2. The Impact of Economic Challenges on Italy’s Political System

Over the past 70 years the Italian institutional system has changed in response to endogenous as well as exogenous political, economic and social challenges. During the 1950s the change was driven by the economic “miracle” that changed the economic base of the country and opened the prospects of higher standards of living and social mobility. In the 1960s the cultural base was modernized and a greater emphasis was placed on the absorption of liberal social values. The 1970s, instead, saw the decentralization of policy making and implementation due to the creation of the regions and the greater powers allocated to local government in the attempt to “bring power closer to the people”. Ten years later economic change was again in the forefront with the creation of industrial districts and the diffusion of small and medium enterprises throughout a large part of the country that turned it into an exporting powerhouse. During the 1990s a political transition took place between the former ruling political class and a new class made up of younger and more populist oriented leaders and political parties. It is the contention of this text that after the millennium two forces have been at work to change, once again, the nature of the institutions and politics in Italy. The first is the Europeanization of many policy areas, from monetary policy to the management of the market and economy, while the second is the globalization of the market, communication and lifestyles that no longer fit within a purely national model. In other words the forces that used to contain interactions behind the national borders are no longer operative.