17 July 2019

UnHerd: How Italy’s populists keep power

Salvini’s recent policies against NGO rescue operations seem mild in comparison. But these aren’t especially deeply felt: they are tactics employed to muster support from the majority of voters whose interests, meanwhile, are being damaged by the League’s real priorities. Indeed, its rhetoric has changed in tune with the anxieties and opportunities of the period. [...]

Italy’s large public debt is itself a manifestation of that problem. Its roots lie in a politico-economic equilibrium that hinders innovation, competition and creative destruction, which are crucial drivers of productivity growth and prosperity. Low political accountability and a weak rule of law are the main traits; clientelism and illegality its clearest manifestations. Tax evasion is between two and three times higher than in France, Germany, or Spain, for example, and corruption is at levels typical of the Balkans. [...]

Its 1992 manifesto – mixing hostility to Rome and the South with threats of tax revolt and secession – was a direct response to the rising tax burden. It argued that the North should keep its own money, and found support among those regions’ professionals, self-employed workers, small entrepreneurs, and their employees. This became the League’s core electorate, and that manifesto barely changed until the 2010s. [...]

In office, however, the League pushed policies that went directly against their interests. It granted a special pension scheme to certain cohorts of workers; it obtained a tax cut for professionals and small entrepreneurs, and demands a yet more generous one; it won a tax-evasion amnesty, wants another one, and proposes to abolish all limits to the use of cash, which will further ease tax evasion; and it defended tooth and nail two junior ministers accused of corruption and embezzlement.

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