Economic Policy in Italy since the 1960s
In Italy, economic policy was hardly taught or investigated as a discipline, at least until the mid-1930s. Most Italian economists followed the autarchic and corporatist credo dictated by the Fascist regime, thus being largely isolated from theoretical developments abroad.
Some of them were engaged in the administration of practical policies of the regime. Trade and colonial policy and law, as well as banking policy, were the main substitute of a systematic policy discipline. A minority of enduring pro-market economists, instead, were not inclined to accept Keynesian thought, and some of them migrated abroad.Because of this prevailing conformist attitude, Italian economic academia had thus exhausted the main innovative tradition characterising it at least until the ‘Great War' and had to import the seeds for new progress from abroad. In the early 1950s, practically only a few Italian scholars had introduced - or were about to introduce - Keynesian thought in Italy (Marrama 1948; Papi 1953; Franchini Stappo 1955; Di Fenizio various years). Even fewer Italian scholars had studied progress in welfare economics (Caffe 1953a, 1956a; Lombardini 1954; see also Caffe's translation of the papers on the ‘new' welfare economics: Caffe 1956b, Caffe's translation of Zeuthen 1958). This is apparently strange, as the ‘new' welfare economics was based on Pareto's foundations, and there were Italian economists, such as Luigi Amoroso, following Pareto's method, but only insofar as the use of mathematics for economic analysis was concerned. Pareto had a very extensive, if lagged, impact on the academic profession abroad, in particular, for what we are interested in in this book, not only for his welfare principle but also for laying down the tools of mathematical economics that contributed to the foundation of econometrics (Tinbergen 1949).
Similarly, very few Italian scholars had introduced the theory of economic policy in the form of either translations and preparation of updated textbooks (in addition to those already mentioned; see Marrama 1962) or reflections on foreign experiences in Western countries, particularly in the Netherlands, under the impulse of Jan Tinbergen (Caffe 1943b, 1946a, 1946b).
But some Italianjournals hosted either important original articles by foreign authors or their translations. This was the case for a number of contributions - by Frisch, Tinbergen, Theil and, outside the proper realm of economic policy, Shackle and even K. Godel - published in L'industria, a journal edited by F. Di Fenizio, and Metroeconomica, founded and edited by E. Fossati. The intellectual openness of the economists mentioned also was crucial in their propensity to encourage their pupils to complete their preparation abroad, even if mainly in the United Kingdom and the United States.By the beginning of the 1960s, all the premises existed in Italy for devising a consistent and rather autonomous set of propositions to fill the discipline of economic policy with new content. The only problem was about the weights to assign to the different possible ingredients. There were two main lines along which the discipline was systematically introduced by two scholars: in a rather loose form, Ferdinando Di Fenizio and, mainly, Federico Caffe.
Di Fenizio gave preeminent relevance to the theory of economic policy. Caffe searched for all the possible key ingredients for conceiving economic policy as an autonomous discipline. Indeed, as already said, he did so first by studying policy design and planning experiences in Western countries, including Italy, before 1958 and then by critically reviewing progress in the development of welfare economics, translating them into Italian and editing a collection of papers on the new welfare economics and the SWF, as well as editing the Italian translation of Zeuthen (1958).[24] Moreover, he finally published a textbook in two volumes on economic policy (Caffe 1966a, 1970). This followed to some extent the path of Zeuthen (1958), but with a more balanced weight of the various ingredients of the discipline.
A path to some extent similar to Caffe's was followed by a group of economists in Naples, led by Augusto Graziani, who wrote a book containing, first, the foundations for public economic intervention, then the theory of economic policy and, finally, detailed policies aiming at specific short- or long-run targets (D'Antonio, Graziani and Vinci 1972, 1979).
Other books, such as Rey (1967) and the work done in conjunction with the attempt to lay down a framework for the indicative planning schemes prepared by the central government, applied some of the principles of the discipline, specifically those of the theory of economic policy (e.g. Fua and Sylos-Labini 1963).For many years, these, together with a few others, were the main economic policy textbooks circulating in Italy, widely adopted in most universities. After 1990, other textbooks were written along lines similar to those of Caffe and D'Antonio, Graziani and Vinci but with greater attention to social choice and positive economic policy (Balducci Candela 1991; later Balducci, Candela and Scorcu 2001, 2002; Acocella 1994, 1999; Cagliozzi 1994). By including a positive approach in addition to the normative one, these books complemented the ‘normative' theory of economic policy, thus completing the set of ingredients that ideally can be thought of as constituting the discipline of economic policy. Some of these books also introduced cases of economic policy to be analysed as a game and discussed in terms of how they involved issues of reputation and the use of rules. In addition to the books already cited, Persson and Tabellini (1990) dealt more specifically with issues of commitment and reputation, which were familiar after the Lucas (1976) critique and Barro and Gordon (1983). To our knowledge, the idea of policymaking as the interaction of governmental action with that of major private institutions was already in Caffe (1966a), but he only hinted at it and did not express it in detailed and formal terms.[25]
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Some of the Italian books that had developed and complemented the ‘Scandinavian-Dutch approach' to economic policy were translated into English and other foreign languages (e.g. Chinese, Polish and Croatian) and now enter the syllabus of some tertiary-level courses abroad (this was the case for e.g. Acocella 1994, 1999). Notwithstanding this, the approach has apparently failed to largely develop abroad in the period when it did not find any objection; by the end of the 1970s, it had practically been abandoned in the countries where its core originated (see more in Section 2.1).
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