Power elites and Italian dualism: an institutional approach

Maurizio Caserta[1]

Institutions are viewed in many different ways in economic analysis. The view ranges from total irrelevance to complete pervasiveness. In some cases, institutions are viewed as providing simply the slowly changing background against which economic behaviour takes place. In other cases, all economic behaviour is reduced to a mere replica of institutionally predetermined behaviour. In actual fact, institutions are pervasive but do not entirely determine behaviour. This is both a blessing, as otherwise one should rule out freedom of choice, and a scourge, as it leaves room for the exercise of power, physical, economic, military, cultural. Institutions cannot be determined entirely by institutions. One cannot regress indefinitely.  There must be a time when institutions cease to be explained by existing institutions but emerge from choice and power. Institutions are often devised precisely to support a given balance of power, which lies at their origin and made them possible. Sometimes, despite the change in political institutions, the existing structure of power does not change.

Italian dualism can be seen as emerging precisely from this kind of balance of power, which requires, to be preserved, a differentiated level of development across the country. No one could deny the existing gap between the north and the south of the country. There are areas in the north whose GDP per capita is twice or three times as high as GDP per capita in some southern areas. In the face of all the attempts, which, through the last decades, have been made by various governments to bridge the gap, no serious result can be reclaimed. Therefore, one can legitimately test the hypothesis that such an enduring gap is deliberate. To test that hypothesis, at least on a theoretical basis, it is important to identify the elites involved, bring to light the underlying agreement, show that current institutions help preserve that power arrangement, identify the payoff to those elites, and show that no better agreement is available.

[1] University of Catania, Department to of Economics and Business