ABSTRACT OF PAPER
Title: Back to the long-run: the “Development Operation” as a supply-side policy during Guido Carli’s chairmanship of Italian industrial association (Confindustria)
Author: Dafano Alessandro
During the Seventies, Italy was hit by a dramatic economic crisis and stagflation; in 1976 Guido Carli, appointed chairman of the Italian industrial association (Confindustria), together with his Director Paolo Savona and the staff of the Research Department (CSC) including, among others, Jan Kregel, Enzo Grilli, Massimo Tivegna, Gabriella Chiesa, tried to find a way out suggesting a new path for growth and development. He thought firms should be free from government and bureaucracy “laces”, but at the same time asked them to run a fully transparent management; at the same time, rent-seeking positions, public intervention should be abandoned and firms should open themselves to national and international competition. This, he thought, was the only possible way to legitimate their requests to trade unions, parties and government, in a framework of economic bust, low capital accumulation, inflation and unemployment, excessive state aids with high crowding-out effect; considering pluralism and competition as the main factor of economic and social development, Carli believed in firms as driving forces of innovation and growth. Within this background, since that period mainly aggregate demand policies were carried out, while Confindustria’s “Development Operation” proposal (also known as “4,5 proposal” due to its growth level target) stressed the importance of decreasing public debt and spending, in order to revamp private saving, investment and the export-led growth. The paper aims to affirm that the initiative built up by Confindustria tried to give Italian economy a “supply-side” policy in order to modernize the country, which ante litteram outlined the one government later tried to design during the Eighties, thanks to many members of Confindustria who moved to the Ministry of Budget. In the Seventies, Italy proved incapable of tying itself with rules of conduct, accepting and empowering an “external costraint”. We will firstly provide an economic and historical-istitutional framework of that period; we will then describe the making and the contents of the “Development Operation”; finally, we will report some critics around the debate on this proposal, and why this policy was rejected by entrepreneurs themselves.
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