Italy: dependence and political fragmentation

Abstract

Italy's political economy is characterized by international weakness and internal fragmentation and polarization. Since 1947, Italy's foreign economic policies have been defined by a broadly-based political and social coalition dominated by the Christian Democratic party (DC). This coalition has incorporated or maintained close links with ministerial bureaucracies, the Bank of Italy, state-controlled industrial and commercial enterprises, large corporations, and Catholic trade unions. It has attempted to foster a postwar climate receptive to business interests and to foreign investment; one which would facilitate the maintenance of a stable domestic political and social order. At the same time, the DC coalition is so fragmented by factionalism and personal competition that economic policy making has lacked direction and has been marked by personalism and by improvisation. Italian policy makers operate in a precarious environment in that they must use political and economic weaknessin order to mobilize the international assistance needed to maintain the internal social order as well as external economic survival.