Notes on a Peripheral Economy

This chapter provides some brief, informal notes about Portugal’s modern economic history since the 1974 Revolution, as it looks to an outsider observer. Not to be too coy about it, Portugal has done better than many feared but not quite as well as many hoped. There is, however, an asymmetry between the good news and the bad news. Portugal can claim much of the credit for the gratifying resilience of its late commitment to democracy, avoiding economic catastrophe and generally responsible policies. The disappointments, on the other hand, have had a lot to do with outside forces, such as the euro’s structural flaws and, since the 1980s, the underlying forces causing trouble for peripheral regions in all advanced economies. Indeed, Portugal achieved only limited convergence on wealthier European nations and is still vulnerable to macroeconomic crisis. Relative to the grim prospects in 1975, however, Portugal has to be considered a major success story.