The Economics of the Third Way

The Economics of the Third Way

Experiences from Around the World

Edited by Philip Arestis and Malcolm Sawyer

The ‘third way’ is a term often used by politicians and others to indicate a set of new policies adopted by former social democratic parties throughout the world. This book is an attempt to dissect the ideas and economic theory behind the rhetoric of the ‘third way’ through a critical evaluation of the experiences of ‘third way’ administrations in a diverse range of countries.

Chapter 7: The Third Way: Italian experiments

Augusto Graziani

Subjects: economics and finance, post-keynesian economics, public sector economics


Augusto Graziani 7.1 INTRODUCTION The following brief background will clarify the succession of political events in Italy. In 1992 a number of judicial cases were brought which demonstrated the extensive corruption of the two main political parties, the Christian Democratic Party and the Socialist Party. Craxi, the head of the government, was forced to resign and was replaced by a close follower of his, Amato. In 1993, Amato resigned and a totally new government was formed under Ciampi, former Governor of the Bank of Italy who did not belong to any political party. In 1994 new elections were held. Right-wing parties gained a majority and a new government was formed under Berlusconi. The neo-fascist party National Alliance was part of the majority and was represented within the government, which shook public opinion throughout Europe. However, the government was short-lived. Among its opponents it counted the left-wing parties, the unions, and also, to a certain extent, major industry (authoritative daily newspapers such as Il Corriere della Sera or La Stampa, both owned by the Fiat group, never lost an opportunity to demonstrate their distance from the Premier and his government). The Berlusconi Government lost its majority in parliament and was finally forced to resign as a consequence of popular movements against a proposed reform of old-age pensions. In 1995, a new technical government was appointed under Dini, a former officer of the Bank of Italy and more recently Secretary for Foreign Affairs under Berlusconi, but who did not belong to any...

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