During the 1970s, elected regional assemblies and governments, which had previously existed only in the five outlying regions given special powers at various times (Sicily, Sardinia, Friuli–Venezia Giulia, Trentino–Alto Adige, and Valle d’Aosta), were finally set up throughout Italy, as the constitution had required. They acquired extensive devolved powers of legislation and administration, especially over agriculture, health, social welfare, and the environment. Many national agencies were dissolved in 1978, and their powers were allocated to the regions. In 1984 even the Southern Development Fund was abolished and its planning and investment powers transferred to a complex set of institutions, including the southern regional governments. Elections were held at five-year intervals, and after 2000 the president of each region was elected directly under a new law.
The effects of regionalism were profound. The regions became the main bodies responsible for welfare and for organizing the health services, which, in turn, decreased the influence of central politicians. (The political nature of appointments to these services in the regions, however, often drew much criticism.) In the north politicians became more conscious of regional interests and more intent on running their own affairs without interference from Rome. This was less true in the south, where continuing poverty ensured a steady need for subsidies from the central government. Conflicts began to emerge between local and national interests, especially in the large and rich regions of the north. The economy in the 1980s
Economic growth revived in the mid-1980s, once terrorism had ended and the 1979 oil crisis had subsided. In autumn 1980 Fiat laid off more than 20,000 workers in Turin, and the unions’ protest strike quickly collapsed. The long season of protest that began in 1969 was finally at an end. Other employers followed Fiat’s example, and the power of trade unions went into decline. Big industry began to slump all over Italy but especially in the industrial northwest. Historic factories, linked to mass production and class struggle, closed or scaled down their operations. A 1985 referendum markedly reduced the indexation of wages, despite a strong Communist campaign against this action. However, northern Italy prospered in the financial boom years of the middle and late 1980s, helped by the low price of oil, and people spoke of a “new economic miracle.”
The Italian economy began to develop along new lines. In central and northeastern Italy—collectively known as the “third Italy,” alongside the less-developed south and the northwest, with its older industries and financial centres—small businesses flourished. These firms mainly produced quality goods for export and were often family-run. New industrial districts in these regions specialized in particular products, from taps to ties. New industries, such as fashion, began to replace traditional businesses in the northern cities. Milan became one of the world’s fashion capitals during the 1980s, bringing in billions of lire in business and advertising. With the diversification of the media at the end of the 1970s, private television took off under the influence of a dynamic entrepreneur, Silvio Berlusconi.
However, serious problems persisted. Budget deficits remained large and, given the political system, untackled. By 1989 the accumulated national debt exceeded the annual GDP. The economy continued to depend heavily on decentralized, “unofficial” work done by casual workers in small firms and service industries (the so-called black-market economy), as well as on a handful of successful international entrepreneurs. The south, moreover, did not participate fully in the country’s economic recovery, aside from pockets of growth in Puglia and Abruzzi. The rise in oil prices in the 1970s and the world steel glut devastated industry in the south except for a few areas of light engineering and textile production. In December 1992 the system of “extraordinary incentives” was abolished, just as welfare payments were being reduced and state industries privatized. The south, however, maintained a thriving black-market economy supported partly by organized crime activity. As emigration diminished and mass education expanded, living standards began to rise in line with, but always well behind, the more affluent north. The most worrying aspect of the southern economy was, as ever, youth unemployment, particularly in poverty-stricken cities such as Naples, Palermo, and Reggio di Calabria.
Public services remained an economic and political quagmire and a target of growing public resentment. Despite centres of excellence, the state’s postal, transport, health, legal, and financial services were top-heavy with bureaucracy, inefficient, and corrupt, and they cost Italy’s citizens hundreds of hours each year in (often pointless) queuing and interminable document collection. Most attempts to reform the system confronted massive resistance from well-organized trade unions armed with contracts protecting their members. It was almost impossible to dismiss a civil servant, and the role of political patronage in public hiring only complicated matters.
Italy had some of the best state nurseries in the world and some of the worst secondary schools. Its universities were full of students who rarely saw their lecturers or actually finished their courses. Not only did Italians pay more taxes than most other western Europeans, but the services they received in return were often comparable to those of eastern Europe or the world’s less-developed countries. Still, some benefited from this system—above all, those working within it or those able to avoid tax through corruption or inefficiency. For the vast majority of ordinary Italians, however, their daily dealings with the state brought frustration and anger. Some of this anger was to explode in the crisis of the 1990s. The fight against organized crime
Organized crime dominated whole regions politically, socially, and economically by the 1980s. In Campania and Naples the Camorra controlled whole swaths of the urban landscape and the underground economy. Several politicians were linked to the Camorra when it siphoned off huge sums of state relief funding after the 1980 earthquake. The ’Ndranghetta organization in Calabria specialized in kidnappings and drug smuggling. In Puglia the Nuova Sacra Corona held sway, while the Mafia dominated Sicily. In Sardinia, bandits continued to operate in some regions, and, although anti-kidnapping laws had been somewhat effective, high-profile kidnappings dominated the news for months.
In addition, organized crime used violence to block enforcement of environmental protection laws and the establishment of public parks (which reduced opportunities for illegal construction) in Sicily and Sardinia in particular. Throughout the south, illegal construction was rife, and successive government amnesties—the last in 1994—further encouraged these builders. It was only after 1996 that the state began to act seriously against illegal construction, and it demolished houses and villas in natural parks in Sicily and Rome.
During the mid-1980s the state and civil society began to move, finally, against the hegemonic control of organized crime. After a series of high-profile Mafia assassinations of major political and institutional figures, above all prefect-general Carlo Alberto Dalla Chiesa (and his wife) in Palermo in 1982, local elites began to evolve a strategy for combating the Mafia. A key Mafia figure, Tommaso Buscetta, turned state’s evidence in 1984 in defiance of the organization’s code of silence. Buscetta was the first to provide detailed information on the workings and plans of the Mafia. His testimony led to hundreds of arrests of key Mafia leaders and henchmen. Soon other mafiosi turned state’s evidence that helped prosecutors win convictions of important Mafia bosses. In addition, the Mafia families became involved in a damaging internal war in the 1980s that left more than 1,000 dead. Finally, there were moves from within the Christian Democratic Party itself against the Mafia after the murder in 1980 of the Christian Democratic Sicilian regional president Piersanti Mattarella, a traditional politician who had decided to lead a campaign against corruption in Sicily. The state passed strong anti-Mafia laws for the first time, and several trials in 1986 condemned hundreds of mafiosi to long prison sentences.