Italy's dysfunctional political economy

Italians are advanced in age, short in education, carry a heavy financial burden, and the road ahead is uphill. Although this picture is distorted ( for the worse) by the ongoing underdevelopment of the south, the fact remains that since the 1970s Italy's elites have failed to meet the challenges of economic adjustment and political development, leaving the country's economy insufficiently prepared to meet the future. Against a background of declining total factor productivity growth, the decline of large industrial companies, their replacement in Italian production by small and medium-sized firms, and a diminishing share of world exports, the country's economy is responding poorly to the post-devaluation era of euro-zone membership.