Thursday, July 24, 2014
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Normalizing Italy

LONDON – Italy’s political exceptionalism – its chronic inability to marshal coherent governments backed by stable parliamentary majorities – is weakening Europe and threatening the eurozone’s survival. More than electoral reform is needed: Italy requires comprehensive institutional renewal.

Italy’s particular characteristics put its political system and institutional framework at odds with other democracies, and expose the challenges that it faces in becoming a “normal” country. Indeed, these features have made it difficult to produce from a disparate coalition of political forces and interest groups a government that is greater than the sum of its parts.

First, complex structural reforms have been carried out mainly at the initiative of technocratic governments, such as Prime Minister Mario Monti’s current administration. The governments of Carlo Azeglio Ciampi in 1993 and Lamberto Dini in 1995 implemented significant labor-market and pension reforms, respectively. But elected governments, even those with a large parliamentary majority, such as the last cabinet, led by Silvio Berlusconi, have repeatedly failed to deliver major structural reforms.

Second, Italian politics has long been dominated by “career” politicians who have transformed public service into a lucrative profession. Vested interests often prevail over the public good, and corruption abounds. According to the journalists Marco Travaglio and Peter Gomez, 70 of the 945 members of parliament who were elected in 2008 are under criminal investigation or face pending charges.

Moreover, Italy’s political elites are deeply entrenched, resulting in little turnover at the top. Many members of both houses of parliament have served several terms. If Berlusconi contests the next general election, as he has indicated he will, he will gain his sixth term as an MP since 1994.

Indeed, Italy has become a country for old men. Monti is 69; Berlusconi was 75 when he stepped down in November last year; and none of the possible candidates for Prime Minister is younger than 60. MPs under 40 account for only 7% of the Chamber of Deputies. And women comprise just one-fifth of parliament and 15% of the current cabinet.

Third, as citizens react to endemic corruption by rejecting traditional political parties, demagogues’ popularity grows. Both Berlusconi and Umberto Bossi, the former leader of the Northern League, began their political careers by pushing agendas that combined populism, corporatism, and euro-skepticism with anti-government sentiment. More recently, the former comedian Beppe Grillo led the populist, anti-corruption Five Star Movement to remarkable results in local elections, and promises a similar, if not better, performance in next year’s general election.

Fourth, the conflicts of interest that plagued Berlusconi for nearly 20 years remain unresolved. Unlike other democracies, Italy does not have firewalls in place to prevent elected officials from pursuing their private interests. As a result, the door remains open to those who view public service as a path to personal gain.

Finally, while highly capable and respected men and women represent Italy in multilateral and other international organizations, with few exceptions, the country’s finest talents do not sit in parliament. Rather, Italy’s political elite is parochial and inward-looking, with little international exposure and experience. In today’s globalized world, this is not only peculiar; it also reduces the country’s global relevance.

Italy’s political exceptionalism results from the gradual decay of the country’s institutional framework. In the early 1990’s, after Italian magistrates’ nationwide mani pulite (“clean hands”) campaign exposed systemic clientelism, corruption, and mismanagement of public finances among the country’s established political parties, Berlusconi’s political agenda blocked attempts to spearhead institutional renewal. As a result, public debt rose from 60% of GDP in 1981 to 120% in 1995, and remains well above 100%.

Meanwhile, income inequality has worsened, while Italian firms have become less competitive in global export markets. Italy has the sixth-largest gap between rich and poor among the 34 OECD countries. And, in the last two decades, Italy’s GDP has grown at an anemic 1% annual rate.

The process of renewal that began 20 years ago must be revived in order to pull Italy back from the brink of economic collapse. But disrupting the status quo might entail considerable political instability. At a time when reducing uncertainty and strengthening market confidence are high priorities across Europe, this may not be a palatable option. Thus, the threat of instability could perpetuate Italy’s inertia.

Monti’s technocratic government has shown that Italy can behave like a normal country. Italy’s European partners must encourage, rather than block, the country’s efforts to break with its past. To the extent that resolving the eurozone crisis requires a credible commitment to fiscal sustainability, Europe needs Italy to be an institutionally sound and trustworthy partner.

Read more from our "Italian Ice" Focal Point.

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  1. CommentedJules Pierre

    Well, most of these problems are not specific to Italy. Populism and corruption (under its various forms) are a serious problem for many western democraties. Likewise, only in the US can non-politicians quickly become first-class political players, yet this is partly because politics depends on big money much more. And parliaments are old everywhere...

    Italy might be one of the worst occidental countries regarding those issues, the others are not much better. If Italy wants to renew its political system, normalization is an unambitious target ; in the current context any country can hope to become an example for occidental democraties.

  2. CommentedJules Pierre

    Well, most of these problems are not specific to Italy. Populism and corruption (under its various forms) are a serious problem for many western democraties. Likewise, only in the US can non-politicians quickly become first-class political players, yet this is partly because politics depends on big money much more. And parliaments are old everywhere...

    Italy might be one of the worst occidental countries regarding those issues, the others are not much better. If Italy wants to renew its political system, normalization is an unambitious target ; in the current context any country can hope to become an example for occidental democraties.

  3. CommentedPaolo Magrassi

    True. However the "normal country" slogan (launched in Italy about 10 years ago) sounds somewhat provincial when uttered in English. All countries are "exceptional": in the the US, one single family can occupy the White House for a decade or longer, 95% of senators get re-elected, and half the federal budget is spent in weapons; in Japan, government debt is twice the one in Italy, the economy stagnates since the 1990's, and there exists a flourishing mafia; in Switzerland, a much respectable civilization and a healthy nation, criminals from around the world store illegal money; ...

      CommentedPaolo Magrassi

      Of course accounting is not an exact science, for much depends on which items one attributes costs and revenues to. In the case at hand, in addition to R&D and dedicated health care, also think energy, infrastructures, education... At any rate, the point of my comment was that a Country spending in weapons more than all others combined is no less «politically exceptional» than Italy, which the author describes as unique monster. (I'm saying this with all my love for the USofA, second home).

      CommentedMoritz G€d1g

      (off-topic)
      Checking your statement I found that it is shockingly true.
      There are payments that are tied to the military to varying degree, that are not listed under the military budget. The medical support of veterans is listed extra, as social spending (probably politically motivated). Many research expenditures are militarily motivated (dual-use).

      CommentedPaolo Magrassi

      Yes Moritz, that was a typo due to my confused inline post-editing (meant half the world's military expense is US). Thanks.

      CommentedMoritz G€d1g

      "half the federal budget is spent on weapons"
      I am sure that there is indirect spending that does not show in the superficial pie-charts, but that statement might be in conflict with reality.

  4. CommentedKofi Jackson

    Italy should sell South Tyrol back to Austria and fundamentally reorganize its territory. In a unified Europe you do not need a disparate unbalanced Italian nation state. Czech and Slovakians show how to benefit from split-up. Germany and Italy are caught in the national unity trap while the times are changing quickly and require a different organisational strategy.

  5. CommentedEsteban Martina

    I agree with the article. However I think that the actual political exceptionalism has existed since Italian "unification" in 1861. Italy continues to be an idea that only foreigners think exist in reality. The naked truth is that the unification was a conquest by the richer regions leaded by Piedmont which had no lofty expectations but wanted a market for its products and become an European power. This produced such an upheaval that Italy still suffers its consequences. When a precarious equilibrium among the different regions and groups of power was reached in the late XIX century, the imperial ambitions of the governing clique lead to the disaster of I WW, the fascism and the II WW. The Republic that emerged from the chaos was , again, structurally crippled. France solved a similar problem with the V Republic but Italy is still in the hands of "career"politicians which more than anything are parasites of the Italian society.

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