ITALY Trends and Developments Contributed by: Enrico Maria Mancuso, Federico Bracalente, Marco Accorroni and Marco Mariotti, Herbert Smith Freehills
Corruption as a Social, Political and Economic Phenomenon Corruption has been – and still is – a complex and deeply rooted problem in Italy, having significant negative political, social and economic consequences including the following. First, corruption undermines collective trust in public institutions and public administration, eroding citi - zens’ confidence in the integrity and effectiveness of their leaders. This loss of trust can lead to decreased civic participation and a weakened democratic pro - cess, as people become disillusioned with a system they perceive as unjust or unresponsive to their needs. This implication of corruption is particularly problem - atic in Italy, where public institutions and authorities – with the sole exception of law enforcement – have, for decades, consistently been regarded as insufficiently trustworthy by more than half of the population (Italian National Statistical Institute (ISTAT), 2022). Second, corruption fosters severe social inequalities between those involved in corrupt activities and those who are not. It hampers the meritocratic selection of professional and administrative personnel, allowing positions to be filled based on favouritism or bribery rather than competence and qualifications. Third, corruption significantly hinders the country’s economic development by disrupting fair competition among businesses. This environment stifles innova - tion and efficiency, as success becomes linked to cor - rupt dealings rather than quality or value. According to a 2022 survey, corruption costs European economies more than EUR900 billion per year, with Italy’s econo - my alone losing at least EUR237 billion, amounting to approximately 13% of its GDP (Rand, 2022). Fourth, corruption leads to higher costs and inef - ficiencies for the public administration in procuring goods and services. Contracts may be awarded to suppliers not based on merit or cost-effectiveness but rather on corrupt relationships. This misuse of public funds results in subpar goods and services, ultimately compromising the public interest in obtaining the best value for money.
Finally, corruption discourages investments from for - eign economic players in a country that, despite the significance of its economy, has historically struggled to be seen as a place where business can be easily conducted (see the World Bank’s Ease of Doing Busi - ness rankings, 2020, where Italy ranks 58th globally, behind Kenya and Kosovo but ahead of Chile and Mexico). International investors often view corruption as a significant risk, fearing reputational damage and unpredictable business environments. This aversion limits the influx of capital, technology and expertise, which are all vital for economic growth and integration into the global economy. The main recent trends and developments Based on the heightened awareness of the severity of the implications of corruption, and thanks to the con - straints and models offered by international institu - tions and best practices, Italy has progressively made substantial improvements in combating corruption over the years. Transparency International’s Corrup - tion Perception Index shows that, since 2012, Italy has improved its score by 14 points (from 42 to 56). While corruption remains a serious issue, particularly when compared to the rest of Europe (the average score for European countries is 65), this index reflects a positive trend driven by at least two distinct but interconnected factors. First, the Italian legislator progressively introduced several reforms aimed at tackling corruption, both in the public and private sector, including the following. • The introduction of a corporate criminal liability regime: With Legislative Decree 8 June 2001, No 231 (“Decree 231/2001”), the Italian Government introduced a new form of liability for corporations for certain offences committed in their interest or advantage. While the list of crimes giving rise to corporate criminal liability has been substantially extended through the years to encompass many different crimes, the primary purpose of Decree 231/2001 was countering corruption by making entities accountable for the behaviour of their man - agers and employees. Pursuant to the most recent updates to the Decree, corporations may also be prosecuted for behaviours that, though not falling under the definition of corruption, represent forms
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