The Italian State

August 31, 2004

The universal demand for governance

Required to provide public goods that individuals are otherwise not motivated to provide

Private goods Public goods

The problem of motivation

The free-rider problem and social order

Types of governance units

Local Governance Units– Tribes– Clans– City-states – esp. in north, central Italy

Territorially Extensive Governance Units– Empires– The modern bureaucratic state

Extensive governance: direct and indirect rule

Direct/indirect rule– Scope (quantity/quality of public goods provided by

central authorities)– Penetration (control capacity of center, as against

local/regional authorities)

Initial source of direct rule

Advances in communications technology enable central rulers to extend their control over distant territories, taking power from local rulers– The French Revolution (1789)– The American Civil War (1865)– German and Italian unification (1870)

Preindustrial society

A ‘moral economy’ – Limits risk of loss due to climate, confiscation– Limits exploitation by landowners

‘traditional’ domination

No large-scale collective action– Grievance aplenty, but peasants are highly

dependent on landowners with great control capacity

Effects of technology and urbanization

Major new sources of uncertainty– Market society macroeconomic fluctuations

unemployment No safety net

– Urbanization risk of disease Poor sanitation, public health, etc.

Uncertainty insurance groups

Insurance reduces uncertainty Health, unemployment, and burial insurance (mutual

benefit associations, religious groups) Existential security (religious groups) Security for acquisition of firm-specific skills

Insurance groups trade unions

One of the principal sources of organization among the working class

Working-class organization increased direct rule

3 types of direct rule (welfare) states– 1. Top down

Bismarck (1881) seeks to contain working-class politics by providing workers with social insurance;

Fascist states (incl. Italy) follow this lead Oil states (Saudi Arabia and Persian Gulf states) – welfare

without economic development

– 2. The Communist state – 3. Bottom up

3 types of (bottom-up) welfare states

Social democratic (Nordic countries)– Aims at universal benefits at a high standard– Workers have same rights as middle class

Liberal welfare state (US, Canada Australia) Means-tested assistance Modest benefits poor and working class

Christian Democratic (postwar Italy, Austria, Germany)– Subsidiarity: state only interferes when family’s capacity to

provide benefits is exhausted

General Government Expenditures on Social Services as % of GDP

0

5

10

15

20

25

30

35

40

1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990

Year

Per

cent

age

Denmark

Finland

Germany

Ireland

Norway

Sweden

Switzerland

United Kingdom

United States

Japan

Direct rule and class politics

Central authorities take on obligation of providing insurance and welfare from unions, political parties, local authorities – Weakens these organizations– Weakens class ideology– Weakens class consciousness– Thus: weakens class politics

Direct rule and cultural politics

Welfare state provides public goods for median (culturally dominant) voter

As state scope increases, some demands of cultural minorities not met

This stimulates cultural politics– demand for relief from dependence on political

center Nationalism, religious fundamentalism, etc.

Effects of subsidiarity

Christian Democratic welfare state places greater reliance on church and family for some welfare benefits– Strengthens these institutions, not class-based

organizations– Result: increases cultural rather than class bases of

identification and politics

Example in Italy

The Lega Nord

Social consequences of the Italian welfare state

Public discourse gender relations

Welfare state

Definition: a set of institutions and policies which redistribute resources – either as money transfers or as free or subsidized services – between individuals and across different groups.

Present day Italy

Italy’s welfare state is centered mainly on the pension system, which accounts for 64% of overall social spending (compared with 46% in the EU).

The other main items of expenditure are heathcare/sickness/disability (30% of welfare expenditure vs.EU 35%); unemployment (2% vs. EU 7%); family/children (3.8% vs EU 8%); housing (0.2% vs EU 4%).

Italian welfare, cont.

Social contributions weigh most heavily on employers (43% of total expenditure vs. EU 38%) followed by public contributions (39% vs. 36%), while individual employees’ social contributions amount to 14% (EU 23%).

In Italy as in the rest of EU, the share of financial resources allocated to social policies expressed as a percentage of GDP has decreased slightly (25% now).

Italian welfare state, cont.

Of the EU states, Italy is the one with the most rapidly aging population. Demographic decline is due less to increased life expectancy than to the fall in the fertility rate (1.25 children per woman). “Demographic gulf”

Welfare reform proposals

Support for families– Family is recognized as core of welfare system –

institute tax system which recognizes costs of upbringing and care of children. (Purpose: to revive birth rate)

– Work re entry after interruption for childbirth should be promoted by offering training or retraining courses to women on maternity leave.

– Access to credit for first time home purchase.

Welfare reform proposals

Support for children and young people– Public and private supply of day nurseries; open day

nurseries in workplaces.

– Promote foster care

Welfare reform proposals

Social inclusion– Replace system of income support – to one

managed and cofinanced by regional and local system.

Disability– People with disabilities who are not self-sufficient

should be encouraged to live with their families by developing new forms of financial support.

Welfare reform proposals

Social cohesion and voluntary work– Protection of non profits (working in social utility)

– Social service information system

Reactions to reforms

SME confederation: positive, welcomes the fact that “it places the family at the core of the social protection system”

Trade unions: mixed Scholarly analysis: “The danger is that, as the

state withdraws, excessive responsibility will be placed on the family, which will receive greater economic support but will also be burdened with greater care commitments.”

Gender and the welfare state

Development of the welfare state runs parallel with women’s entrance into the labor market.

Welfare state contributed to reshaping women’s role, to changing the traditional division of labor within and outside the family, and affected gender relations between men and women

Gender and the welfare state in Italy

From E. Addis, Universita’ di Roma

1. WS allows women’s participation in the labor market and is an important source of women’s employment. Italy is an extreme case in that women’s lfp is much lower than in countries with similar per capita income (43 vs. 75) (US 71 vs. 84)

2. Main source of women’s employment – in service sector – is underdeveloped.

Gender, cont.

3. Original “handicap-privileges”– Long mandatory maternity leave (5 months mandatory at

80% pay at birth plus six months elective at 20% of the wage within the first two years)

– Mandatory retirement age set at 55 for women in the private sector, which prevent the employment of older women willing to reenter the labor force after childbearing. (This provision was abolished.)

– Weekly working hours mandated by national labor contract in the private sector are long, and other forms of shorter time commitment to employment are strongly penalized.

Gender, cont.

4. Given the standard of living that a woman enjoys, she may have more or less control over the resources that make the standard possible. (wealth, earnings, state transfer, family transfer) Creates dependence on the family.

Gender, cont.

5. Direct monetary transfers in the welfare state are job-based to an extreme:

– Family allowances paid to workers for spouse and children

– Unemployment transfers– Pensions. Paid to the disabled, survivors of a

worker, or paid contributions (seniority and retirement pensions).

Gender, cont.

6. Welfare state overprovides transfers and underprovides services. Large amount of work to do, women at home to do it. Generosity of the pension system means that many are relatively young. Customary in Italy to hire domestic workers, often immigrants.

7. Lack of any specific program to help mothers or single mothers contribute to induce a low fertility rate.

Conclusion

Even though the welfare state represents an increase in direct rule at the expense of local units, the peculiar form of the Italian welfare state has reinforced the primacy of the family in providing social order in this society.