Reference no: EM132286557
Examine the case and answer the following question.
This case emphasizes Italian society and its institutions and why young Italians are more likely to leave the country to seek fortunes abroad.
Why are ambitious young Italians more likely to leave home to work overseas?
Italians are deeply anti-meritocratic
EACH WEDNESDAY NIGHT in west London a group of Italian expatriates gathers to play five-a-side football on an astroturf pitch under a flyover. The group's organiser, a native of Milan in his 30s, works for a multinational company that may post him to the Middle East next. He says he will never go back to Italy, a sentiment shared by many Italian exiles. His sister, a doctor, is still in Italy, where she works for lowish pay despite her degree from a famous American university; a large chunk of her earnings goes to a senior consultant. Her husband, a lawyer, was recently told by his firm that he is too young to be promoted.
Italy is indulgent towards its children in some ways--it is not unusual for them to live at home until they are in their 30s--but hard on them in others. "A typical Italian family these days", says Enrico Letta of the Democratic Party, "has some great-grandparents, four grandparents, two parents and one child. This poor child has so many people planning its life, there is no possibility of it ever taking a risk."
The government transfers money from young to old by spending 14% of GDP on pensions, a higher proportion than any other OECD country. Italy's demography ought to hand a big advantage to the young who, thanks to a fertility rate of just 1.4 per woman (well below the rate required to hold the population steady), are becoming scarce. But instead of gaining extra bargaining power, they are blocked by gerontocracies everywhere.
Politics is the most visible one. The average age on taking office of Italy's 11 prime ministers since 1990 was 62. Mr Berlusconi, the current incumbent, is 74. Cesare Geronzi, one of the great power-brokers in Italian business, was 76 when he was forced out as chairman of Generali, Italy's biggest insurer, in April. His predecessor, Antoine Bernheim, left at 85. Journalism is little better: the same ageing columnists keep filling the op-ed pages in Italy's main newspapers. Even Italy's mafias are run by old men: Bernardo Provenzano, the boss of the Corleone mafia family, was 73 when he was arrested in 2006. The prize catch in a big operation last year against the 'Ndrangheta, a particularly nasty group from Calabria, was the man thought to be its boss, 80-year-old Domenico Oppedisano.
Ageing societies need to get better at finding work for older workers, but giving them all the corner offices is not the way to do it. One former employee of Telecom Italia describes how, on his first day at the company, he was told that if he wanted to speak to someone at the same level in the organisation he should get his secretary to call the other person's secretary; but to speak to someone more senior he should call that person's secretary direct. Some senior managers did not use e-mail; their secretaries would print out any important ones for them.
Faced with having to wait until they are the age of their grandparents to become senior, many of Italy's best and brightest leave. Universities in America and Britain are full of Italian academics too ambitious to sit around for decades to get tenure in Italy. International bureaucracies such as the World Bank, IMF and OECD are replete with Italians wielding PhDs. Brussels is another escape hatch: Italy is a great provider of dedicated Eurocrats. Perhaps the single most damning indicator of Italy's current economic health is that it is the only net exporter of graduates among rich European countries, something more commonly associated with developing countries than with developed ones (see chart 2, previous page).
Many of Italy's graduates leave to escape the system of raccomandazioni, or connections (often through families), that rules the labour market. Examples of such practices can be found in every country, but Italy is different for two reasons: raccomandazioni are ubiquitous and rarely questioned.
It might be tempting to ascribe this preference for connections over qualifications to what Edward Banfield, an American sociologist, called "amoral familism". In a book on poverty in southern Italy, "The Moral Basis of a Backward Society", published in 1958 but still controversial today, Banfield argued that Italian family bonds are so tight that they prevent people from coming together to create outcomes that benefit a larger number. The thesis was intended as an analysis of a single village but has often been read as a condemnation of an entire nation. Happily there is no reason to put 60m Italians on an analyst's couch and examine their deep-seated flaws because a much simpler explanation for the prevalence of raccomandazioni is available.
By comparison with other rich countries Italy has good primary schools, average (if very variable) secondary schools and poor universities (with a handful of shining exceptions). Taking the education system as a whole, the most surprising thing is the absence of standard tests in secondary schools. Italian children sit exams after five years of secondary schooling, but these are not the same across the country, making it impossible to compare the results of a student in Bari with one in Bologna. They then go on to universities which are generally not allowed to select the pupils they admit, and spend most of their time learning vast amounts of material by rote. Once they have graduated, their degrees must by law be treated as of equal value no matter which university conferred them, so potential employers have to guess which students are any good.
Italy's education minister, Mariastella Gelmini (pictured on poster), is aware of the system's defects and is trying to remedy them. When Italy submitted itself for the first time to the OECD's Programme for International Student Assessment (PISA), it became clear that there was a huge divide between weak secondary schools, predominantly in the south, and strong ones in the centre-north. Last year Mrs Gelmini introduced a uniform test, to be taken by students in their third year of secondary school. Encouragingly, the first such tests were criticised for being too tough. The next stage will be to link teachers' performance to the improvement in their schools. The education ministry is running two pilot projects to measure this which will inform new contracts for teachers from 2013. These reforms have been opposed by teachers' unions, in part because they entail overall cuts in education spending. "There is a misconception that more resources will improve things," says Mrs Gelmini.
Scratch my back
The problems of secondary education look mild by comparison with those of Italy's public universities. Raccomandazioni are everywhere. Roberto Perotti of Bocconi University, which is private, has been studying this phenomenon and has so far identified 33 cases where the rectors and presidents of public universities have installed their children, children-in-law and spouses as professors in their universities. The market for academic jobs in public universities is deeply corrupt. Plenty of degree courses have sprung up that seem designed merely to create tenured positions; the ministry of education cites courses on the well-being of dogs and cats and on packaging as examples. Applicants for professorships take part in public competitions for jobs that are neither public nor competitive but designed to lend credibility to decisions that have already been made. Mr Perotti studied 40 such national competitions and found that 70% of the jobs were filled by people who were at least associate professors at the university advertising the job. When outsiders do get jobs, it is often because a deal has been done with another university, on the understanding that the favour will be returned in the future.
One way of improving matters would be to privatise some of the public universities--but that does not seem to be feasible in a country where even modest reform proposals have brought protesters onto the streets. This is a shame, as Italy has some excellent private universities, Bocconi and Universita Cattolica in Milan being notable examples. Another option would be to get the public universities to compete more vigorously, which is what recent reforms have aimed to do. In theory, a tenth of their funding should now be tied to their performance in producing peer-reviewed research. The government would like to push this share up to 30%, though that may be wishful thinking. For the moment, not one of Italy's universities makes it into the top 100 in the two main international rankings of higher education.
Changing universities will take time. The current system of nationwide competitions for academic jobs was introduced because the previous system, which confined the circle of applicants to those from nearby universities, was thought too easy to fiddle. A government initiative to encourage public universities to hire faculty from abroad (by offering extra funding) has had no discernible effect. As so often in Italy, it seems that when the rules change, behaviour changes only just enough to allow everyone to continue as before.
The problems of secondary education look mild by comparison with those of Italy's public universities. Raccomandazione are everywhere