Italy: Too Italian for Its Own Good?

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Some of Italy's cultural characteristics, reports David Segal in The New York Times, are hobbling the country's economy. Italy's "highly idiosyncratic" business culture is largely "defined ... by deep-seated mistrust--not just of the government, but of anyone who isn't part of the immediate family." It is also characterized by "a widespread aversion to risk and to growth that to American eyes looks almost quaint."

In fact, as Segal later implies, much of the Italian economy could be described as quaint. Protectionist guilds and something approaching tenure policies even for non-union workers have led to a "sclerotic" job market, while "roughly one-quarter of Italy's G.D.P. is off the books," a result perhaps of little habituation to national taxation and a low sense of national identity. Then comes the family issue:

The suspicion of Italians when it comes to extra-familial institutions explains why many here care more about protecting what they have than enhancing their wealth. Most Italians live less than a mile or two from their parents and stay there, often for financial benefits like cash and in-kind services like day care. It's an insularity that runs all the way up to the corporate suites. The first goal of many entrepreneurs here isn't growth, so much as keeping the business in the family. For a company to really expand, it needs capital, but that means giving up at least some control. So thousands of companies here remain stubbornly small--all of which means Italy is a haven for artisans but is in a lousy position to play the global domination game.

All this leads Segal to wonder: "Is Italy too Italian?"

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