ITALY Trends and Developments Contributed by: Enrico Maria Mancuso, Federico Bracalente, Marco Accorroni and Marco Mariotti, Herbert Smith Freehills Studio Legale
Corruption as a Social, Political and Economic Phenomenon
Fourth, corruption leads to higher costs and inefficiencies 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 rela - tionships. This misuse of public funds results in subpar goods and services, ultimately compro - mising the public interest in obtaining the best value for money. Finally, corruption discourages investments from foreign economic players in a country that, despite the significance of its economy, has his - torically struggled to be seen as a place where business can be easily conducted (see the World Bank’s Ease of Doing Business 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 constraints and models offered by international institutions and best practices, Italy has progressively made substantial improve - ments in combating corruption over the years. Transparency International’s Corruption Per - ception Index shows that since 2012, Italy has improved its score by 14 points (from 42 to 56). While corruption remains a serious issue, par - ticularly 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.
Corruption has been – and still is – a complex and deeply rooted problem in Italy, having sig - nificant negative political, social and economic consequences including the following. First, corruption undermines collective trust in public institutions and public administration, eroding citizens’ confidence in the integrity and effectiveness of their leaders. This loss of trust can lead to decreased civic participation and a weakened democratic process, as people become disillusioned with a system they per - ceive as unjust or unresponsive to their needs. This implication of corruption is particularly problematic 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 ine - qualities 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 coun - try’s economic development by disrupting fair competition among businesses. This environ - ment stifles innovation and efficiency, as success becomes linked to corrupt dealings rather than quality or value. According to a 2022 survey, cor - ruption costs European economies more than EUR900 billion per year, with Italy’s economy alone losing at least EUR237 billion, amounting to approximately 13% of its GDP (Rand, 2022).
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