UN’ANALISI ISTITUZIONALE DEL DECLINO DELL’ECONOMIA ITALIANA

This paper attempts an interpretation of Italy’s recent economic decline, which began two decades before the Great Recession. It argues that its deeper roots lie in the political economy of growth. This interpretation is illustrated through a discussion of Italy’s recent growth trajectory and of its politico-economic equilibrium. The emphasis is placed on the country’s convergence to the productivity frontier and TFP performance, and on the evolution of its social order and institutions. The lens through which this case is reviewed, to illuminate the origins and evolution of the current constraints to growth, is drawn from institutional economics and Schumpeterian growth theory. It is exemplified by analysing two alternative reactions to the insufficient provision of public goods: an opportunistic one—employing tax evasion, corruption, or clientelism as means to appropriate private goods—and one based on enforcing political accountability. From the perspective of ordinary citizens and firms such social dilemmas can typically be modelled as coordination games, which have multiple equilibria. Self-interested rationality can thus lead to a spiral, in which several mutually reinforcing vicious circles lead society onto an inefficient equilibrium characterized by low political accountability and weak rule of law.

Introduction: Italy’s Decline, the Existing Interpretations, and Our Hypothesis

This chapter summarizes the main analyses of Italy’s economic decline, discusses their limitations, and sketches the interpretation offered in this book. The discussion is set in the framework of Schumpeterian growth theory. It moves from the observation that during the 1980s Italy’s TFP performance began to diverge from that of its peers, andG that growth has been stagnant since the early 1990s. The existing interpretations identify the proximate causes of the country’s decline, not its deeper ones, nor do they satisfactorily explain why an unprecedented wave of structural reforms failed to reverse it. This chapter advances the hypothesis, explored in the book, that its deeper causes lie in the political economy of growth, for innovation and economic creative destruction can be hindered if political creative destruction is limited and the ensuing systemic constraints undermine institutional reform.

Schumpeterian growth theory: Empirical testing of barriers to competition effect

This study is dedicated to empirical testing of barriers to competition effect on productivity growth, taking into account the hypothesis that different policies improve economic growth in countries at different levels of technological development. The results of econometric analysis of two panel data sets comprising 144 countries (not controlled for education) and 128 countries (controlled for education) have demonstrated that when approaching the technology frontier, countries with high barriers to competition lose their productivity growth much faster than countries with a low barrier, which is the direct result of the decreasing but positive influence of barriers to competition on productivity growth, regardless of whether the economy is underdeveloped or advanced. This positive effect of barriers can be rationalized by Romer?s (1990) product variety model; or possibly by the inverted-U pattern between competition and innovation proved by Aghion et al. (2005), under the assumption that these sample countries are on the downward slope. Finally, the positive effect of barriers, irrespective of the degree of the countries? technological development, implies that the theory is not completely consistent with empirical data.

Lessons from Schumpeterian Growth Theory

By operationalizing the notion of creative destruction, Schumpeterian growth theory generates distinctive predictions on important microeconomic aspects of the growth process (competition, firm dynamics, firm size distribution, cross-firm and cross-sector reallocation) which can be confronted using rich micro data. In this process the theory helps reconcile growth with industrial organization and development economics.

Шумпетерова теорија економска раста: Предузетништво као одговор на економску стагнацију // Schumpeterian growth theory: Entrepreneurship - a response to the economic downturn

Резиме: Игнорисање и неразумијевање Шумпетеровог писања су главни разлози зашто је британско-америчка школа, као доминантна у контексту неокласичне економије, била и још увијек јесте одвојена од њемачке историјске школе. Међутим, Шумпетерове поставке су и данас релевантне будући да систем опште економске равнотеже нема праву теорију ендогеног или структуралног развоја коју је предложио Шумпетер. Његова теорија економског развоја може послужити као кохерентни одговор на марксистичку теорију. За Шумпетера, унутаркапиталистичка конкуренција у потпуности објашњава структурне промјене у економији. Он тврди да је конкуренција динамички процес разлика и борбе међу компанијама, а не статична конкуренција Валрасовог система. У Шумпетеровој властитој визији економског система, теорија економских циклуса и теорија раста су нераздвојне. Циљ овог рада је да кроз синтезу теоретских анализа потврди релевантност Шумпетерове теорије у контексту дигиталне економије.Summary: Ignorance and misunderstanding of Schumpeter’s writing are the main reasons why the Anglo-American School, as dominant in the context of neoclassical economics, was and still is separate from the German Historical School. However, Schumpeter’s arguments are relevant today because the system of general economic equilibrium has no adequate theory able to explain neither endogenous nor structural development proposed by Schumpeter. His theory of economic development can serve as a coherent response to Marxist theory. For Schumpeter, the intra-capitalist competition fully explains the structural changes in the economy. He argues that competition is a dynamic process of differences and struggles between companies, and not static competition as proposed by the Walrasian mathematical perfect model. Schumpeter argues that the theory of economic cycles and the growth theory are inseparable. The overarching aim of this paper is to through synthesize of theoretical analysis confirms the relevance of Schumpeter’s theory in the context of the digital economy.