November 10, 2011

Maybe Italy Should Invite the Mafia Back

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So what is Italy’s problem, anyway? Daniel Gros looks at the numbers and says their capital investment is fine, their structural indicators are fine, and investment in R&D is fine. In other words, all the usual measures that economists think are important seem fine. By process of elimination, then, their problem must be lousy governance:

There is only one set of indicators on which the performance of Italy has clearly [declined]: the governance of the country. This can be measured by the Worldwide Governance Indicators (WGI) from the World Bank. The three most important indicators for the economy are:

the rule of law;
government effectiveness in general; and
control of corruption.

Italy’s performance on all three indicators has deteriorated dramatically over the last decade. Moreover, by all these measures Italy now ranks lower than any other Eurozone country (including Greece!). The difference between Italy and the Eurozone core is now over two standard deviations below the core Eurozone average.

I don’t know if I buy this or not. Is governance really the only metric on which Italy has declined? Their demographics are pretty bad, after all. And they’ve been famous for dysfunctional government pretty much forever.

But demographics don’t explain a flattening in GDP per hour worked. Not obviously, anyway. And on that measure, it looks as if Italy (the thick red line on the bottom chart) started pulling away from other nearby countries right around 1996, exactly the same time that all their governance metrics started going to hell too. So maybe that really is what’s going on. Technocracy may not be getting much good press these days, but maybe a strong dose of technocracy is just what Italy needs for a while.

Then again, it might be just the opposite. In the 1990s, Italian voters rebelled against the influence of the Mafia in government, but guess what? It’s possible that things ran better when the Mafia was in charge. After all, it’s at least plausible that small-scale Mafia thuggery is less malignant than the industrial-scale business thuggery of a guy like Silvio Berlusconi. Something to think about.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

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