Freeing Italy From "Straps and Laces"

Peanuts today may be better than a golden egg who knows when. But companies aren’t crying for money from that reluctant payer that is the public administration—they’re crying for measures to get the recovery started.

As Giulio Tremonti pointed out, GDP doesn’t increase by executive order. Not even Stalin was able to generate growth through his ukases, noted the former finance minister. He isn’t wrong. But getting from there to believing, and making others believe, that the state is impotent in facing an economy in recession is a long shot. Maybe the dispute over Article 18 has made us forget those fault lines that define the cage of the Italian economy: the qualitative and quantitative aspects—quality of the system of production, quantity of limitations—that make the Italian economy the hostage of a small minority.

Growth is obtained through human capital: education, research, innovation. When a dispirited Fabrizio Barca, head of the Department for Development Policies in Italy's Ministry of Economy and Finance, says that the brain drain—the fact that our best young people leave Italy—is understandable considering the conditions of our universities and funding for researchers, he is stating a sad truth. But the rules that determine this situation can be changed, often without incurring any extra costs.

Decades have passed since the economist Guido Carli denounced the “lacci e lacciuoli” (straps and laces) that restrain our economy. What has changed since? If you ask foreign investors what keeps them away from the Peninsula, they will answer that the biggest problems are the uncertainties and lags in obtaining authorizations. From the highways that have been blocked for over 10 years, to the mind-blowing affair of the natural-gas plants in Brindisi (the U.K.'s British Gas) and Trieste (Spain's Gas Natural Fenosa), to the permits denied for Ikea’s investments in Pisa and Turin, to the many other obstacles large and small that our companies know all too well, the litany of delays and vetoes is long and frustrating. A forlorn maze of overlapping functions, “service conferences” that do not work, single doors that become many, the perplexing red tape that multiplies these obstacles—all intricate knots still awaiting those who are competent enough to untie them.

In Italy, the so-called birthplace of law, the legal culture fishes in tanks full of rules and regulations and issues deferrals, delays, and appeals so as to create a course so slippery that it drowns the will to do and to innovate. The political parties create platforms; governments publicize their good intentions. But what is truly needed is something else. What is truly needed is a thorough and skillful study of all of the institutional and normative clots that beat down the creation of new initiatives, as well as the decision to change them (another low-cost reform)—even if that decision would mean using the sword with which Alexander the Great cut the Gordian Knot.