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The next Economic Survey of Italy will be prepared for 2011.
An Economic Survey is published every 1½-2 years for each OECD country. Read more about how Surveys are prepared.
The OECD assessment and recommendations on the main economic challenges faced by Italy are available by clicking on each chapter heading below.
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Chapter 1 The impact of the crisis and the potential for fiscal stimulus
Along with the rest of the OECD, Italy is facing a deep and possibly prolonged recession. A decade of slow productivity growth and gradually deteriorating competitiveness meant that the financial crisis hit a weakened economy. Fortunately, the banking sector itself has – up to now – escaped the risk of insolvency that has crippled banks in some countries, but this has not protected the economy from the credit crunch. The inability of successive government to take effective action to reduce public debt in the past has left the government with little room to manoeuvre in fiscal policy, other than to allow automatic stabilisers to work as best they can.
Chapter 2 Weathering the storm: the financial system in italy
The Italian financial system managed to cope with the “first round” of the crisis better than most of its European peers, and banks have suffered mostly on the funding side, due to the strong tensions affecting interbank markets. Banking supervision rules and practice played an important role in ensuring Italian banks took a relatively prudent attitude as did some specific features of the economy, such as the comparatively smaller size of firms and the low debt of households. However, some of these same features that helped to shield Italian banks from the first round of the crisis may expose them to the consequences of the recession. Italian authorities and the European Central Bank provided a prompt response to ensure the banking system had sufficient liquidity, and tensions in interbank markets eased significantly in recent months. A bank recapitalization scheme, though less urgent than in other countries, has been set up relatively late, and carries conditions that may have important limitations
Chapter 3 Supporting regulatory reform
Even prior to the recent financial turmoil, Italy was being left behind by economic growth in many other countries. Low productivity growth has a number of causes, some of which have their origin in poor or excessive regulation, public services and administration, and the legal system, which an ISAE report refers to as the “non-material” infrastructure. As the OECD Regulatory Reform Review of Italy to be published this year describes, progress has been made in improving regulation, although the results have yet to show themselves in productivity growth. Continued reforms are needed, and must be supported by a more efficient public administration and more purposeful use of Regulatory Impact Assessment and exercises such as the Spending Reviews by the Technical Committee on Public Finance, in parallel with efforts through the Taglia Legge and Taglia Oneri programmes.
Chapter 4 Towards better schools and more equal opportunities for learning
Compulsory school education in Italy produces poor results in terms of 15 year olds’ performance on PISA tests, compared with other OECD countries, despite a relatively high level of expenditure. While the influence of social background is smaller than in many OECD countries, it is largely transmitted through a kind of self segregation resulting from family choices among the different types of upper secondary school. Large differences in pupils’ performance between regions cannot be explained by the quantity of resources available; separating the influence of socio economic conditions from school efficiency is difficult and must be treated carefully in plans for extending fiscal federalism. The Italian government is rightly concerned to get better value for money and this chapter argues that policies to improve the information available to schools and teachers on the results they are achieving, while giving them appropriate incentives, responsibility and power to respond to such information, are necessary accompaniments to expenditure saving policies. An improved focus on good quality training, both for new recruits and experienced teachers, and recruitment procedures themselves, should also pay dividends on efficiency.
How to obtain this publication
The complete edition of the Economic Survey of Italy is available from:
The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.
For further information please contact the Italy Desk at the OECD Economics Department at email@example.com.
The OECD Secretariat's report was prepared by Paul O'Brien and Romina Boarini and Enrico Sette under the supervision of Patrick Lenain. Research assistance was provided by Annette Panzera.