Why is Italy Doing so Badly?

17 Pages Posted: 28 Oct 2015

See all articles by Gianluigi Pelloni

Gianluigi Pelloni

University of Bologna - School of Economics, Management, and Statistics

Marco Savioli

University of Salento - Department of Economics and Mathematics and Statistics; Department of Economics, University of Bologna; University of Bologna - Rimini Center for Economic Analysis (RCEA)

Date Written: October 2015

Abstract

We analyse the current Italian economic crisis as a phase of a major systemic decline. We argue that ‘Italy's system’ has forced the country to abandon a dynamic view of comparative advantage, crucial for sustained economic growth, in favour of a static view of specialisation. Creative destruction has been hampered and sectoral restructuring has not occurred, resulting in stagnation. The roots of this decline lie in collective action issues and an implicit contract between elites and civil society. We suggest that these issues must be resolved if the Italian economy and society are to revive.

Keywords: collective action, comparative advantage, Italy, sustained growth

JEL Classification: O52, O00, N14, D70

Suggested Citation

Pelloni, Gianluigi and Savioli, Marco, Why is Italy Doing so Badly? (October 2015). Economic Affairs, Vol. 35, Issue 3, pp. 349-365, 2015, Available at SSRN: https://ssrn.com/abstract=2681397 or http://dx.doi.org/10.1111/ecaf.12136

Gianluigi Pelloni (Contact Author)

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, 47100
Italy

Marco Savioli

University of Salento - Department of Economics and Mathematics and Statistics ( email )

Piazza Tancredi, n7
Lecce, 73100
Italy

Department of Economics, University of Bologna ( email )

Via Angherà 22
RIMINI, RN 47921
Italy

HOME PAGE: http://sites.google.com/site/msavioli/

University of Bologna - Rimini Center for Economic Analysis (RCEA) ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

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