Italy Confronts Productivity Issues

Italy’s pampered state sector braces for reform

ROME – Change is afoot in Italy’s public sector and most of those it would affect, from civil servants to teachers to traffic wardens, don’t like the prospect one bit.

Italy is notorious for its north-south wealth divide, but there is another, less immediately obvious division: between those who work for a private enterprise — often themselves — and those who work for the state.

Ask the former what they think of the latter and you will often hear words like lazy, privileged, inefficient. Data from the international World Values Survey shows public confidence in the state sector in Italy is among the lowest in Europe.

Romano Prodi’s government clearly doesn’t dismiss such judgments because it has pledged to reform the sector by introducing concepts like service, productivity, assessment and promotion based on merit rather than length of service.

The case for reform is compelling. In the last five years public sector wages have risen by almost 15 percent more than in the private sector, with no link to productivity.

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