1992-1997. TE’s Privatization as an Adjustment to the Market Needs 5. Introduction 5.1 The pro and anti-privatization agenda in the 1992 elections 5.2 TE’s alleged strategic alliance 5.3 Forming the ‘Rainbow Coalition’ and agreeing on the TE strategic alliance 5.4 TE’s privatization 5.5 Conclusion 7 Chapter 6: PASOK’s Europeanization and the Unsuccessful Attempts to Privatize OTE 6. Introduction 6.1 PASOK’s adjustment to Europeanization 6.2 Setting the government agenda and (re)adjusting it to the EU requirements 6.3 Failing to privatize OTE again and again 6.4 Conclusion Chapter 7: Ireland 1997-2000. Social Actors Requesting More Rather than Less TE Privatization 7. Introduction 7.1 The pattern of the privatization discourse in the 1997 electoral campaign 7.2 The FF-PD coalition and the agreement on the TE privatization 7.3 Privatization of TE, part II 7.4 Conclusion Chapter 8: Greece 1996-2000 Privatizing in the Run-up to EMU 8. Introduction 8.1 The strategic objective of EMU membership and the first OTE privatization 8.2 Increasing the privatization pace, aiming at EMU participation 8.3 Privatization as a tool to achieve EMU participation 8.4 Conclusion Chapter 9: Conclusions 9. Thesis purpose 9.1 Testing discursive institutionalism 9.2 Testing the hypothesis 9.2.1 Simple polity (Greece): Gathering privatization momentum from Europe 9.2.2 Compound polity (Ireland): Privatization as a managerial adjustment to market needs 9.2.3 Conclusion of the empirical findings 9.3 Recent developments in Greece and Ireland 9.4 Discourse analysis and comparative politics 9.5 Conclusion 8 X. Bibliographical References Appendix 1 Personal Interviews Table of Figures Chapter 1 1.1 Arenas-Fora Continuum 1.2 Governance Practices in Simple and Compound Polities 1.3 Coordinative & Communicative Discourse in Simple & Compound Polities 1.4 1st part of hypothesis: simple polities 1.5 2nd part of hypothesis: compound polities 1.6 EU Member States: Privatization Methods in Telecoms (1984-2000) 1.7 Telecom Privatization Revenues among EU Member States (1984-2000) Chapter 2 2.1 GDP Growth Rate 2.2 Unemployment Rate by