A Manifesto to support Industrial Policies during crisis times.
The starting point of this Manifesto is very simple, yet very tragic at the same time: there is no industrial policy in Italy. Ideas, political instruments as well as resources are lacking – partly as a consequence of the recent financial crisis – making very difficult to open a serious discussion on the mass media. The main viewpoint among opinion-makers can be summarized as “The best policy is no policy”.
Such a sentence, very easy to remember and to make popular, presents, nevertheless, a tiny little problem: it has no roots in the ground of the real world. None of the world leading economies (from USA to China, passing through UK, Germany, France, Japan, Brazil and India) has ever disregarded the structure and the evolution of the domestic industries, especially during hard times. On the contrary, all of them have always used – within the international agreements’ boundaries – financial aids, public procurement, R&D friendly policies and services sustaining entrepreneurs’ activities in order to support the domestic industrial sectors.
Therefore it appears quite straightforward the contrast between these countries and Italy, where the level of the debate conceives the State only as an intruder in the economy, suggesting that public policies’ action should be uniquely devoted to dismantle bureaucracy and all those obstacles braking economic growth. Unfortunately this point of view doesn’t match at all with the Italian economic situation and with its structural issues whose origins date back in time. The weaknesses of the socio-economic institutions in the South of Italy, the regional dimension concerning large part of the Italian Industry as well as the small and medium size firms’ efforts to implement R&D activities can’t be tackled through simple recipes and require, on the contrary, adequately devised solutions.
Furthermore, the debate has prevented any discussion regarding some crucial aspect concerning public policy interventions, that is their entitlement to act only in presence of market failures, while we are still waiting for perfectly competitive markets to show up in the real world. On one side, in fact, it has neglected all the reasoning dealing with the criteria to follow in order to select and evaluate policies that have to be implemented; on the other side, it has interpreted the term “Government failures” as the impossibility for a Government’s action to improve the economic situation, instead of the specific obstacles preventing the efficacy of the public sector policy.
This subtle, though ideological, difference in the definition of “Government failures” has led to an a priori refusal for every type of intervention, industrial policies included. However, analytical tools and economic theory suggest that the policy makers’ difficulties in gathering information about the private sector call for an in-depth analysis rather than for a policy drop-out.
It is also important to point out that industrial policies are perfectly compatible with the European Union framework. Their main task is to draw a path for private firms that can be walked in three different manners. First of all either by distributing monetary rewards or by reducing the risk of bankruptcy to all those firms undertaking predetermined virtuous behaviours. Secondly by accurately managing public resources and, finally, by regulating markets. Therefore this Manifesto has been made to call the attention upon these subjects in order to open a discussion about the various ways an industrial policy can be accurately carried on. As a matter of fact, during crisis times the scarcity of public financial resources narrows the space for any intervention, making the need for a correct allocation of finances more binding than during normal times.
Thus, the way the policies are designed is crucial. It might seem oversimplified but details make the difference, meaning that the more accurate the analysis sustaining the policy, the higher the quality of the policy itself. This obviously isn’t the right place to discuss in a satisfactory way all the details that make a policy proposal satisfactory, nevertheless we can briefly discuss three criteria which have to guide the research.
The first criterion relates to the attentive selection of the objectives that the policy has to achieve. As a matter of fact, this selection has to be coherent with the instruments and the resources available to the policy maker.
The second criterion deals with the information needed to formulate policy proposals. Quite often debates about public policies are developed around unreliable estimates: different numbers entail different analysis and, in the end, lead to different recovery solutions. As a consequence, on one hand, the methodology used to produce this information must be as much rigorous as possible and, on the other, datasets must be available to everybody, in order to ease the comparison among the several estimates stemming from different studies.
The last, but not least, criterion concerns the policy maker’s liability in the policy making process. For such a long time economics has treated policy making as a mechanical process: it had to produce objective, and thus neutral, rules to avoid any kind of discretion by policy makers. However, the skills and the capabilities of those who create and implement policies are fundamental aspects of the policy success as well. Therefore, policy makers must be taken into account not as simple executors but as intelligent economic agents.
We do firmly believe that an efficient industrial policy is possible. A policy which follows from an accurate and coherent framework, which takes into account the several existing constraints together with all the available instruments, which learns lessons from past and foreign experiences and updates continuously. As we have said, we believe in it, and we claim it.
Adriana Agrimi, Alessandro Arrighetti, Giovanni Barbieri, Elisa Barbieri, Marco Bellandi, Silvano Bertini, Paolo Bonaretti, Raffaele Brancati, Massimo Bressan, Albino Caporale, Domenico Cersosimo, Francesco Crespi, Alfredo Del Monte, Amedeo Di Maio, Antonio Di Majo, Marco Di Tommaso, Sergio Ferrari, Massimo Florio, Francesca Gambarotto, Adriano Giannola, Andrea Ginzburg, Anna Giunta, Claudio Gnesutta, Gian Maria Gros-Pietro, Donato Iacobucci, Sandrine Labory, Pietro Masina, Pietro Modiano, Augusto Ninni, Riccardo Padovani, Daniela Palma, Mario Pianta, Gustavo Piga, Stefano Prezioso, Pietro Rostirolla, Lauretta Rubini, Margherita Russo, Domenico Scalera, Marina Schenkel, Roberto Schiattarella, Grazia Servidio, Alberto Silvani, Stefano Solari, Alessandro Sterlacchini, Gianfranco Viesti, Alberto Zazzaro, Alberto Zuliani.
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