More of a question than a post.
A while ago, after reading another interesting take on Italian politics describing the many failures of that state, which ascribed the 20 year-long stagnation in GDP/head to these, I wondered: hasn’t it always been thus in Italy? And in which case, why did Italy prosper so well before 1990?
Today, over lunch at the LSE, I got an interesting answer from a local. The argument was that state failures got much worse from the 1980s onwards. Left-wing terrorism prompted a political call to arms from a right-wing coalition in politics, which needed to orchestrate funding from business to buy votes to secure office to take action against the Red Brigade and similar. This flow of funds set off a weakening in control over how public funds were spent, and all the things we associate with the Berlusconi era.
This argument is to be contrasted with another which puts the stagnation down to the emerging economies, which stole markets from the previously successful niche manufacturing sectors in Italy.