ABSTRACT
Italian officials repeatedly assert that Italy has little or no industrial policy if this be taken to mean consistently promoting, protecting, or shrinking particular sectors as is done in France, Germany, or Britain. Italy has had an extensive regional policy. Since the 1950s, Italy has promoted private investment in the South through investment grants, low interest loans and tax breaks, and has required state owned companies to invest in the South. Italy also had a tradition of using state-owned industries, banks, and services to serve the macro-economic goal of maintaining aggregate investment activity during recessions. Despite the intervention tool kit at the disposal of the Italian government, some argue that Italy is one of the more laissez-faire economies in the West. Italian unions, although traditionally more class-conscious and unyielding in wage bargaining are generally considered to have behaved in a way conducive to efficiency and productivity increases.
