Diagnosing the Italian disease

Italy stands out among developed countries for its large public debt and chronically low productivity growth.

The country’s productivity growth disease cannot be addressed without understanding why aggregate labour productivity abruptly stopped growing around 1995.

This column argues that the most likely cause is Italian firms’ non-meritocratic managerial practices, which meant they failed to capitalise on the ICT revolution.

Diagnosing the Italian disease

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