OECD Economic Surveys: Italy 2021
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Italy’s economy is recovering steadily from the COVID crisis, thanks to the vaccination campaign and generous fiscal support to households and firms. Risks to the outlook are large, including virus variants and the path of global interest rates. To raise growth and employment above pre-pandemic levels, the composition of public spending and taxes must improve. Together with implementation of the National Recovery and Resilience Plan, which includes critical structural reforms and investments, this can help support a faster transition towards a greener, more digitised economy. Realising this will require a demanding set of legislative and administrative reforms. Improving civil justice, tax administration and public investment will be essential to raise income growth. Making more effective use of performance information and spending reviews can help reallocate public spending to the most growth-enhancing activities. Reviewing the existing stock of regulations and how they are enforced would improve the business environment. Agile recruitment and better assessing, rewarding and supporting the performance of public servants would fill growing skill gaps in the public workforce. Improving collaboration across Italy’s multiple layers of government would improve delivery of public services such as childcare and active labour market policies.
SPECIAL FEATURE: STRENGTHENING PUBLIC SECTOR EFFECTIVENESS
Strengthening Italy’s public sector effectiveness
Raising the effectiveness of Italy’s public sector is more urgent than ever. It will be key to revive investment and productivity and improve access to quality public services for the most vulnerable. The quality of public goods and services is variable, weakening Italy’s resilience to shocks like the COVID-19 crisis and the ability to secure a more sustained and inclusive recovery. Excessive regulations and their onerous enforcement add to businesses’ operating costs. Trust in public institutions and public service delivery is one of the lowest across OECD countries. In the coming years Italy will have a unique opportunity to improve the effectiveness of its public sector, through the Recovery and Resilience Plan, the renewal of the public sector workforce, and the potential of technological innovations. This chapter proposes options to strengthen public sector effectiveness by looking at what interventions the public sector makes in the economy, how the public sector mobilises its workforce, procures goods and services, and leverages the benefits of digitalisation, and who acts across levels of government and between the public and private sector. It concludes that recruiting and developing the necessary skills in the workforce, monitoring performance, as well as encouraging coordination will be key to better budget allocations, regulatory environment, and delivering quality public goods and services.
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