ABSTRACT
This chapter applies a historical institutionalist perspective to the study of the macroeconomic stabilization that Italy went through in the run-up to the Economic and Monetary Union (EMU), from roughly 1991 to 1997. The chapter reviews the theories of successful fiscal consolidation and provides a primer for the historical institutionalist perspective on macroeconomic regimes proposed here. It applies this perspective to the study of Italy's fiscal consolidation in the 1990s, focusing on the importance that monetary policy reform eventually had on the form and direction of the country's fiscal regime and on interlinkages with other reform areas. It is argued that the macroeconomic regime change of the 1980s, whilst initiated by political elites, led to changing socioeconomic interests and preferences that could be reconciled effectively under the fiscal-discipline agenda of the 1990s. The chapter uses the historical institutionalist perspective to assess Italy's performance under the EMU.
