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Cassa per il Mezzogiorno
Cassa per il Mezzogiorno F. Martinelli, Universita` ‘Mediterranea’ di Reggio Calabria, Reggio di Calabria, Italy & 2009 Elsevier Ltd. All rights reserved.
Glossary Cassa per il Mezzogiorno The Cassa per le Opere Straordinarie di Pubblico Interesse per il Mezzogiorno (‘fund for extraordinary works of public interest for the Mezzogiorno’), in short, Cassa per il Mezzogiorno, was the agency established by the Italian government in 1950 with the task of implementing the Intervento Straordinario, a special program of public investment in support of Southern Italy. The Cassa had planning and financial autonomy and was reauthorized several times, until its termination in 1984. Although the experience of the Tennessee Valley Authority in the USA was well known in Italy, it did not inspire the Cassa’s institutional architecture, which was rather in continuity with the Fascist practice of special institutions. Intervento Straordinario (IS) The term means special or extraordinary intervention and refers to the set of financial provisions and policy measures established by the Italian government – in addition to ordinary public spending – to support the development of Southern Italy. Established in 1950, it was terminated in 1992. Its chief institution until 1984 was the Cassa per il Mezzogiorno, often confused with the IS itself. After the Cassa, the IS operated with a more articulated institutional architecture regulated by the Law 64/1986. Mezzogiorno The word means noon in Italian and refers to the Southern part of the country. It includes 8 of the 20 Italian administrative regions accounting for about 40% of the Italian territory and 35% of the national population. The roots of its underdevelopment lie in the very different historical trajectory of the region, which had a mostly colonial status up to the eighteenth century. Even after the political unification of the Italian peninsula in 1861, and throughout World War II, the Mezzogiorno was characterized by a semi-feudal economic and social structure, which hindered any bourgeois revolution and capitalist development. Because of the magnitude of the problem and means deployed, the Mezzogiorno and the policies established to support its development have become a paradigmatic case in regional studies. Southern Question The term (Quistione Meridionale in Old Italian) synthesizes the multiple issues related to the underdevelopment of the Mezzogiorno. It became internationally known through the works of Antonio Gramsci (1891–1937), who provided a Marxist but very original analysis of the historic social bloc – an alliance between the Italian northern industrial bourgeoisie and the southern landed aristocracy – that contributed to
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reproduce southern underdevelopment after the unification of the country and throughout the Fascist regime. Third Italy The term was used for the first time by Italian sociologist Arnaldo Bagnasco in his 1977 book Le tre Italie (The three Italies). Bagnasco stressed that, in between the traditional dualistic portrait of the Italian economy – the industrialized north based on large firms and the lagging agricultural south – a third model, that is, the Third Italy, was to be acknowledged in the northeastern and central regions, based on a diffused and articulated system of small firms. His work together with that of Italian economists Giacomo Becattini and Sebastiano Brusco on industrial districts became internationally known in the 1980s, spurring a whole new approach to regional development. However, while the above authors cast the highly specific territorial models of production and reproduction of the Third Italy into an articulated institutional approach, their work was vulgarized by other scholars, who put forward a universal normative local development model.
Introduction The Cassa per il Mezzogiorno was a public agency created by the Italian government in 1950 to carry out the Intervento Straordinario (IS), a special program of additional public investment directed to the historically lagging southern region (Figure 1) of the country (40% of the national territory and 35% of national population). Initially funded for a 10-year period, the Cassa was refinanced several times, becoming the main arm of Italian regional policy for over 30 years, until its suppression in 1984. The IS outlived the Cassa, with a different institutional architecture, until 1992, when dedicated national financial support for the Mezzogiorno was altogether ended. Because of its magnitude and duration, the IS attracted significant international attention and the Cassa became a renowned model of regional developed agency. However, its impact on the Mezzogiorno has lately become controversial. Since the early 1980s, mainstream opinion portrays the Cassa – and the overall IS – as an epochal failure. Not only did it supposedly fail to bridge the north–south economic divide, but it also allegedly helped create in the South a distorted, inefficient, and corrupt regional development model, based on the clientelistic and parasitic redistribution of public expenditures. The termination of the Cassa in 1984 was thus saluted as a
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Milano Torino
Genova
Abruzzo Roma
L'aquila Campania Napoli
Molise Campobasso Puglia Bari Basilicata Potenza
Sardegna
Calabria Cagliari
Catanzaro Palermo Sicilia
Figure 1 The Mezzogiorno of Italy.
necessary step to restore market mechanisms and make the South take its destiny in its own hands. Such a reading, however, is higly reductionist and ideologically biased, as it is carried out through the lens of the new local development theories and discourses. Policies must be evaluated in their specific historical and geographical context and looking at their actual objectives. To this purpose, the article that follows re-traces the evolution of the Cassa per il Mezzogiorno, taking into account the development paradigms of the time, the national conditioning context in terms of both regulation and accumulation, the aims of policy, as well as the changes in the southern economy and society. In this articulated perspective, the evaluation of the Cassa’s impact on the Mezzogiorno turns out inevitably more nuanced and rather positive.
Rise and Decline of State Intervention in Southern Italy: The Cassa per il Mezzogiorno Three main policy phases can be identified in the evolution of the Cassa per il Mezzogiorno: (1) the pre-
industrialization phase (1950–57); (2) the active industrialization phase (1958–75); and (3) the crisis years (1976–80). The Pre-industrialization Phase (1950–57): Agrarian Reform and Public Works In the first phase, policy for the Mezzogiorno was limited to sustaining regional employment and income, while improving the external conditions of accumulation. The economic and political debate
At the end of World War II, a major focus of the economic and political debate in the newborn Italian republic was the role of the state in a perspective of trade liberalization and international capitalist integration. The Right-wing parties were against any form of State intervention, whereas the Left-wing coalition was in favor of planning and of structural institutional reforms. With regard to the Mezzogiorno, except for the extreme right, most political forces favored some form of public action to deal with the severe unemployment and poverty problems of the region and to modernize its very
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backward productive structure. Partly drawing on Gramsci’s analysis of the Southern Question, the Left and some of the Moderates stressed the need for an agrarian reform and for an industrialization program. The latter view was especially advocated by the SVIMEZ – Associazione per lo Sviluppo dell’Industria nel Mezzogiorno, a research association funded in 1946 by prominent Italian intellectuals and economists and still active in promoting studies and initiatives.
employment and income, thereby activating local multiplier effects; and (2) improving the environment for private investment through infrastructural investment and agricultural modernization. The operational architecture of the IS was highly centralized: a special State agency was created, the Cassa per il Mezzogiorno, with the exclusive authority to design, finance, and implement such investment programs, in addition and in close coordination with ordinary public expenditures.
Politics and policies
Policy implementation
The first Right-Center Republican government, elected in 1948, adopted a noninterventionist approach, but could not avoid tackling the problem of the South, where episodes of land occupation and bloody clashes with the police had occurred. In 1950, two important measures were authorized: a partial agrarian reform and the Intervento Straordinario (IS), a special program of public works. Both measures had economic, but also political consensus objectives. It was in these early years that the Italian style of developmental state was established, through what has been called a ‘compromise without reforms’: no structural changes of the ordinary State apparatus were implemented, whereas an extensive use was made of special public institutions. The agrarian reform aimed at modernizing the feudal structure of southern agriculture, by expropriating the most unproductive portions of the large estates (latifundia) and redistributing them to landless peasants in the form of small holdings. It also contributed to defuse the potentially subversive aggregation of such peasants, transforming them into a new class of small landowners. The IS was initially conceived as a true Keynesian program of public works, a compromise with the northern industrial interests, which opposed any strategy of southern industrialization. It had two major aims: (1) sustaining
Throughout the 1950s, regional policy for the Mezzogiorno was rather efficient and effective, also because of its independence from cumbersome ordinary spending procedures. Within the agrarian reform, about 650 000 ha were expropriated and assigned to landless peasants. With regard to the IS, the quasi-totality of the Cassa’s expenditures in this phase went to public works (Table 1), the majority of which was in support of agricultural modernization (land reclamation, irrigation systems, rural infrastructure) and the rest for civilian infrastructure (transport, aqueducts, sewage). Investment programs were relatively integrated, extraordinary expenditures effectively additional to ordinary spending, and infrastructures of a high engineering quality.
Table 1 Periods
1950–57 1958–65 1966–70 1971–75 1976–80 1981–86 1987–92
Economic and social transformations
In these years, the Mezzogiorno experienced important changes, although not as radical as those of the subsequent decades. The agrarian reform contributed to relieve the unemployment pressure and to increase agricultural production and productivity, although it could not prevent a massive exodus of rural population from the mountains and the most marginal areas. The program of public works was in turn quite successful in sustaining both
Expenditures by the Intervento Straordinario in the Mezzogiorno 1950–92 Direct expenditures by the Cassa and the Agency (Law 64/1986)
Direct investment in infrastructure (%)
Financial incentives to investment (%)
Other measures (%)
84.8 55.8 42.8 52.7 66.3 72.8 47.5
4.8 16.7 33.8 34.1 26.1 19.7 24.2
10.4 27.5 23.4 13.2 7.6 7.6 12.4
Transfers to regional and local administrations (%)
Total expenditures (%)
Average annual expenditures (billion liras at constant prices 1992)
Total expenditures by the Intervento Straordinario as a % of Italian GDP (current prices)
– – – – – – 15.9
100.0 100.0 100.0 100.0 100.0 100.0 100.0
2295.8 3582.3 4893.4 8226.9 9753.0 8051.4 7708.5
0.70 0.74 0.70 0.90 0.90 0.65 0.53
From Marciani, G. E. (1993). La spesa della Cassa e dell’Agenzia per il Mezzogiorno nei quarantatre anni dell’Intervento Straordinario. Rivista Economica del Mezzogiorno 3, 673–689; SVIMEZ (1993). Rapporto 1993 sull’economia del Mezzogiorno. Bologna: Il Mulino.
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employment and income. It also achieved important multiplier effects, as the increased local demand spurred a temporary growth in the local manufacturing of consumer goods, still sheltered from external competition. In fact, despite the rapid growth of the north, the gap between the two parts of the country did not increase: throughout the 1950s, the region’s per capita GDP and per capita consumption remained a stable proportion of the north-central values (respectively 53–55% and 61– 62%). Per capita investment actually increased from 55% to 62%, as a result of public works (Table 2). Southern employment remained stable (Table 3): the heavy losses in agriculture were compensated by significant increases in the construction sector (owing to public works) and in manufacturing (as a consequence of the increased local demand). However, southern unemployment pressures were mostly relieved by out-migration: between 1951 and 1961, 2 054 000 people (12% of the southern population!) left the Mezzogiorno, initially bound to North America, Australia, and Northern Europe and later in the decade to feed the ‘economic miracle’ in Northern Italy. While supporting the economy of the Mezzogiorno, the IS in this period achieved a major historical transformation of the southern social basis: the unproductive agrarian aristocracy – a pillar of the post-unification historic social bloc described by Gramsci – was substituted by a new social basis of consensus, formed by the new class of small landowners, the petty bourgeoisie of
Table 2 Per capita GDP, consumption, and investment in the Mezzogiorno, as a % of north-central Italy, 1950–1996 Years
Per capita GDP in the Mezzogiorno as a % of N-C Italy (current prices)
Per capita household consumption in the Mezzogiorno as a % of N-C Italy (constant prices)
Per capita gross investment in the Mezzogiorno as a % of N-C Italy (constant prices)
1951 1956 1960 1964 1969
53.4 55.2 53.1 56.5 58.0
61.4 61.2 62.0 64.2 66.1
55.2 62.2 62.0 72.8 77.6
1971 1974
61.3 60.7
69.9 71.3
91.8 84.2
1980 1986
57.8 58.0
69.7 70.6
71.6 73.3
1992 1996
58.0 55.6
69.7 66.7
63.5 57.8
From Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino; SVIMEZ (1993). I conti economici del Centro-Nord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino; SVIMEZ (1999). Rapporto 1999 sull’economia del Mezzogiorno. Bologna: Il Mulino; SVIMEZ (2006). Rapporto 2006 sull’economia del Mezzogiorno. Bologna: Il Mulino.
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the expanding retail and service sector, as well as the local administrative bourgeoisie, subordinate to Central State policy choices. In these years, the south began to be integrated in the national accumulation model, albeit with a still passive role: as a reservoir of labor force, as an outlet for construction materials and equipment manufactured in the north, and as a basis of consensus for the hegemonic national political parties. The Industrialization Phase (1958–75): Growth Poles and Exogenous Fordist Investment At the end of the 1950s, a major turn occurred in regional policy, with the beginning of an active industrialization strategy. This shift was explained by several concurrent factors: new developments in the economic debate, the changed national political conditions, and the take-off of the Italian economy – the so-called ‘economic miracle’. The economic and political debate
Starting in the late 1950s, the international economic development and policy debate was increasingly framed in the positivist paradigm of growth, industrialization, and modernization. At the same time, the Central State began playing a growing role in many European countries, actively supporting national accumulation through measures well beyond traditional macroeconomic policy – direct ownership in strategic sectors, infrastructural investment, support of national industries – and featuring what has been called the developmental state. In the same years, the issue of regional inequalities also came to prominence through the works of economists such as Myrdal and Hirschman, while theories such as the ‘big push’ by Rosenstein Rodan and the ‘growth pole’ by Perroux strongly informed regional policies. In the course of the 1960s, many regional development agencies and programs were established throughout Europe. Politics and policies
In Italy, a Center-Left government coalition was formed in the early 1960s, creating the conditions for implementing such new approaches. The 1960s and 1970s were thus characterized by the national economic programming experience, a growing role of State holdings in strategic industrial sectors (steel, chemicals, energy) fueling the economic miracle, and the direct support of southern industrialization, despite the continued resistance of northern industrial groups. The economic miracle, in turn, allowed for greater public expenditures and increased allocations to the IS. The 1960s also witnessed a progressive strengthening of the labor movement, with two major waves of conflicts
450 Table 3 Periods
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Variations (%) in employment, 1951–80 Total employment
Manufacturing Employment
Construction employment
Mezzogiorno
North-central Italy
Mezzogiorno
North-central Italy
Mezzogiorno
1951–59 1959–69
0.5 7.0
5.8 3.8
19.4 3.0
17.6 13.7
63.7 32.2
44.1 10.3
1970–75 1975–80
2.1 6.5
4.2 6.8
10.9 11.0
3.4 4.5
4.7 4.9
14.6 0.5
North-central Italy
From Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino; SVIMEZ (1993). I conti economici del CentroNord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino.
and strikes: the first in 1962–63, leading to the establishment of collective bargaining procedures at firm level and some wage increases; the second in 1969–70 (the socalled Hot Autumn), characterized by a much larger social mobilization for social reforms. The new industrialization strategy for the Mezzogiorno was enacted through several legislative steps (Box 1). The Cassa per il Mezzogiorno was reauthorized and its funding were further increased. In addition to infrastructural investment, a robust program of very generous financial incentives to industrial investment and a growth-poles strategy were launched. Initially geared to small and medium firms, the incentives were progressively extended to large corporations. A major institutional change occurred in 1970 with the establishment of the long-delayed regional governments. This administrative decentralization involved a slight reorganization of the IS, shifting some project formulation responsibility from the Cassa to the newly established southern regional governments (Box 1). Policy implementation
The increased state effort in sustaining southern industrialization was clearly reflected in the Cassa’s expenditures. Average annual spending almost tripled and increased also as a share of total national resources. The lion’s share now went to industrial incentives, but spending on infrastructure remained relevant in absolute terms (Table 1). On the other hand, the additional character of the IS expenditures in this period significantly declined, as public works financed by the Cassa ended up substituting for ordinary infrastructural investment. Moreover, starting in the late 1960s, the management of both the IS and the state-holding system began losing autonomy and was progressively conditioned by national politics. Economic and social change
Throughout the 1960s, the Italian economy achieved impressive growth rates, which brought the country among the top five industrialized nations of the world. Italian industrial capital was now characterized by a bipolar structure – the large private northern industrial groups – mostly operating in the north-west – and the
increasingly powerful state holdings – which followed a more articulated locational strategy. Both the economic miracle and the industrialization policy had a powerful impact on the Mezzogiorno. This was the period of the ‘great transformation’, when the southern economy and society were rapidly modernized and fully integrated into the Italian capitalist model – when the gap between the region and the rest of the country, according to basic macroeconomic indicators, was significantly reduced for the first and last time (Table 2). The years 1960–75 can indeed be considered the golden age of southern industrialization. From an average 16% of national industrial investment in the 1950s, the Mezzogiorno’s share reached a peak of 33% in 1970–73 (Table 4). Manufacturing investment was prevailingly of exogenous origin, but its composition evolved over time. Two main waves can be identified. In the 1960s, it was mainly the State holdings – which were locationally footloose and needed capital to fuel their expansion – that exploited the financial incentives for very large investment projects in the steel, chemical, and petrochemical sectors. However, in spite of such massive investment and the thousands of jobs created in the new factories, southern manufacturing employment in this decade declined ( 3% compared to þ 14% in the rest of the country), as a consequence of the crisis of small local firms (Table 3). In fact, with the improvement of transport infrastructure, the more competitive consumer goods manufactured in the north flooded the south and wiped out local production. The continued expansion of the construction and service sectors only partially compensated for these losses. In this decade, although international migration declined, internal migration continued: between 1961 and 1971 another 2 000 000 people left the Mezzogiorno and migrated to the large cities of north-central Italy. The second industrialization wave occurred in the first years of the 1970s. This time, large private northern firms operating in the automobile, electromechanical equipment, and other modern sectors began to exploit industrial incentives for relocating production in the Mezzogiorno. It was a late-Fordist strategy to evade the labor conflicts in the north and exploit the less-unionized
Cassa per il Mezzogiorno
Box 1 Italian regional Mezzogiorno 1950–92.
policy
for
the
The Cassa per il Mezzogiorno (1950–80) 1950–57. The pre-industrialization phase: Public works and agrarian reform. The first phase of regional policy for the Mezzogiorno – the so-called Intervento Straordinario – was regulated by the Law 646/1950, which established the Cassa per il Mezzogiorno, and by the subsequent Law 949/1952. The Cassa was to design, finance, and implement a 10-year program (later extended to 12 years) of extraordinary public works. The program was aimed at the modernization of agriculture (land reclamation, hydrogeological stabilization, irrigation systems, creation of rural centers), in close connection with the agrarian reform, and at the creation of basic civilian infrastructures (roads, sewage, water supply). 1958–75. The active industrialization phase: Industrial incentives and industrial development areas In 1957, the Law 634/1957 extended the life of the Cassa until 1965 and almost doubled its budget. It also introduced important new measures in support of industrialization: *
*
*
a system of financial incentives to industrial investment (grants and subsidized loans to industrial firms investing in the Mezzogiorno); initially geared to small and medium firms, the incentives were later extended to any size of investment (Laws 555/1959 and 1462/1962), in order to accommodate large firms’ investment projects; the promotion of industrial development areas (Aree di Sviluppo Industriale and Nuclei di Sviluppo Industriale) among consortia of municipalities, which would be privileged in the granting of financial incentives to industrial investment, as well as infrastructural investment; a reserve clause, that is, the obligation for all statecontrolled firms and institutions to place at least 40% of their total investment and 60% of their new investment in the south, as well as the obligation for public institutions to purchase at least 30% of their inputs from firms located in the south.
The legislation also established a new Ministries Committee for the Mezzogiorno, with the task of coordinating extraordinary intervention with ordinary expenditures. In 1965 the Law 717/1965 extended the life of the Cassa until 1980 and re-financed its activities for further five years. Industrial incentives and industrial development areas were confirmed, but action in the Mezzogiorno was to be integrated into the national economic programming framework, therefore brought under the coordination of the CIPE (Interministry Committee for Economic Programming). Moreover, starting in 1969, very large industrial investment projects had to be negotiated with the Interministry Committee and could obtain incentives above the usual standard. Finally, since the Cassa spending over the last period of operation had ended up substituting for ordinary expenditures, the new legislation emphasized that the Intervento Straordinario was to be additional to the normal share of public spending in the south. In 1971 the Law 853/1971 refinanced the Cassa for another 5 years and introduced a number of important innovations, among which was the transfer of some policy responsibilities to the newly formed regional governments: *
the link with national economic planning was re-enforced; the Ministries Committee for the Mezzogiorno was abolished and its coordinating duties taken up by the
*
*
*
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CIPE (Interministry Committee for Economic Programming); large industrial groups had to obtain the CIPE approval for any large scale investment project on the national territory (the first attempt to establish concertation between large firms and the state, through the contractual agreement formula); infrastructural projects received new emphasis in the form of Special Projects, that is, large, intersectoral, integrated projects of regional or interregional interest. the task of designing Special Projects and proposing them to the CIPE for approval was entrusted to regional governments; to this end, a new Committee of the Presidents of Southern Regional Governments was established, while the Cassa was to provide technical assistance.
1976–84. After the crisis In 1976 the Law 163/1976 refinanced the Cassa per il Mezzogiorno until 1980. Among the new features were: *
*
* *
further fiscal exemptions for industrial firms investing in the south; a new form of financial incentive to support the creation of industrial employment, that is, a 10-year full subsidization of social security payments for any new industrial job created; a further focus on special projects; the explicit mandate to the Cassa to provide technical assistance and consulting to those regional government that requested it.
The Law 64/1986 (1985–93) The Law 64/86 defined the new organic discipline and resources of the Intervento Straordinario in the Mezzogiorno for 9 years (1985–93). In organizational terms, it introduced a distributed system of responsibilities: 1. A new Department for the Mezzogiorno was to be established within the Ministry of the Mezzogiorno, with the following tasks: strategic formulation of sectoral priorities and budget allocation; evaluation and approval of investment projects submitted for financing; and coordination of extraordinary and ordinary expenditures. 2. A new Agency for the Mezzogiorno was also established, with the limited task of managing the funds allocated by the Department. Once programs and projects were approved by the Department, the Agency had to draft contracts with the entitled subjects and proceed to payments. 3. Regional and local governments were fully entrusted with the task of formulating local development programs and drafting investment projects, as well as implementing such programs and projects once approved by the Department and funded. Content-wise, the new legislation significantly enlarged the domains of policy intervention, including industrial restructuring, business services, research and development, technological innovation, and training. The existing toolkit of financial incentives was mostly confirmed: individual firms could apply for financial incentives, but big firms could negotiate large scale investment directly with the Department, through the Contratti di Programma. With regard to major infrastructural projects, involving different government levels, Accordi di Programma could be drafted and submitted to the Department. The reserve clause for state enterprises and institutions was also reconfirmed.
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Table 4 Investment in the Mezzogiorno as a % of Italy, 1951–1999 Periods
Gross total investment in the Mezzogiorno as a % of Italy
Gross industrial investment in the Mezzogiorno as a % of Italy a
Gross manufacturing investment in the Mezzogiorno as a % of Italy
1951–59 1960–64 1965–69 1970–73 1974–80 1981–92 1993–99
24.5 26.2 28.1 32.0 30.8 28.7 23.4
15.8 23.5 25.4 33.0 27.7 – –
– – – 30.6 23.5 17.6 17.1
a
Includes the construction industry. From Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino (current prices); SVIMEZ (1993). I conti economici del Centro-Nord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino (constant prices 1985); SVIMEZ (2000). Rapporto 2000 sull’economia del Mezzogiorno. Bologna: Il Mulino (constant prices 1990); SVIMEZ (2006). Rapporto 2006 sull’economia del Mezzogiorno. Bologna: Il Mulino (constant prices 1995).
workforce of the South. This time, manufacturing investment yielded a quite relevant employment increase ( þ 11% between 1970 and 1975), for the first time higher than in north-central Italy (Table 3). In this policy phase, the Mezzogiorno performed two new functions within the national accumulation model: it represented a subsidized investment terrain for the expanding and, later, relocating national Fordist corporations, as well as a market outlet for northern consumer products. The southern social structure was further profoundly transformed: a modern working class was created in the new Fordist factories, while a service middle class formed as a consequence of the further expansion of both collective and private services. By the mid-1970s, the south was fully integrated into the national affluent consumption model. Particularly relevant was the rise of relatively powerful local social blocs – made of the local political and administrative bourgeoisie, professionals, real estate and construction interests – lobbying for central state funding and subordinately ingrained in the growing political management of the IS, through the national party system. After the Crisis (1976–80): The End of Late-Fordist Industrialization The economic crisis of the mid-1970s, as we now know, marked an epochal change. It was the end of the Fordist– Keynesian model of accumulation, based on mass production, industrial growth, and expanding public expenditures. Politics and policy
In Italy, the radicalization of social conflicts and the end of the Fordist growth starting with the first oil shock of
1973 eventually sapped the national economic programming ambitions and the IS, bringing down the overall accumulation model. However, the structural character of the crisis was not immediately perceived. At the national level, depressive macroeconomic policies were implemented to reduce inflation, which caused a major economic downturn. Later programs to support industrial restructuring were mostly used by firms in declining sectors to subsidize redundant employment. The state-holdings system was burdened with rescue operations – that is, the acquisition of collapsing private firms – and employment support. With regard to the Mezzogiorno, the Cassa was refinanced in 1976 for the last time. The only relevant innovations were a new subsidy to employment creation and a further involvement of regional governments (Box 1). In 1980, the Cassa was due to expire, but its operations were repeatedly extended until 1984, when it was eventually terminated. The IS was to continue through a radically revised institutional architecture. Policy implementation
Despite the economic crisis, the Cassa’s expenditures in the last part of the 1970s further increased (Table 1). They mostly went into infrastructural investment, whereas industrial incentives, after the peak of 1971–75, declined and mostly concerned the completion of previous projects. On the organizational side, although since 1971 the Cassa was supposed to shift some policy formulation responsibilities to the regional governments and evolve into a technical assistance agency, the transitional norms limited the transfer of competences by allowing the Cassa to complete all previously approved projects. On their side, the new regional administrations exhibited little technical capabilities and political willingness to take over a more propositional role. Economic and social transformations
The years following the 1974–75 downturn – the worst since the Great Depression – were characterized in the entire industrialized world by the beginning of a profound industrial restructuring process. In the Mezzogiorno, the crisis meant the abrupt interruption of the Fordist industrialization process led by exogenous manufacturing investment. On the other hand, partly as a consequence of the industrialization policy, a revival of local entrepreneurial capabilities was observed, with the start-up of several new small and medium firms, manufacturing either consumer goods or components for the exogenous plants. In fact, the 1970s were, on the whole, a very positive decade for southern employment (Table 3). Between 1971 and 1981, while out-migration virtually ended, about 150 000 manufacturing jobs were generated, 40% of which in the large establishments (>500 employees)
Cassa per il Mezzogiorno
created by Fordist investment. Employment in services continued to expand, especially in the public sector, also as a consequence of the new regional administrations, whereas construction employment declined. Social change in the south during the second-half of the 1970s was also relevant. The national political mobilization for greater democracy and social justice, that since 1968–69 had spread from factory workers to groups of the growing middle class, had reached its peak in the mid-1970s and involved for the first time also the Mezzogiorno. The success of the Left in the 1975 and 1976 elections was achieved to a large extent with the support of the traditionally conservative south. But precisely when the above processes of social modernization and entrepreneurial awakening were gaining momentum, they were undermined by the escalation of terrorism, on the other hand, and the economic crisis, on the other hand. The end of growth and the degeneration of politics in the subsequent decade would shatter the new-found mobilization of southern society. In this last policy phase, the functional role of the south in the national accumulation model was significantly reduced: no longer a reservoir of labor, neither a subsidized terrain for industrial expansion, the Mezzogiorno remained a mere pool of electoral consensus. The further empowerment of regional governments, in a context of faltering market mechanisms, contributed to reinforce the local power blocs and their political management of public expenditures. Hiring procedures, the granting of permits, and public budget allocations were increasingly used to strengthen local political control.
State, Regional Policy, and Southern Development in the Cassa’s Years: An Assessment Between 1950 and 1980 the Mezzogiorno experienced the most dramatic transformation of its history, at a pace and to an extent that can only be understood now, in a historical perspective. In 30 years – less than half a lifetime – the Mezzogiorno evolved from an agricultural, semi-feudal, poverty-stricken society into a modern, partially industrialized, and relatively affluent society. The region was fully integrated – although still in a dependent fashion – into the national model of capitalist accumulation, mass consumption, and welfare. The gap with the rest of the country in terms of production, consumption, investment, physical and social infrastructure, although it remained important, was significantly reduced (Table 2). How much was such an impressive change the result of the Cassa per il Mezzogiorno action? Evaluating the latter’s impact is difficult, for two reasons. First, in policy
453
evaluation it is not easy to isolate the actual effects of programs from what would have happened independently of them; second, the current debate is highly ideologically biased. The widely accepted view – even in Left-wing circles – is that the Cassa per il Mezzogiorno – and the IS in general – was an epochal mistake: at best, it was a waste of public resources, which created cathedrals in the desert, prevented the release of the region’s endogenous entrepreneurial potential, and failed to generate a selfsustaining development model; at worst, it was the chief cause of the parasitic, clientelistic, and corrupt degeneration of southern society. Only few observers and public actors – considered nostalgic – stoutly defend the action of the Cassa and the intervention of the state in the Mezzogiorno. Between these two extremes, there is room for a more dispassionate and nuanced assessment, that is, contextualizing the Cassa’s operations with regard to the specific historical period, the contingent problems of the Mezzogiorno, and the actual objectives of regional policy. Three aspects shall be considered: (1) the Cassa’s approach and tools (2) its impact, and (3) its organizational structure. In what concerns the toolkit, the Cassa per il Mezzogiorno was an advanced product of its time. Its approach to development and its actual programs were coherent with the contemporary scientific and policy paradigm, centered on growth, infrastructural investment, industrialization, and modernization. Most importantly, they were consistent with the contemporary Fordist accumulation model, based on transport infrastructure and vertically integrated mass production. Also, the use of state holdings as growth engines was in line with practices adopted in many European countries. In what concerns the actual impact of the Cassa’s programs, despite the above-mentioned methodological difficulties, several results are above dispute. In the first 20 years, infrastructural investment was very effective in improving the economic and social environment of the Mezzogiorno, in reducing communication and transportation disparities, and in logistically integrating the two parts of the country, while fulfilling the Keynesian objectives of employment and income support. In a period when the north was growing at an accelerated pace, the IS was able to pull the Mezzogiorno along, so that the divide did not increase. As to the industrialization strategy, policy was undoubtedly successful in creating a modern manufacturing basis. Industrial investment in the Mezzogiorno steadily increased in absolute and relative terms throughout the 1960s, reaching a peak in the early 1970s and bringing the productive structure of the region very close to that of the rest of the country: at the end of the 1970s, industrial employment had reached 29% of total southern
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employment, compared to 39% in north-central Italy, whereas services accounted for 48% and 52%, respectively. Some observers have criticized the limited support to local firms, but without the investment by state holdings and exogenous Fordist firms, an industrialization process of that magnitude could not have occurred. The fact that such a late-Fordist industrialization model came to an end, then, can hardly be blamed on the Cassa per il Mezzogiorno, since the crisis of the accumulation regime involved the whole country and factories closed down in the south as well as in the north. The south was worst hit because of its still young and fragile socioeconomic structure. From the point of view of the institutional architecture, the excessively independent and centralized structure of the Cassa has been blamed because it was prone to discretionary behavior and prevented the empowerment of local administrations. This was actually a conscious choice, dictated by the urgency of the southern problems after World War II and the need for agile and coordinated action, which could not have been ensured through the ordinary administration of the state, or by the weak local authorities. The Cassa was the natural and most effective solution within the developmental state approach of the Fordist–Keynesian regime, as proved also by its implementation records. Finally, in evaluating the impact of the Cassa one should also consider that the amount of additional state resources devolved to the Cassa, for the Mezzogiorno were never truly additional. Repeatedly – in the 1960s and 1970s – the Cassa’s investment in the Mezzogiorno substituted for the due share of infrastructural investment by the ordinary administration of the state. This said, a number of negative side effects must also be mentioned. First, the success of a special institution such as the Cassa was contingent upon the commitment and technical capabilities of its staff. When technocrats began to be substituted by political appointees and politics began prevailing over economic strategies, the Cassa’s expenditures – as in other state institutions – lost effectiveness. Second, the choice of a special, centrally managed state did contribute to de-legitimize ordinary state procedures and to consolidate the passive and subordinate role of the local administrations it was to surrogate for. When politics took over in the late 1970s, the centralized institutional architecture of the Cassa – although it cannot be considered a cause – certainly became functional to the formation of a clientelistic local administrative culture. In conclusion, regional policy implemented by the Italian government through the Cassa per il Mezzogiorno was a powerful and quite effective financial and technical effort, consistent with the theoretical and policy paradigms of the time. Most importantly, the IS was coherent with the Italian accumulation strategies of the Fordist–
Keynesian period, in which the Mezzogiorno did have a functional role. Without such an effort the Mezzogiorno would certainly have been left behind. On the other hand, the very exogenous character of the Cassa’s action, while functional to quickly producing convergence – via infrastructure, industrialization, modernization, and integration – also undermined the sustainability of the ‘great transformation’ it had engineered. The end of the national accumulation model that had fueled this convergence occurred too early to allow the socioeconomic model established in the Mezzogiorno to survive on its own legs.
Epilog In the whole Western world, the 1980s was a period of transition, marked by the demise of the developmental state approach, the rise of neoliberalism, and the search for a new balance between regulation and accumulation. Squeezed in between heightened international competition and increased internal conflicts, and failing to identify a new national accumulation strategy, the Italian state abdicated its developmental role. Economic policy became defensive and piecemeal. State holdings were increasingly politically controlled, betraying their original strategic role. The overall management of public expenditures was progressively bent to gain political consensus, rather than support accumulation. It is in this decade that corruption in the assignment of public contracts reached unprecedented levels – in the north and the south alike – and a huge public debt was accumulated, eventually leading to the Tangentopoli scandal and the fiscal crisis of the State in the early 1990s. As to regional policy, 2 years after the termination of the Cassa and after a difficult parliamentary debate, the Law 64/1986 was approved, establishing new rules for the IS. It was the last – half-hearted – attempt to reform Italian regional policy, trying to take into account both the changed features of post-Fordist accumulation and the need to fully decentralize policymaking to regional and local governments, while maintaining central coordination (Box 1). Although sound on paper, the new IS legislation was the death rattle of Italian regional policy. Delays in the organizational restructuring and systematic underfunding undermined the implementation of the new policy framework, while, on their side, regional and local governments exhibited a protracted resistance to give up their passive roles of recipients of central state transfers and to take over the new managerial role expected from them. By the end of the 1980s, as the neoliberal ideology gained consensus with its corollaries of deregulation and privatization, the IS had become the culprit for all the Mezzogiorno’s evils. Pressures to abolish national
Cassa per il Mezzogiorno
top-down regional policy and establish decentralized bottom-up programs in tune with the new local development theories came from within and from without. On the one hand, small and medium firms operating in central and northeastern Italy – the so-called Third Italy, of which industrial districts were the nobler and most popular version – had substituted Fordist corporations in both the Italian accumulation model and development discourses, endorsing the rising paradigm of local development. The northeastern component of small firms had actually found a political voice in the new federalist party Lega, which strongly opposed any redistributive policy in favor of the south. On the other hand, the 1988 reform of the European structural funds and the beginning of European cohesion policies undermined the legitimacy of national regional policies deemed to distort competition. In this hostile economic and political context, made all the more difficult by the fiscal crisis of the state and the constraints imposed by the Maastricht Treaty, the Mezzogiorno no longer fulfilled any functional role. In 1992 – before its natural expiration – the IS was altogether terminated. The term Mezzogiorno disappeared from Italian official documents and was substituted by the Euro-term ‘lagging areas’. The southern question ceased to be a national question and became a local issue, to be dealt with by ordinary or European local development programs, which were extended to the overall national territory. The effect of this abrupt end of additional public investment in the Mezzogiorno was severe: by the mid1990s the gap between the two parts of the countries had resumed pre-industrialization levels (Table 2). Most importantly, unemployment soared and reached rates above 20%, that is, three times that of the rest of the country. This time it was no longer unskilled rural unemployment, but educated youth and women. National concern for the Mezzogiorno resumed in 1998 – once Italy had achieved the required conditions to enter the European Monetary Union – with the creation of the department for development policies (DPS), a structure within the Ministry of Economy and Finance charged with the task of coordinating structural funds resources and local development programs. But, 15 years after the termination of the IS and the decentralization of regional policy, the north–south divide has not yet abated. See also: Developmentalism; Fordism, Post-Fordism and Flexible Specialization; Growth Poles, Growth Centers;
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Industrial Districts; Industrialization; Local Development; Regional Inequalities; Regional Planning and Development Theories; Uneven Regional Development.
Further Reading Barbagallo, F. and Bruno, G. (1997). Espansione e deriva del Mezzogiorno. In Barbagallo, F., Barone, G., Bruno, G. et al. (eds.) Storia dell’Italia republicana, vol. 3, Tome II, pp 399–470. Torino: Einaudi. Barca, F. (ed.) (1997). Storia del capitalismo italiano dal dopoguerra ad oggi. Rome: Donzelli. Cafiero, S. (2000). Storia dell’Intervento Straordinario nel Mezzogiorno (1950–1993). Rome: Piero Lacaita Editore. Cafiero, S. and Marciani, G. E. (1991). Quarant’anni di Intervento Straordinario nel Mezzogiorno (1950–1989). Rivista Economica del Mezzogiorno 2, 249--274. D’Antone, L. (ed.) (1996). Radici storiche ed esperienze dell’Intervento Straordinario. Napoli: Bibliopolis. Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino. Dunford, M. (1988). Capital, the State and Regional Development. London: Pion. Gramsci, A. (1978). Some aspects of the southern question. In Selections from Political Writings 1921–26, pp 441--462. London: Lawrence & Wishart. Graziani, A. (1978). The Mezzogiorno in the Italian economy. Cambridge Journal of Economics 2, 355--372. Graziani, A. and Pugliese, E. (eds.) (1979). Investimenti e disoccupazione nel Mezzogiorno. Bologna: Il Mulino. Marciani, G. E. (1993). La spesa della Cassa e dell’Agenzia per il Mezzogiorno nei quarantatre anni dell’Intervento Straordinario. Rivista Economica del Mezzogiorno 3, 673--689. Martinelli, F. (1985). Public policy and industrial development in Southern Italy: anatomy of a dependent economy . International Journal of Urban and Regional Research 9, 47--81. Perna, A. (1994). Lo sviluppo insostenibile. Napoli: Liguori. Podbielski, A. (1976). Twenty-Five Years of Special Action for the Development of Southern Italy. Milano: Giuffre´. SVIMEZ (1993). I conti economici del Centro-Nord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino. SVIMEZ (2000). Rapporto 2000 sull’economia del Mezzogiorno. Bologna: Il Mulino. SVIMEZ- (2006). Rapporto 2006 sull’economia del Mezzogiorno. Bologna: Il Mulino. Trigilia, C. (1992). Sviluppo senza autonomia. Effetti perversi delle politiche nel Mezzogiorno. Bologna: Il Mulino.
Relevant Websites http://www.dps.mef.gov.it DPS–Dipartimento per le Politiche di Sviluppo, Ministero dello Sviluppo Economico. http://www.formez.it FORMEZ. http://sviluppolocole.formez.it FORMEZ. http://europa.formiz.it/ FORMEZ. http://www.svimez.it SVIMEZ.
Glossary Cassa per il Mezzogiorno The Cassa per le Opere Straordinarie di Pubblico Interesse per il Mezzogiorno (‘fund for extraordinary works of public interest for the Mezzogiorno’), in short, Cassa per il Mezzogiorno, was the agency established by the Italian government in 1950 with the task of implementing the Intervento Straordinario, a special program of public investment in support of Southern Italy. The Cassa had planning and financial autonomy and was reauthorized several times, until its termination in 1984. Although the experience of the Tennessee Valley Authority in the USA was well known in Italy, it did not inspire the Cassa’s institutional architecture, which was rather in continuity with the Fascist practice of special institutions. Intervento Straordinario (IS) The term means special or extraordinary intervention and refers to the set of financial provisions and policy measures established by the Italian government – in addition to ordinary public spending – to support the development of Southern Italy. Established in 1950, it was terminated in 1992. Its chief institution until 1984 was the Cassa per il Mezzogiorno, often confused with the IS itself. After the Cassa, the IS operated with a more articulated institutional architecture regulated by the Law 64/1986. Mezzogiorno The word means noon in Italian and refers to the Southern part of the country. It includes 8 of the 20 Italian administrative regions accounting for about 40% of the Italian territory and 35% of the national population. The roots of its underdevelopment lie in the very different historical trajectory of the region, which had a mostly colonial status up to the eighteenth century. Even after the political unification of the Italian peninsula in 1861, and throughout World War II, the Mezzogiorno was characterized by a semi-feudal economic and social structure, which hindered any bourgeois revolution and capitalist development. Because of the magnitude of the problem and means deployed, the Mezzogiorno and the policies established to support its development have become a paradigmatic case in regional studies. Southern Question The term (Quistione Meridionale in Old Italian) synthesizes the multiple issues related to the underdevelopment of the Mezzogiorno. It became internationally known through the works of Antonio Gramsci (1891–1937), who provided a Marxist but very original analysis of the historic social bloc – an alliance between the Italian northern industrial bourgeoisie and the southern landed aristocracy – that contributed to
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reproduce southern underdevelopment after the unification of the country and throughout the Fascist regime. Third Italy The term was used for the first time by Italian sociologist Arnaldo Bagnasco in his 1977 book Le tre Italie (The three Italies). Bagnasco stressed that, in between the traditional dualistic portrait of the Italian economy – the industrialized north based on large firms and the lagging agricultural south – a third model, that is, the Third Italy, was to be acknowledged in the northeastern and central regions, based on a diffused and articulated system of small firms. His work together with that of Italian economists Giacomo Becattini and Sebastiano Brusco on industrial districts became internationally known in the 1980s, spurring a whole new approach to regional development. However, while the above authors cast the highly specific territorial models of production and reproduction of the Third Italy into an articulated institutional approach, their work was vulgarized by other scholars, who put forward a universal normative local development model.
Introduction The Cassa per il Mezzogiorno was a public agency created by the Italian government in 1950 to carry out the Intervento Straordinario (IS), a special program of additional public investment directed to the historically lagging southern region (Figure 1) of the country (40% of the national territory and 35% of national population). Initially funded for a 10-year period, the Cassa was refinanced several times, becoming the main arm of Italian regional policy for over 30 years, until its suppression in 1984. The IS outlived the Cassa, with a different institutional architecture, until 1992, when dedicated national financial support for the Mezzogiorno was altogether ended. Because of its magnitude and duration, the IS attracted significant international attention and the Cassa became a renowned model of regional developed agency. However, its impact on the Mezzogiorno has lately become controversial. Since the early 1980s, mainstream opinion portrays the Cassa – and the overall IS – as an epochal failure. Not only did it supposedly fail to bridge the north–south economic divide, but it also allegedly helped create in the South a distorted, inefficient, and corrupt regional development model, based on the clientelistic and parasitic redistribution of public expenditures. The termination of the Cassa in 1984 was thus saluted as a
Cassa per il Mezzogiorno
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Milano Torino
Genova
Abruzzo Roma
L'aquila Campania Napoli
Molise Campobasso Puglia Bari Basilicata Potenza
Sardegna
Calabria Cagliari
Catanzaro Palermo Sicilia
Figure 1 The Mezzogiorno of Italy.
necessary step to restore market mechanisms and make the South take its destiny in its own hands. Such a reading, however, is higly reductionist and ideologically biased, as it is carried out through the lens of the new local development theories and discourses. Policies must be evaluated in their specific historical and geographical context and looking at their actual objectives. To this purpose, the article that follows re-traces the evolution of the Cassa per il Mezzogiorno, taking into account the development paradigms of the time, the national conditioning context in terms of both regulation and accumulation, the aims of policy, as well as the changes in the southern economy and society. In this articulated perspective, the evaluation of the Cassa’s impact on the Mezzogiorno turns out inevitably more nuanced and rather positive.
Rise and Decline of State Intervention in Southern Italy: The Cassa per il Mezzogiorno Three main policy phases can be identified in the evolution of the Cassa per il Mezzogiorno: (1) the pre-
industrialization phase (1950–57); (2) the active industrialization phase (1958–75); and (3) the crisis years (1976–80). The Pre-industrialization Phase (1950–57): Agrarian Reform and Public Works In the first phase, policy for the Mezzogiorno was limited to sustaining regional employment and income, while improving the external conditions of accumulation. The economic and political debate
At the end of World War II, a major focus of the economic and political debate in the newborn Italian republic was the role of the state in a perspective of trade liberalization and international capitalist integration. The Right-wing parties were against any form of State intervention, whereas the Left-wing coalition was in favor of planning and of structural institutional reforms. With regard to the Mezzogiorno, except for the extreme right, most political forces favored some form of public action to deal with the severe unemployment and poverty problems of the region and to modernize its very
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backward productive structure. Partly drawing on Gramsci’s analysis of the Southern Question, the Left and some of the Moderates stressed the need for an agrarian reform and for an industrialization program. The latter view was especially advocated by the SVIMEZ – Associazione per lo Sviluppo dell’Industria nel Mezzogiorno, a research association funded in 1946 by prominent Italian intellectuals and economists and still active in promoting studies and initiatives.
employment and income, thereby activating local multiplier effects; and (2) improving the environment for private investment through infrastructural investment and agricultural modernization. The operational architecture of the IS was highly centralized: a special State agency was created, the Cassa per il Mezzogiorno, with the exclusive authority to design, finance, and implement such investment programs, in addition and in close coordination with ordinary public expenditures.
Politics and policies
Policy implementation
The first Right-Center Republican government, elected in 1948, adopted a noninterventionist approach, but could not avoid tackling the problem of the South, where episodes of land occupation and bloody clashes with the police had occurred. In 1950, two important measures were authorized: a partial agrarian reform and the Intervento Straordinario (IS), a special program of public works. Both measures had economic, but also political consensus objectives. It was in these early years that the Italian style of developmental state was established, through what has been called a ‘compromise without reforms’: no structural changes of the ordinary State apparatus were implemented, whereas an extensive use was made of special public institutions. The agrarian reform aimed at modernizing the feudal structure of southern agriculture, by expropriating the most unproductive portions of the large estates (latifundia) and redistributing them to landless peasants in the form of small holdings. It also contributed to defuse the potentially subversive aggregation of such peasants, transforming them into a new class of small landowners. The IS was initially conceived as a true Keynesian program of public works, a compromise with the northern industrial interests, which opposed any strategy of southern industrialization. It had two major aims: (1) sustaining
Throughout the 1950s, regional policy for the Mezzogiorno was rather efficient and effective, also because of its independence from cumbersome ordinary spending procedures. Within the agrarian reform, about 650 000 ha were expropriated and assigned to landless peasants. With regard to the IS, the quasi-totality of the Cassa’s expenditures in this phase went to public works (Table 1), the majority of which was in support of agricultural modernization (land reclamation, irrigation systems, rural infrastructure) and the rest for civilian infrastructure (transport, aqueducts, sewage). Investment programs were relatively integrated, extraordinary expenditures effectively additional to ordinary spending, and infrastructures of a high engineering quality.
Table 1 Periods
1950–57 1958–65 1966–70 1971–75 1976–80 1981–86 1987–92
Economic and social transformations
In these years, the Mezzogiorno experienced important changes, although not as radical as those of the subsequent decades. The agrarian reform contributed to relieve the unemployment pressure and to increase agricultural production and productivity, although it could not prevent a massive exodus of rural population from the mountains and the most marginal areas. The program of public works was in turn quite successful in sustaining both
Expenditures by the Intervento Straordinario in the Mezzogiorno 1950–92 Direct expenditures by the Cassa and the Agency (Law 64/1986)
Direct investment in infrastructure (%)
Financial incentives to investment (%)
Other measures (%)
84.8 55.8 42.8 52.7 66.3 72.8 47.5
4.8 16.7 33.8 34.1 26.1 19.7 24.2
10.4 27.5 23.4 13.2 7.6 7.6 12.4
Transfers to regional and local administrations (%)
Total expenditures (%)
Average annual expenditures (billion liras at constant prices 1992)
Total expenditures by the Intervento Straordinario as a % of Italian GDP (current prices)
– – – – – – 15.9
100.0 100.0 100.0 100.0 100.0 100.0 100.0
2295.8 3582.3 4893.4 8226.9 9753.0 8051.4 7708.5
0.70 0.74 0.70 0.90 0.90 0.65 0.53
From Marciani, G. E. (1993). La spesa della Cassa e dell’Agenzia per il Mezzogiorno nei quarantatre anni dell’Intervento Straordinario. Rivista Economica del Mezzogiorno 3, 673–689; SVIMEZ (1993). Rapporto 1993 sull’economia del Mezzogiorno. Bologna: Il Mulino.
Cassa per il Mezzogiorno
employment and income. It also achieved important multiplier effects, as the increased local demand spurred a temporary growth in the local manufacturing of consumer goods, still sheltered from external competition. In fact, despite the rapid growth of the north, the gap between the two parts of the country did not increase: throughout the 1950s, the region’s per capita GDP and per capita consumption remained a stable proportion of the north-central values (respectively 53–55% and 61– 62%). Per capita investment actually increased from 55% to 62%, as a result of public works (Table 2). Southern employment remained stable (Table 3): the heavy losses in agriculture were compensated by significant increases in the construction sector (owing to public works) and in manufacturing (as a consequence of the increased local demand). However, southern unemployment pressures were mostly relieved by out-migration: between 1951 and 1961, 2 054 000 people (12% of the southern population!) left the Mezzogiorno, initially bound to North America, Australia, and Northern Europe and later in the decade to feed the ‘economic miracle’ in Northern Italy. While supporting the economy of the Mezzogiorno, the IS in this period achieved a major historical transformation of the southern social basis: the unproductive agrarian aristocracy – a pillar of the post-unification historic social bloc described by Gramsci – was substituted by a new social basis of consensus, formed by the new class of small landowners, the petty bourgeoisie of
Table 2 Per capita GDP, consumption, and investment in the Mezzogiorno, as a % of north-central Italy, 1950–1996 Years
Per capita GDP in the Mezzogiorno as a % of N-C Italy (current prices)
Per capita household consumption in the Mezzogiorno as a % of N-C Italy (constant prices)
Per capita gross investment in the Mezzogiorno as a % of N-C Italy (constant prices)
1951 1956 1960 1964 1969
53.4 55.2 53.1 56.5 58.0
61.4 61.2 62.0 64.2 66.1
55.2 62.2 62.0 72.8 77.6
1971 1974
61.3 60.7
69.9 71.3
91.8 84.2
1980 1986
57.8 58.0
69.7 70.6
71.6 73.3
1992 1996
58.0 55.6
69.7 66.7
63.5 57.8
From Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino; SVIMEZ (1993). I conti economici del Centro-Nord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino; SVIMEZ (1999). Rapporto 1999 sull’economia del Mezzogiorno. Bologna: Il Mulino; SVIMEZ (2006). Rapporto 2006 sull’economia del Mezzogiorno. Bologna: Il Mulino.
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the expanding retail and service sector, as well as the local administrative bourgeoisie, subordinate to Central State policy choices. In these years, the south began to be integrated in the national accumulation model, albeit with a still passive role: as a reservoir of labor force, as an outlet for construction materials and equipment manufactured in the north, and as a basis of consensus for the hegemonic national political parties. The Industrialization Phase (1958–75): Growth Poles and Exogenous Fordist Investment At the end of the 1950s, a major turn occurred in regional policy, with the beginning of an active industrialization strategy. This shift was explained by several concurrent factors: new developments in the economic debate, the changed national political conditions, and the take-off of the Italian economy – the so-called ‘economic miracle’. The economic and political debate
Starting in the late 1950s, the international economic development and policy debate was increasingly framed in the positivist paradigm of growth, industrialization, and modernization. At the same time, the Central State began playing a growing role in many European countries, actively supporting national accumulation through measures well beyond traditional macroeconomic policy – direct ownership in strategic sectors, infrastructural investment, support of national industries – and featuring what has been called the developmental state. In the same years, the issue of regional inequalities also came to prominence through the works of economists such as Myrdal and Hirschman, while theories such as the ‘big push’ by Rosenstein Rodan and the ‘growth pole’ by Perroux strongly informed regional policies. In the course of the 1960s, many regional development agencies and programs were established throughout Europe. Politics and policies
In Italy, a Center-Left government coalition was formed in the early 1960s, creating the conditions for implementing such new approaches. The 1960s and 1970s were thus characterized by the national economic programming experience, a growing role of State holdings in strategic industrial sectors (steel, chemicals, energy) fueling the economic miracle, and the direct support of southern industrialization, despite the continued resistance of northern industrial groups. The economic miracle, in turn, allowed for greater public expenditures and increased allocations to the IS. The 1960s also witnessed a progressive strengthening of the labor movement, with two major waves of conflicts
450 Table 3 Periods
Cassa per il Mezzogiorno
Variations (%) in employment, 1951–80 Total employment
Manufacturing Employment
Construction employment
Mezzogiorno
North-central Italy
Mezzogiorno
North-central Italy
Mezzogiorno
1951–59 1959–69
0.5 7.0
5.8 3.8
19.4 3.0
17.6 13.7
63.7 32.2
44.1 10.3
1970–75 1975–80
2.1 6.5
4.2 6.8
10.9 11.0
3.4 4.5
4.7 4.9
14.6 0.5
North-central Italy
From Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino; SVIMEZ (1993). I conti economici del CentroNord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino.
and strikes: the first in 1962–63, leading to the establishment of collective bargaining procedures at firm level and some wage increases; the second in 1969–70 (the socalled Hot Autumn), characterized by a much larger social mobilization for social reforms. The new industrialization strategy for the Mezzogiorno was enacted through several legislative steps (Box 1). The Cassa per il Mezzogiorno was reauthorized and its funding were further increased. In addition to infrastructural investment, a robust program of very generous financial incentives to industrial investment and a growth-poles strategy were launched. Initially geared to small and medium firms, the incentives were progressively extended to large corporations. A major institutional change occurred in 1970 with the establishment of the long-delayed regional governments. This administrative decentralization involved a slight reorganization of the IS, shifting some project formulation responsibility from the Cassa to the newly established southern regional governments (Box 1). Policy implementation
The increased state effort in sustaining southern industrialization was clearly reflected in the Cassa’s expenditures. Average annual spending almost tripled and increased also as a share of total national resources. The lion’s share now went to industrial incentives, but spending on infrastructure remained relevant in absolute terms (Table 1). On the other hand, the additional character of the IS expenditures in this period significantly declined, as public works financed by the Cassa ended up substituting for ordinary infrastructural investment. Moreover, starting in the late 1960s, the management of both the IS and the state-holding system began losing autonomy and was progressively conditioned by national politics. Economic and social change
Throughout the 1960s, the Italian economy achieved impressive growth rates, which brought the country among the top five industrialized nations of the world. Italian industrial capital was now characterized by a bipolar structure – the large private northern industrial groups – mostly operating in the north-west – and the
increasingly powerful state holdings – which followed a more articulated locational strategy. Both the economic miracle and the industrialization policy had a powerful impact on the Mezzogiorno. This was the period of the ‘great transformation’, when the southern economy and society were rapidly modernized and fully integrated into the Italian capitalist model – when the gap between the region and the rest of the country, according to basic macroeconomic indicators, was significantly reduced for the first and last time (Table 2). The years 1960–75 can indeed be considered the golden age of southern industrialization. From an average 16% of national industrial investment in the 1950s, the Mezzogiorno’s share reached a peak of 33% in 1970–73 (Table 4). Manufacturing investment was prevailingly of exogenous origin, but its composition evolved over time. Two main waves can be identified. In the 1960s, it was mainly the State holdings – which were locationally footloose and needed capital to fuel their expansion – that exploited the financial incentives for very large investment projects in the steel, chemical, and petrochemical sectors. However, in spite of such massive investment and the thousands of jobs created in the new factories, southern manufacturing employment in this decade declined ( 3% compared to þ 14% in the rest of the country), as a consequence of the crisis of small local firms (Table 3). In fact, with the improvement of transport infrastructure, the more competitive consumer goods manufactured in the north flooded the south and wiped out local production. The continued expansion of the construction and service sectors only partially compensated for these losses. In this decade, although international migration declined, internal migration continued: between 1961 and 1971 another 2 000 000 people left the Mezzogiorno and migrated to the large cities of north-central Italy. The second industrialization wave occurred in the first years of the 1970s. This time, large private northern firms operating in the automobile, electromechanical equipment, and other modern sectors began to exploit industrial incentives for relocating production in the Mezzogiorno. It was a late-Fordist strategy to evade the labor conflicts in the north and exploit the less-unionized
Cassa per il Mezzogiorno
Box 1 Italian regional Mezzogiorno 1950–92.
policy
for
the
The Cassa per il Mezzogiorno (1950–80) 1950–57. The pre-industrialization phase: Public works and agrarian reform. The first phase of regional policy for the Mezzogiorno – the so-called Intervento Straordinario – was regulated by the Law 646/1950, which established the Cassa per il Mezzogiorno, and by the subsequent Law 949/1952. The Cassa was to design, finance, and implement a 10-year program (later extended to 12 years) of extraordinary public works. The program was aimed at the modernization of agriculture (land reclamation, hydrogeological stabilization, irrigation systems, creation of rural centers), in close connection with the agrarian reform, and at the creation of basic civilian infrastructures (roads, sewage, water supply). 1958–75. The active industrialization phase: Industrial incentives and industrial development areas In 1957, the Law 634/1957 extended the life of the Cassa until 1965 and almost doubled its budget. It also introduced important new measures in support of industrialization: *
*
*
a system of financial incentives to industrial investment (grants and subsidized loans to industrial firms investing in the Mezzogiorno); initially geared to small and medium firms, the incentives were later extended to any size of investment (Laws 555/1959 and 1462/1962), in order to accommodate large firms’ investment projects; the promotion of industrial development areas (Aree di Sviluppo Industriale and Nuclei di Sviluppo Industriale) among consortia of municipalities, which would be privileged in the granting of financial incentives to industrial investment, as well as infrastructural investment; a reserve clause, that is, the obligation for all statecontrolled firms and institutions to place at least 40% of their total investment and 60% of their new investment in the south, as well as the obligation for public institutions to purchase at least 30% of their inputs from firms located in the south.
The legislation also established a new Ministries Committee for the Mezzogiorno, with the task of coordinating extraordinary intervention with ordinary expenditures. In 1965 the Law 717/1965 extended the life of the Cassa until 1980 and re-financed its activities for further five years. Industrial incentives and industrial development areas were confirmed, but action in the Mezzogiorno was to be integrated into the national economic programming framework, therefore brought under the coordination of the CIPE (Interministry Committee for Economic Programming). Moreover, starting in 1969, very large industrial investment projects had to be negotiated with the Interministry Committee and could obtain incentives above the usual standard. Finally, since the Cassa spending over the last period of operation had ended up substituting for ordinary expenditures, the new legislation emphasized that the Intervento Straordinario was to be additional to the normal share of public spending in the south. In 1971 the Law 853/1971 refinanced the Cassa for another 5 years and introduced a number of important innovations, among which was the transfer of some policy responsibilities to the newly formed regional governments: *
the link with national economic planning was re-enforced; the Ministries Committee for the Mezzogiorno was abolished and its coordinating duties taken up by the
*
*
*
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CIPE (Interministry Committee for Economic Programming); large industrial groups had to obtain the CIPE approval for any large scale investment project on the national territory (the first attempt to establish concertation between large firms and the state, through the contractual agreement formula); infrastructural projects received new emphasis in the form of Special Projects, that is, large, intersectoral, integrated projects of regional or interregional interest. the task of designing Special Projects and proposing them to the CIPE for approval was entrusted to regional governments; to this end, a new Committee of the Presidents of Southern Regional Governments was established, while the Cassa was to provide technical assistance.
1976–84. After the crisis In 1976 the Law 163/1976 refinanced the Cassa per il Mezzogiorno until 1980. Among the new features were: *
*
* *
further fiscal exemptions for industrial firms investing in the south; a new form of financial incentive to support the creation of industrial employment, that is, a 10-year full subsidization of social security payments for any new industrial job created; a further focus on special projects; the explicit mandate to the Cassa to provide technical assistance and consulting to those regional government that requested it.
The Law 64/1986 (1985–93) The Law 64/86 defined the new organic discipline and resources of the Intervento Straordinario in the Mezzogiorno for 9 years (1985–93). In organizational terms, it introduced a distributed system of responsibilities: 1. A new Department for the Mezzogiorno was to be established within the Ministry of the Mezzogiorno, with the following tasks: strategic formulation of sectoral priorities and budget allocation; evaluation and approval of investment projects submitted for financing; and coordination of extraordinary and ordinary expenditures. 2. A new Agency for the Mezzogiorno was also established, with the limited task of managing the funds allocated by the Department. Once programs and projects were approved by the Department, the Agency had to draft contracts with the entitled subjects and proceed to payments. 3. Regional and local governments were fully entrusted with the task of formulating local development programs and drafting investment projects, as well as implementing such programs and projects once approved by the Department and funded. Content-wise, the new legislation significantly enlarged the domains of policy intervention, including industrial restructuring, business services, research and development, technological innovation, and training. The existing toolkit of financial incentives was mostly confirmed: individual firms could apply for financial incentives, but big firms could negotiate large scale investment directly with the Department, through the Contratti di Programma. With regard to major infrastructural projects, involving different government levels, Accordi di Programma could be drafted and submitted to the Department. The reserve clause for state enterprises and institutions was also reconfirmed.
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Table 4 Investment in the Mezzogiorno as a % of Italy, 1951–1999 Periods
Gross total investment in the Mezzogiorno as a % of Italy
Gross industrial investment in the Mezzogiorno as a % of Italy a
Gross manufacturing investment in the Mezzogiorno as a % of Italy
1951–59 1960–64 1965–69 1970–73 1974–80 1981–92 1993–99
24.5 26.2 28.1 32.0 30.8 28.7 23.4
15.8 23.5 25.4 33.0 27.7 – –
– – – 30.6 23.5 17.6 17.1
a
Includes the construction industry. From Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino (current prices); SVIMEZ (1993). I conti economici del Centro-Nord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino (constant prices 1985); SVIMEZ (2000). Rapporto 2000 sull’economia del Mezzogiorno. Bologna: Il Mulino (constant prices 1990); SVIMEZ (2006). Rapporto 2006 sull’economia del Mezzogiorno. Bologna: Il Mulino (constant prices 1995).
workforce of the South. This time, manufacturing investment yielded a quite relevant employment increase ( þ 11% between 1970 and 1975), for the first time higher than in north-central Italy (Table 3). In this policy phase, the Mezzogiorno performed two new functions within the national accumulation model: it represented a subsidized investment terrain for the expanding and, later, relocating national Fordist corporations, as well as a market outlet for northern consumer products. The southern social structure was further profoundly transformed: a modern working class was created in the new Fordist factories, while a service middle class formed as a consequence of the further expansion of both collective and private services. By the mid-1970s, the south was fully integrated into the national affluent consumption model. Particularly relevant was the rise of relatively powerful local social blocs – made of the local political and administrative bourgeoisie, professionals, real estate and construction interests – lobbying for central state funding and subordinately ingrained in the growing political management of the IS, through the national party system. After the Crisis (1976–80): The End of Late-Fordist Industrialization The economic crisis of the mid-1970s, as we now know, marked an epochal change. It was the end of the Fordist– Keynesian model of accumulation, based on mass production, industrial growth, and expanding public expenditures. Politics and policy
In Italy, the radicalization of social conflicts and the end of the Fordist growth starting with the first oil shock of
1973 eventually sapped the national economic programming ambitions and the IS, bringing down the overall accumulation model. However, the structural character of the crisis was not immediately perceived. At the national level, depressive macroeconomic policies were implemented to reduce inflation, which caused a major economic downturn. Later programs to support industrial restructuring were mostly used by firms in declining sectors to subsidize redundant employment. The state-holdings system was burdened with rescue operations – that is, the acquisition of collapsing private firms – and employment support. With regard to the Mezzogiorno, the Cassa was refinanced in 1976 for the last time. The only relevant innovations were a new subsidy to employment creation and a further involvement of regional governments (Box 1). In 1980, the Cassa was due to expire, but its operations were repeatedly extended until 1984, when it was eventually terminated. The IS was to continue through a radically revised institutional architecture. Policy implementation
Despite the economic crisis, the Cassa’s expenditures in the last part of the 1970s further increased (Table 1). They mostly went into infrastructural investment, whereas industrial incentives, after the peak of 1971–75, declined and mostly concerned the completion of previous projects. On the organizational side, although since 1971 the Cassa was supposed to shift some policy formulation responsibilities to the regional governments and evolve into a technical assistance agency, the transitional norms limited the transfer of competences by allowing the Cassa to complete all previously approved projects. On their side, the new regional administrations exhibited little technical capabilities and political willingness to take over a more propositional role. Economic and social transformations
The years following the 1974–75 downturn – the worst since the Great Depression – were characterized in the entire industrialized world by the beginning of a profound industrial restructuring process. In the Mezzogiorno, the crisis meant the abrupt interruption of the Fordist industrialization process led by exogenous manufacturing investment. On the other hand, partly as a consequence of the industrialization policy, a revival of local entrepreneurial capabilities was observed, with the start-up of several new small and medium firms, manufacturing either consumer goods or components for the exogenous plants. In fact, the 1970s were, on the whole, a very positive decade for southern employment (Table 3). Between 1971 and 1981, while out-migration virtually ended, about 150 000 manufacturing jobs were generated, 40% of which in the large establishments (>500 employees)
Cassa per il Mezzogiorno
created by Fordist investment. Employment in services continued to expand, especially in the public sector, also as a consequence of the new regional administrations, whereas construction employment declined. Social change in the south during the second-half of the 1970s was also relevant. The national political mobilization for greater democracy and social justice, that since 1968–69 had spread from factory workers to groups of the growing middle class, had reached its peak in the mid-1970s and involved for the first time also the Mezzogiorno. The success of the Left in the 1975 and 1976 elections was achieved to a large extent with the support of the traditionally conservative south. But precisely when the above processes of social modernization and entrepreneurial awakening were gaining momentum, they were undermined by the escalation of terrorism, on the other hand, and the economic crisis, on the other hand. The end of growth and the degeneration of politics in the subsequent decade would shatter the new-found mobilization of southern society. In this last policy phase, the functional role of the south in the national accumulation model was significantly reduced: no longer a reservoir of labor, neither a subsidized terrain for industrial expansion, the Mezzogiorno remained a mere pool of electoral consensus. The further empowerment of regional governments, in a context of faltering market mechanisms, contributed to reinforce the local power blocs and their political management of public expenditures. Hiring procedures, the granting of permits, and public budget allocations were increasingly used to strengthen local political control.
State, Regional Policy, and Southern Development in the Cassa’s Years: An Assessment Between 1950 and 1980 the Mezzogiorno experienced the most dramatic transformation of its history, at a pace and to an extent that can only be understood now, in a historical perspective. In 30 years – less than half a lifetime – the Mezzogiorno evolved from an agricultural, semi-feudal, poverty-stricken society into a modern, partially industrialized, and relatively affluent society. The region was fully integrated – although still in a dependent fashion – into the national model of capitalist accumulation, mass consumption, and welfare. The gap with the rest of the country in terms of production, consumption, investment, physical and social infrastructure, although it remained important, was significantly reduced (Table 2). How much was such an impressive change the result of the Cassa per il Mezzogiorno action? Evaluating the latter’s impact is difficult, for two reasons. First, in policy
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evaluation it is not easy to isolate the actual effects of programs from what would have happened independently of them; second, the current debate is highly ideologically biased. The widely accepted view – even in Left-wing circles – is that the Cassa per il Mezzogiorno – and the IS in general – was an epochal mistake: at best, it was a waste of public resources, which created cathedrals in the desert, prevented the release of the region’s endogenous entrepreneurial potential, and failed to generate a selfsustaining development model; at worst, it was the chief cause of the parasitic, clientelistic, and corrupt degeneration of southern society. Only few observers and public actors – considered nostalgic – stoutly defend the action of the Cassa and the intervention of the state in the Mezzogiorno. Between these two extremes, there is room for a more dispassionate and nuanced assessment, that is, contextualizing the Cassa’s operations with regard to the specific historical period, the contingent problems of the Mezzogiorno, and the actual objectives of regional policy. Three aspects shall be considered: (1) the Cassa’s approach and tools (2) its impact, and (3) its organizational structure. In what concerns the toolkit, the Cassa per il Mezzogiorno was an advanced product of its time. Its approach to development and its actual programs were coherent with the contemporary scientific and policy paradigm, centered on growth, infrastructural investment, industrialization, and modernization. Most importantly, they were consistent with the contemporary Fordist accumulation model, based on transport infrastructure and vertically integrated mass production. Also, the use of state holdings as growth engines was in line with practices adopted in many European countries. In what concerns the actual impact of the Cassa’s programs, despite the above-mentioned methodological difficulties, several results are above dispute. In the first 20 years, infrastructural investment was very effective in improving the economic and social environment of the Mezzogiorno, in reducing communication and transportation disparities, and in logistically integrating the two parts of the country, while fulfilling the Keynesian objectives of employment and income support. In a period when the north was growing at an accelerated pace, the IS was able to pull the Mezzogiorno along, so that the divide did not increase. As to the industrialization strategy, policy was undoubtedly successful in creating a modern manufacturing basis. Industrial investment in the Mezzogiorno steadily increased in absolute and relative terms throughout the 1960s, reaching a peak in the early 1970s and bringing the productive structure of the region very close to that of the rest of the country: at the end of the 1970s, industrial employment had reached 29% of total southern
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Cassa per il Mezzogiorno
employment, compared to 39% in north-central Italy, whereas services accounted for 48% and 52%, respectively. Some observers have criticized the limited support to local firms, but without the investment by state holdings and exogenous Fordist firms, an industrialization process of that magnitude could not have occurred. The fact that such a late-Fordist industrialization model came to an end, then, can hardly be blamed on the Cassa per il Mezzogiorno, since the crisis of the accumulation regime involved the whole country and factories closed down in the south as well as in the north. The south was worst hit because of its still young and fragile socioeconomic structure. From the point of view of the institutional architecture, the excessively independent and centralized structure of the Cassa has been blamed because it was prone to discretionary behavior and prevented the empowerment of local administrations. This was actually a conscious choice, dictated by the urgency of the southern problems after World War II and the need for agile and coordinated action, which could not have been ensured through the ordinary administration of the state, or by the weak local authorities. The Cassa was the natural and most effective solution within the developmental state approach of the Fordist–Keynesian regime, as proved also by its implementation records. Finally, in evaluating the impact of the Cassa one should also consider that the amount of additional state resources devolved to the Cassa, for the Mezzogiorno were never truly additional. Repeatedly – in the 1960s and 1970s – the Cassa’s investment in the Mezzogiorno substituted for the due share of infrastructural investment by the ordinary administration of the state. This said, a number of negative side effects must also be mentioned. First, the success of a special institution such as the Cassa was contingent upon the commitment and technical capabilities of its staff. When technocrats began to be substituted by political appointees and politics began prevailing over economic strategies, the Cassa’s expenditures – as in other state institutions – lost effectiveness. Second, the choice of a special, centrally managed state did contribute to de-legitimize ordinary state procedures and to consolidate the passive and subordinate role of the local administrations it was to surrogate for. When politics took over in the late 1970s, the centralized institutional architecture of the Cassa – although it cannot be considered a cause – certainly became functional to the formation of a clientelistic local administrative culture. In conclusion, regional policy implemented by the Italian government through the Cassa per il Mezzogiorno was a powerful and quite effective financial and technical effort, consistent with the theoretical and policy paradigms of the time. Most importantly, the IS was coherent with the Italian accumulation strategies of the Fordist–
Keynesian period, in which the Mezzogiorno did have a functional role. Without such an effort the Mezzogiorno would certainly have been left behind. On the other hand, the very exogenous character of the Cassa’s action, while functional to quickly producing convergence – via infrastructure, industrialization, modernization, and integration – also undermined the sustainability of the ‘great transformation’ it had engineered. The end of the national accumulation model that had fueled this convergence occurred too early to allow the socioeconomic model established in the Mezzogiorno to survive on its own legs.
Epilog In the whole Western world, the 1980s was a period of transition, marked by the demise of the developmental state approach, the rise of neoliberalism, and the search for a new balance between regulation and accumulation. Squeezed in between heightened international competition and increased internal conflicts, and failing to identify a new national accumulation strategy, the Italian state abdicated its developmental role. Economic policy became defensive and piecemeal. State holdings were increasingly politically controlled, betraying their original strategic role. The overall management of public expenditures was progressively bent to gain political consensus, rather than support accumulation. It is in this decade that corruption in the assignment of public contracts reached unprecedented levels – in the north and the south alike – and a huge public debt was accumulated, eventually leading to the Tangentopoli scandal and the fiscal crisis of the State in the early 1990s. As to regional policy, 2 years after the termination of the Cassa and after a difficult parliamentary debate, the Law 64/1986 was approved, establishing new rules for the IS. It was the last – half-hearted – attempt to reform Italian regional policy, trying to take into account both the changed features of post-Fordist accumulation and the need to fully decentralize policymaking to regional and local governments, while maintaining central coordination (Box 1). Although sound on paper, the new IS legislation was the death rattle of Italian regional policy. Delays in the organizational restructuring and systematic underfunding undermined the implementation of the new policy framework, while, on their side, regional and local governments exhibited a protracted resistance to give up their passive roles of recipients of central state transfers and to take over the new managerial role expected from them. By the end of the 1980s, as the neoliberal ideology gained consensus with its corollaries of deregulation and privatization, the IS had become the culprit for all the Mezzogiorno’s evils. Pressures to abolish national
Cassa per il Mezzogiorno
top-down regional policy and establish decentralized bottom-up programs in tune with the new local development theories came from within and from without. On the one hand, small and medium firms operating in central and northeastern Italy – the so-called Third Italy, of which industrial districts were the nobler and most popular version – had substituted Fordist corporations in both the Italian accumulation model and development discourses, endorsing the rising paradigm of local development. The northeastern component of small firms had actually found a political voice in the new federalist party Lega, which strongly opposed any redistributive policy in favor of the south. On the other hand, the 1988 reform of the European structural funds and the beginning of European cohesion policies undermined the legitimacy of national regional policies deemed to distort competition. In this hostile economic and political context, made all the more difficult by the fiscal crisis of the state and the constraints imposed by the Maastricht Treaty, the Mezzogiorno no longer fulfilled any functional role. In 1992 – before its natural expiration – the IS was altogether terminated. The term Mezzogiorno disappeared from Italian official documents and was substituted by the Euro-term ‘lagging areas’. The southern question ceased to be a national question and became a local issue, to be dealt with by ordinary or European local development programs, which were extended to the overall national territory. The effect of this abrupt end of additional public investment in the Mezzogiorno was severe: by the mid1990s the gap between the two parts of the countries had resumed pre-industrialization levels (Table 2). Most importantly, unemployment soared and reached rates above 20%, that is, three times that of the rest of the country. This time it was no longer unskilled rural unemployment, but educated youth and women. National concern for the Mezzogiorno resumed in 1998 – once Italy had achieved the required conditions to enter the European Monetary Union – with the creation of the department for development policies (DPS), a structure within the Ministry of Economy and Finance charged with the task of coordinating structural funds resources and local development programs. But, 15 years after the termination of the IS and the decentralization of regional policy, the north–south divide has not yet abated. See also: Developmentalism; Fordism, Post-Fordism and Flexible Specialization; Growth Poles, Growth Centers;
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Industrial Districts; Industrialization; Local Development; Regional Inequalities; Regional Planning and Development Theories; Uneven Regional Development.
Further Reading Barbagallo, F. and Bruno, G. (1997). Espansione e deriva del Mezzogiorno. In Barbagallo, F., Barone, G., Bruno, G. et al. (eds.) Storia dell’Italia republicana, vol. 3, Tome II, pp 399–470. Torino: Einaudi. Barca, F. (ed.) (1997). Storia del capitalismo italiano dal dopoguerra ad oggi. Rome: Donzelli. Cafiero, S. (2000). Storia dell’Intervento Straordinario nel Mezzogiorno (1950–1993). Rome: Piero Lacaita Editore. Cafiero, S. and Marciani, G. E. (1991). Quarant’anni di Intervento Straordinario nel Mezzogiorno (1950–1989). Rivista Economica del Mezzogiorno 2, 249--274. D’Antone, L. (ed.) (1996). Radici storiche ed esperienze dell’Intervento Straordinario. Napoli: Bibliopolis. Del Monte, A. and Giannola, A. (1978). Il Mezzogiorno nell’economia italiana. Bologna: Il Mulino. Dunford, M. (1988). Capital, the State and Regional Development. London: Pion. Gramsci, A. (1978). Some aspects of the southern question. In Selections from Political Writings 1921–26, pp 441--462. London: Lawrence & Wishart. Graziani, A. (1978). The Mezzogiorno in the Italian economy. Cambridge Journal of Economics 2, 355--372. Graziani, A. and Pugliese, E. (eds.) (1979). Investimenti e disoccupazione nel Mezzogiorno. Bologna: Il Mulino. Marciani, G. E. (1993). La spesa della Cassa e dell’Agenzia per il Mezzogiorno nei quarantatre anni dell’Intervento Straordinario. Rivista Economica del Mezzogiorno 3, 673--689. Martinelli, F. (1985). Public policy and industrial development in Southern Italy: anatomy of a dependent economy . International Journal of Urban and Regional Research 9, 47--81. Perna, A. (1994). Lo sviluppo insostenibile. Napoli: Liguori. Podbielski, A. (1976). Twenty-Five Years of Special Action for the Development of Southern Italy. Milano: Giuffre´. SVIMEZ (1993). I conti economici del Centro-Nord e del Mezzogiorno nel ventennio 1970–89. Bologna: Il Mulino. SVIMEZ (2000). Rapporto 2000 sull’economia del Mezzogiorno. Bologna: Il Mulino. SVIMEZ- (2006). Rapporto 2006 sull’economia del Mezzogiorno. Bologna: Il Mulino. Trigilia, C. (1992). Sviluppo senza autonomia. Effetti perversi delle politiche nel Mezzogiorno. Bologna: Il Mulino.
Relevant Websites http://www.dps.mef.gov.it DPS–Dipartimento per le Politiche di Sviluppo, Ministero dello Sviluppo Economico. http://www.formez.it FORMEZ. http://sviluppolocole.formez.it FORMEZ. http://europa.formiz.it/ FORMEZ. http://www.svimez.it SVIMEZ.