Organized interests and competition policy in Italy: one step forward and two steps back

Abstract

ABSTRACT Competition policies are key for every government, the more so in times of economic crisis like the current one, because they foster recovery without having to increase the public debt. However, they imply thinly spread benefits, barely visible to the public, in the face of highly concentrated costs weighing heavily on specific interest groups, with the significant risk that politicians decline to pursue them. Nevertheless, in 2015 the Italian government announced the adoption of a competition reform affecting strategic economic sectors (pharmacies, transport, insurance, energy, postal services, communications, the legal professions). The allegedly wide-ranging consequences of the reform provoked the strong opposition of the interest groups involved, lengthening a decision-making process that only ended in 2017 with the adoption of Law no. 124/2017. This article aims at analysing the role played by the interest groups and their effective impact on the outcome. The work examines which interest groups mobilized during the decision-making process and the strategies they adopted to oppose the reform. It is argued that the type of interest groups involved matters: while, despite the Government’s intentions, the reform’s impacts were neutralized by those interest groups that acquired enough power during the decision-making process to mitigate the pro-competitive objectives of the Government, on the other hand, in some sectors, the interactions between varying interests led to different results.