Debate at this National Interest Conference got underway with the observation that overcoming the social and economic divide between Northern and Southern Italy requires a profound rethink of intervention policies together with an overall return to efficiency and effectiveness in public action.
The participants stressed that the modest progress made towards reducing the gap (both in terms of gross domestic product per capita, as well as in respect of a long series of indicators of the quality and cost of major public services) cannot be put down to inadequate levels of investment. Instead, they stem from a range of factors relating to the functioning of the public administration, the standard of local political governance and an under-accumulation of social capital.
The first session of the Conference was given over to discussing infrastructure, public facilities and research as three areas crucial for growth in the South, the supply and quality of each of which – it was felt – needs to be brought up to the standards prevailing in the rest of the country.
Various obstacles were identified as standing in the way of the achievement of this goal, including: the predominantly local focus in the planning of public intervention measures; the breakdown of these measures into such a large number as to have no appreciable impact on improving structural conditions; and the complexity and variability over time of rules governing the use of public resources and the implementation of measures, such as to reduce – almost to the point of eliminating – the contribution made by private capital towards the building of infrastructure and the provision of public services.
The participants pointed to the particularly inefficient public procurement system as giving rise to serious distortions in competition and widespread cases of corruption. The system, it was noted, is built on mechanisms that lead to collusion, and is managed by contracting authorities that are too fragmented and incapable of keeping a lid on the practice of inflating the costs of proposed works (both during the permit-application process as well as following the bidding process due to frequent ex-post renegotiations).
It was emphasized that participation of private capital should, instead, be supported by a simple regulatory framework that is both stable over time and proof against renegotiation by public authorities. The development of public-private partnerships would enable major progress to be made, quickly and in a manner consistent with the state of public finances, on the widespread deployment of broadband in the South that would, in turn, have multiplier effects on the particularly intensive investment that this entails.
The second Conference session was devoted to analyzing three specific contextual factors that to a large extent determine the quality of the environment in which individuals and businesses operate in Southern Italy, namely: legality and security, education, and access to credit.
The participants observed that restoring minimum required levels of legal certainty and legality are a precondition to any development process. In this regard, whilst efforts to combat organized crime have met with significant success in recent years, especially in Campania and Sicily, these must be accompanied by measures aimed at inducing cultural change and bolstering civil society, thereby leading to clearer social condemnation of collusion with the mafia.
It was acknowledged that Southern Italy’s school education system continues, despite recent improvements, to lag significantly behind the rest of the country in terms of standards, once again without there being any statistical correlation with the amount of resources actually allocated to the sector. The number of graduates remains below the national average, and a third of such graduates finds employment in Central and Northern Italy. It was conceded that the geographic mobility of university students and graduates represents a form of social mobility and therefore does not, per se, constitute a problem. However, it was felt that both the school and university systems would benefit from greater competition underpinned by appropriate study voucher and scholarship schemes with a view to supporting greater freedom of choice on the part of families and individuals.
Finally, it was noted that the entry into operation of the so-called “Banca del Mezzogiorno” could have a positive impact on access to credit for firms in the South, which are generally medium-to-small or very small in size. This could be brought about through the creation of a network of relations between local banks, a return to closer ties between banks and local businesses, and an increase in the range of products and services on offer to clients, particularly in the area of medium-to-long-term finance.