External Constraint and the Labour Oriented Supply-side Policies in Italy

ABSTRACT: This paper attempts to estimate the relative importance of various factors that, under an increasing external constraint, have contributed to the competitiveness and output growth in the Italian industry during the last eighteen years. In particular, it tries to evaluate the effectiveness of the few relevant supply-side policies adopted in Italy, which were based essentially on labour oriented policy instruments. It is found that technological change was far more important than policy factors for restructuring and reconverting industrial activities and increasing the level of production.