Excesses and limits of the public sector in the Italian economy

This chapter examines the substantial degree of public intervention in the Italian economy, and considers the internal contradictions and weaknesses of public action in this sphere. New policy initiatives directed at resolving the country’s long-term structural problems are then discussed, including the privatisation programme which was launched in 1992 together with the major budgetary cuts aimed at curbing public debt in order to maintain sustainability. Finally, the chapter tries to explain why, despite all the excesses and limits of the policy-making process, the performance of the Italian economy is none the less quite impressive. The conclusions follow from those developed in an earlier study of the contemporary Italian economy (Padoa Schioppa Kostoris 1993).