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From the Southern-European model to nowhere: the evolution of Italian capitalism, 1976–2011

Before the 1980s Italy had the typical institutional configuration of Southern European capitalism: an important role for the state in controlling production activities and markets; limited social security; and high employment protection. In the last 30 years, Italian capitalism underwent a process of institutional change moving away from this configuration. The deepest reforms occurred in the 1990s and aimed to achieve a more market-oriented economy to cope with European market integration. Reforms, however, did not succeed in moving the economy towards a ‘liberal market economy’: they simply increased laissez-faire without achieving better co-ordination through markets, leaving Italy with an inefficient model.