Clientelism and growth: what Fukuyama's Greece and Italy teach Spain, with the data

Miriam González, who launched Democracia 21 on 10 October, puts a striking claim at the centre of her clean-up agenda. In a summary of her ideas that the Rafael del Pino Foundation published the day before the launch, she argues that every party behaves the same way once in power, placing its own people, that this is how clientelist networks grow, and that without breaking them it is impossible to reform the economy. It is an economic argument about institutions, and it can be tested. Political science and the Bank of Spain both have a lot to say about it.

What Fukuyama saw in Greece and Italy

Francis Fukuyama's Political Order and Political Decay, which we explain here, gives the historical mechanism. Clientelism means trading public jobs, contracts and favours for votes and loyalty. Fukuyama argues that it takes root when democracy arrives before a professional civil service exists. Parties competing for mass votes find that public employment is the most valuable thing they can offer, and they offer it. Germany built its bureaucracy first and kept it largely clean. Greece and Italy democratised first, and both developed clientelistic politics that has proved hard to dislodge. As Branko Milanovic's review puts it, Fukuyama's comparison runs between Germany, with democracy after the civil service, and Italy and Greece, the reverse.

The cost is easy to describe. When jobs and contracts go to the connected, competence becomes optional, decisions follow loyalty and public money buys support. Every business that needs a permit, a contract or a court ruling pays for that in time and uncertainty.

What the numbers say about Spain

Spain sits in a middle position, and it has been slipping. In its Annual Report 2024, published in 2025, the Bank of Spain devoted a box to institutional quality and productivity. Its finding is that institutional quality in Spain has deteriorated since the mid-2000s and that this could affect the country's capacity to grow. On 2020 data Spain ranked 19th of the 32 countries studied, at a similar level to France, ahead of Italy and Portugal and behind Germany, and it had the fifth-largest drop in the main indicator. Most of the decline came from control of corruption, voice and accountability, and the rule of law.

The bank then estimates what institutions are worth. A one-standard-deviation improvement in institutional quality is associated with 3.4% higher cumulative productivity growth over the following five years on one indicator, and 9.6% on another. If Spain reached Denmark's level, productivity growth over five years could be 5.5% higher, or 19% on the second measure. The authors are careful to say that their results do not necessarily prove causation. The direction is clear all the same, and the magnitudes are large for an economy whose central problem is low productivity.

Perceptions point the same way. The European Commission's 2025 Rule of Law Report on Spain records that experts, citizens and businesses see corruption in the public sector as relatively high. In the Eurobarometer it cites, 89% of Spaniards think corruption is widespread, against an EU average of 69%, and 40% of Spanish firms believe corruption has prevented them from winning a public tender, against 25% across the EU.

The regional picture, and why careers matter

Spain's regions administer health, education and much else, so the most useful data are regional. The European Quality of Government Index, run by the University of Gothenburg's Quality of Government Institute and originally funded by the European Commission, surveyed citizens across 210 European regions in its 2024 round. Scores are standardised so that the EU regional mean is zero. Spain's spread is wide: Cantabria scores 0.62, Madrid 0.34, the Basque Country 0.05, Catalonia -0.23, Andalusia and Extremadura -0.76, and Castilla y León -1.24, which places it among the lowest fifth of European regions. Taking the simple average of each country's regions ourselves, Spain comes out at about -0.15, close to the European mean, while Italy is at about -0.64 and Greece at about -0.81. Denmark is at about 1.83. Fukuyama's pattern is visible, and so is the room Spain has to improve.

The most practical evidence concerns careers. In a study published in the Journal of Politics in 2017, Nicholas Charron, Carl Dahlström, Mihály Fazekas and Víctor Lapuente combined a survey of about 18,000 public employees in 212 European regions with 1.4 million public procurement contracts. They found that corruption risks are lower where officials' careers depend on their peers and on merit rather than on political connections. They estimate that bringing European regions up to the level of meritocracy of Baden-Württemberg could save between 13 and 20 billion euros a year.

A radical-centre response

This is where the traditions meet. The left has long argued that public power must be protected from capture by private networks and party machines, and that clientelism is a tax on the people without connections. The right and the market-liberal tradition argue that merit, competition and efficient spending are the conditions for growth. Both are right, and the research above shows they are describing the same problem from two sides.

The element that belongs to neither camp is institutional design that can be measured. We would make three commitments, each of which can be checked. Every public career, from a regional health service to a state-owned company, should depend on open competition and on evaluation by professional peers, with political appointments limited to a small, published list. Spain should publish a quality-of-government indicator for every autonomous community every two years, using the European index or a compatible survey, and debate it in each regional parliament the way it debates unemployment or the deficit. And the regions at the bottom should be able to copy the practices of the regions at the top, Cantabria's included, with funding tied to adopting them.

Donald Warren's middle-income radicals, whom we met last week, distrusted concentrations of power in government and business alike. Clientelism is one of those concentrations. González is right to treat it as a brake on growth. The way to release it is to make merit the rule everywhere parties can reach, and to measure the result in public.