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Why Is I taly Doing So Badly?
Author(s) -
Pelloni Gianluigi,
Savioli Marco
Publication year - 2015
Publication title -
economic affairs
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.24
H-Index - 18
eISSN - 1468-0270
pISSN - 0265-0665
DOI - 10.1111/ecaf.12136
Subject(s) - restructuring , collective action , economic stagnation , action (physics) , civil society , economics , political economy , political science , creative destruction , economic system , development economics , market economy , law , politics , physics , quantum mechanics
We analyse the current Italian economic crisis as a phase of a major systemic decline. We argue that ‘ I taly'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.