EUROPEANIZATION in CONTEXT by Francesco
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REFORMING ITALY’S BUDGET PROCESS, 1960-1999: EUROPEANIZATION IN CONTEXT by Francesco Stolfi Laurea in Economia e Commercio, Università di Roma, 1995 M.A. in Urban Studies, Portland State University, 1998 M.A. in Political Science, University of Pittsburgh, 2001 Submitted to the Graduate Faculty of Arts and Sciences in partial fulfillment of the requirements for the degree of Doctor of Philosophy University of Pittsburgh 2006 UNIVERSITY OF PITTSBURGH FACULTY OF ARTS AND SCIENCES This dissertation was presented by Francesco Stolfi It was defended on April 10, 2006 and approved by Mark Hallerberg, Associate Professor, Department of Political Science, Emory University Anibal Perez-Liñan, Assitant Professor, Department of Political Science B. Guy Peters, Professor, Department of Political Science Claudio M. Radaelli, Professor, Department of Politics, University of Exeter Dissertation Advisor: Alberta Sbragia, Professor, Department of Political Science ii Copyright © by Francesco Stolfi 2006 iii THE REFORMS OF ITALY’S BUDGET PROCESS, 1960-1999: EUROPEANIZATION IN CONTEXT Francesco Stolfi, PhD University of Pittsburgh, 2006 By studying the reforms of Italy’s budget institutions this research aims to define the factors that explain the timing and content of institutional and policy reform in the context of extreme policy stability. It argues that the timing of reform depends on the preferences regarding the status quo of the parties in the government majority, and that these preferences depend on the nature of the party system (whether it allows government alternation or not) and on the type of electoral rules. Specifically, lack of government alternation and the use of proportional representation minimize the likelihood of reform, since it gives incentives to parties to develop a distributive policy orientation. Conversely, government alternation and the use of plurality rules make reform easier by making parties more programmatic, namely by changing their electoral calculus in favor of the provision of substantive rather than merely distributive policies. Moreover, reform may at times occur even in the presence of a government majority with a strong distributive orientation. In this case, in order for reform to occur policy entrepreneurs must be able to exploit the pressure of exogenous factors, such as the weakening of the electoral support for the government parties to force the government majority to accept the reform. Among these exogenous factors, a potentially crucial role could have been played by European pressure. However, this research, using a bottom-up approach, has concluded that in most cases of reform Europeanization has been a contributing, rather than the main explanatory factor. As regards the content of reform, this research has shown that in most reform episodes the content of the reforms has been shaped by “master ideas”- such as economic planning in the 1960s and New Public Management in the 1990s – connecting the structure of the fiscal policy institutions to broader attempts to reform the way the Italian State operates. This conclusion iv provides an ideational argument that contrasts with institutionalist arguments that are skeptical of an independent causal role for ideas in explaining how fiscal institutions are chosen. v TABLE OF CONTENTS PREFACE......................................................................................................................................X 1.0 INTRODUCTION........................................................................................................ 1 1.1 THE ITALIAN CASE ......................................................................................... 2 1.1.1 Italy’s pattern of policymaking.................................................................... 5 1.2 EXISTING EXPLANATIONS........................................................................... 9 1.3 THE ARGUMENT ............................................................................................ 11 1.3.1 Timing: The factors affecting the preferences of the veto players ......... 12 1.3.2 The content of reform................................................................................. 14 1.4 PLAN OF THE BOOK ..................................................................................... 14 2.0 THEORY AND RESEARCH DESIGN ................................................................... 16 2.1 THE TIMING OF REFORM AND PARTY PREFERENCES .................... 16 2.1.1 The factors affecting the policy orientation of the government parties. 17 2.1.2 Policy entrepreneurs and the timing of reform........................................ 20 2.2 ELECTORAL FORMULAS ............................................................................ 22 2.3 EUROPEANIZATION...................................................................................... 26 2.4 POLICY ENTREPRENEURS ......................................................................... 27 2.5 THE CONTENT OF REFORM....................................................................... 28 2.6 CASE SELECTION, RESEARCH DESIGN AND VARIABLE OPERATIONALIZATION............................................................................................... 32 2.6.1 Case selection: Why Italy, why fiscal policy institutions......................... 32 2.6.2 Research design........................................................................................... 34 2.6.3 A bottom-up approach to the study of Europeanization......................... 35 2.6.4 Studying the content of the reforms.......................................................... 37 2.6.5 The timing of the reforms........................................................................... 38 vi 2.6.6 The content of the reforms......................................................................... 41 3.0 OVERVIEW............................................................................................................... 43 3.1 A FRAGMENTED BUDGET PROCESS ....................................................... 44 3.2 THE REFORMS OF THE BUDGET PROCESS........................................... 49 3.3 CONCLUSIONS................................................................................................ 56 4.0 THE 1960S AND LAW 62/64.................................................................................... 57 4.1 THE TIMING OF THE 1964 REFORM......................................................... 58 4.2 THE CONTENT OF THE 1964 REFORM .................................................... 60 4.3 THE FAILED REFORM OF THE BUDGET MINISTRY (LAW 48/67) ... 66 4.3.1 The timing of the reform ............................................................................ 66 4.3.2 The content of the reform........................................................................... 68 4.4 CONCLUSIONS................................................................................................ 72 5.0 THE 1970S AND LAW 468/78.................................................................................. 75 5.1 THE TIMING OF THE REFORM.................................................................. 76 5.2 THE CONTENT OF THE REFORM ............................................................. 83 5.3 CONCLUSIONS................................................................................................ 91 6.0 THE 1980S AND LAW 362/88.................................................................................. 92 6.1 THE TIMING OF THE REFORM.................................................................. 93 6.2 THE REFORM COMMUNITY AND THE CONTENT OF THE REFORM 98 6.2.1 The reform community............................................................................... 98 6.2.2 The content of the reform......................................................................... 101 6.3 THE ELIMINATION OF THE SECRET VOTE IN PARLIAMENT....... 110 6.4 CONCLUSIONS.............................................................................................. 113 7.0 THE BUDGET REFORM OF THE 1990S – NEW PUBLIC MANAGEMENT, PARTY CRISIS AND NEW ELECTORAL RULES............................................................ 115 7.1 EXPLAINING THE TIMING OF THE REFORMS: PARTIES AND THE ROLE OF INSTITUTIONAL FACTORS..................................................................... 119 7.1.1 The new electoral law ............................................................................... 120 7.1.2 The impact of the electoral law................................................................ 121 7.1.3 Countervailing factors.............................................................................. 123 vii 7.1.4 The Amato government (1992-1993)....................................................... 127 7.1.5 The electoral referendum and the Ciampi government (1993-1994) ... 134 7.1.6 The Berlusconi and Dini governments (1994-1996)............................... 138 7.1.7 The Prodi and D’Alema I governments (1996-1999)............................. 140 7.2 THE REFORM COMMUNITY..................................................................... 146 7.3 EXPLAINING THE CONTENT OF THE REFORMS: IDEAS................ 159 7.3.1 The reforms of the Amato and Ciampi governments (1992-1994): Legislative decree 29/93 and law 537/93 ................................................................ 162 7.3.2 Stall in the reform process: The Berlusconi and Dini governments (1994- 1996) 165 7.3.3 The new reform season of the Prodi government (1996-1998): Laws 94/97 and