An intellectual boost for Italy’s Europeanisation: the contribution of the influential think tanks Arel and Nomisma (1978–1993)

Abstract

This study analyses the intellectual work of the two principal Italian think tanks—Arel and Nomisma—that were ideologically close to the left-wing Christian Democracy Party during the period of social conflicts in the 1970s until the signing of the Maastricht Treaty in 1992. Even these two think tanks had different specialisations, organisational structures and methodological approaches, both strongly favoured Italy’s Europeanisation. However, the Christian Democracy Party did not follow Arel’s recommendations to maintain control over public debt through the introduction of a public spending limit in the Constitution or Nomisma’s recommendation to implement a long-term industrial policy strategy.

Keywords:

• Think tanks
• ideas
• Europeanisation
• Italy

JEL CODES:

• B29
• P16
• E060
• H11

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Economic ideas are intangible assets that cannot be subjected to copyright laws. In fact, TTs often re-propose ideas that were conceived and applied in the past. It is usually assumed that TTs inspire specific policies if their ideas are conceived of prior to the formulation of a politician’s proposal. For example, when the Italian general political elections began in 2018, the centre-right coalition proposed a revision of the tax system based on the flat tax principle, which had been promoted several weeks earlier by a think tank analyst named Bruno Leoni. However, the flat tax principle was not a new economic idea in an absolute sense. For example, Milton Friedman introduced a systematic theorisation of this concept, and several countries have applied this fiscal system.

2 However, occasionally, think tankers have transitioned into politics, even in Europe. For example, Enrico Letta knew Beniamino Andreatta because he was recruited from the staff of the Arel TT in 1990. Andreatta became minister of foreign affairs in 1993. As Letta was the only one of Arel’s members with a doctorate in European law, Andreatta nominated him as his chief-of-staff. After this experience, Letta enjoyed a successful political career and served as prime minister for a brief period (2013–2014).

3 Nevertheless, there are new Italian TTs that are not “vanity tanks,” even if they involve politicians. For example, the Tocqueville-Acton Liberal Catholics TT was founded in 2006 by Flavio Felice and Fabio Giuseppe Angelini and had on its scientific committee the right-wing Christian democrat Rocco Buttiglione. This TT has attempted to synergetically combine a free market theory with ethical principles found in the social doctrine of the Catholic Church.

4 The Research Europe Centre TT was run by socialists Giuliano Amato and Giorgio Ruffolo, while the Economic Policy Study Centre TT was closely associated with the Italian Republican Party. In a special issue on Italian TTs published by the international scholarly journal History of Economic Thought and Policy, Dafano (2017) studied the intellectual work of the Research Department of the Italian Industrial Association. In 1976, the new chairman (and past central banker) Guido Carli re-established this cultural laboratory in order to provide quantitative analyses to support the supply-side policy proposals of entrepreneurs. Michelagnoli (2017) examined the research centre affiliated with the Italian Confederation of Labour Trade Unions (CISL), which was founded by the economist Enzo Tarantelli, who significantly contributed to the debate on the revision of the wage indexation mechanism.

5 Piero Roggi (1987, 147) observed that new market-oriented economic ideas have influenced the CDP since 1977. In fact, at the 13th National Congress of the party, politician Ferrari Aggradi (1977, 203) made the following affirmation: “until now we firstly took into account the problems of support of the demand and we neglected the entrepreneurial capacities. Now we have to shift the focus of the political strategy on the productivity”.

6 Giulio Andreotti had a strong European commitment because of his prior experience as a young collaborator of Alcide De Gasperi. However, Andreotti’s approach was probably more a matter of realpolitik, which was different from the approach of other, more emotional, right-wing Christian Democrats, like Emilio Colombo. In general, the CDP believed that a “weak state had less sovereignty to lose” (McCarty 1997, 50).

7 See the school of Italian southernism, led by Pasquale Saraceno, which argued that European integration would not benefit all regions of the country equally.

8 In 1976, Christian democrat Giulio Andreotti presided over a government based on the indirect support of the communists. From 1978 to 1979, he presided over another government based on the direct support of the communists, with the only opposition coming from the radicals, liberals and nationalists. Andreotti held the role of prime minister because his personality guaranteed the interests of the Vatican and the US.

9 The “agreement for excluding” derived from the post-WWII Italy’s decision to accept US’ economic aids in exchange for Italy’s belong to the Atlantic alliance in the age of the “cold war.” Consequently, Italy’s government had to be guided by no communist politicians.

10 In December 1972, Andreatta, Siro Lombardini and Giancarlo Mazzocchi criticised Prime Minister Andreotti’s policymaking practices at a conference in Perugia. According to Mazzocchi (quoted in Franco 2010, 102), Andreotti’s lack of reply and dignified silence proved “his conception of economics as subordinated to politics. Andreotti disliked the economic world.”

11 Luigi Cappugi, full professor of economic policy at the University Tuscia of Viterbo, was one of Andreotti’s principal consultants.

12 Nesi was a devout Catholic and participated in the established CDP. However, he was also a friend of Enrico Berlinguer, the leader of the ICP. In 1946, Nesi and Berlinguer went to Russia together for a political trip. For this reason, the CDP ejected Nesi from the party. Subsequently, Nesi became a member of the ISP and supported Riccardo Lombardi’s left-wing socialist group.

13 The original statute prohibited the membership of industrial companies because of the possibility of a conflict of interest with Nomisma’s activities. The statute was revised in the mid-1980s.

14 It is commonly known that Nomisma was formed accidentally during a conversation held between Nesi and Romano Prodi while travelling.

15 Baldassarri belonged to the group known as the (Franco) Reviglio boys, along with Giulio Tremonti, Franco Bernabè, Alberto Meomartini and Domenico Siniscalco. They all supported liberal socialism.

16 Consider, for example, Gilberto Antonelli, Giulio Cainelli and Roberto Zoboli.

17 Consider, for example, Mario Pezzini (Organisation for Economic Co-operation and Development), Raul Ascari (World Bank), Orlando Arango and Paolo Munini (Bank of European Investments), and Jacob Skot, Marco Spinedi and Vito Cistulli (Food and Agriculture Organisation of the United Nations).

18 Consider, for example, Marco Fortis. He is the vice president of the Edison Foundation, a board member of the Carlo Erba Foundation, vice president of the Guido Degani Foundation and a board member of the RAI (a state-owned television enterprise).

19 Arel also maintained a strict relationship with the Adenauer Foundation of Berlin, which was one of the main TTs that was ideologically close to the German Christian democrats. Nomisma had a wide network of university scholars around the world.

20 At that time, Klein launched an innovative international project based on the use of econometrics for quantitative analyses and policies. He received the Nobel prize in 1980.

21 In 1947, Dossetti, Amintore Fanfani, Giorgio La Pira, Giuseppe Lazzati and Antonio Amorth founded a review entitled Cronache sociali (Social Chronicles). This group, called “the small professors,” contested the social market economy approach of De Gasperi within the CDP. In the early 1950s, Andreatta joined the Catholic University in Milan. Here, Andreatta collaborated with numerous scholars, including Siro Lombardini. Prodi earned his law degree at the Catholic University in Milan and wrote an economic history dissertation supervised by Lombardini, who recommended the young Prodi to Andreatta. Dossetti’s influence on Andreatta and Prodi was significant; Dossetti founded the Institute for Religious Sciences in Bologna in 1953 to valorise the pastoral reforms of the Second Vatican Council of the Catholic Church. In 1985, this institution became the Foundation for Religious Sciences John XXIII and was presided over by Andreatta until his death. In the history of the Catholic Church, Dossetti is famous for his emphasis on the separation of religion and social action.

22 In a recent interview, Romano Prodi affirmed the following: “The only thing that divided Andreatta and me was the role of the state in the economy … [Andreatta] embraced several economic doctrines deeply different from those of his early career. Andreatta tried to persuade me, but with no success. He believed that, as an industrial economist, I did not much care about macroeconomic equilibrium” (Sandonà 2017, 86).

23 For example, see the comparison between Andreatta’s and Prodi’s analyses of Sturzo’s cultural heritage. See Andreatta (1989) and Andreatta (1996) versus Prodi (1985). Second, Andreatta quoted Einaudi, but Prodi did not. Moreover, in his speech at the conference “Money and Christian Conscience” held in Bologna on 10–11 April 1987, Andreatta also repeatedly referred to Michal Novak, a distinguished scholar of the American Enterprise Institute, who was an outstanding supporter of the full compatibility between the free market economy and Catholic ethics.

24 At the European level, Prodi’s political turn from the First to the Second Republic evidently emerged because, as president of the European Commission from 1999 to 2004, he ended the tradition of Christian democrats serving as members of the European People’s Party. Prodi (later Enrico Letta) adhered to the Alliance of Liberals and Democrats for Europe.

25 Antonio Jannazzo (2003, 194) indicated that “if the CDP was engaged in controlling banks, economic organisms and the government, the ICP was engaged in controlling university chairs, publishing houses, mass media, cinema, and theatre.”

26 This document was signed by Giorgio Basevi, Michele Frattiani, Herbert Giersch, Pieter Koteweg, David O’Mahony, Michael Parkin, Theo Peeters, Pascal Salin and Niels Thygesen.

27 The group comprised Robert Triffin, Giovanni Magnifico, Alexandre Lamfalussy, Geoffrey Denton, Lord Cromer, Pierre Uri, Andrei Shonfield, Conrad Oort, J. van Ypersele, Norbert Kloten and Armin Gutowski.

28 The representatives of the academic world were Mario Albertini, Guido Montani, Dario Velo, Raimondo Cagiano de Azevedo, Franco Praussello, Giuseppe Usai and Alberto Majocchi.

29 In general terms, the EFM rejected the “instrumental federalism” of Friedrich von Hayek, who proposed the denationalisation of money and instead promoted the “constitutional federalism” of Lionel Robbins, who proposed an institutional architecture that had sovereignty in common with international and national governing levels.

30 Jacque Delors and Tommaso Padoa-Schioppa can be included as the heirs of this tradition. The latter elaborated on the theory of the “inconsistent quartet,” according to which the factors of production, goods and services, fixed exchange rates and autonomous national policies cannot freely move simultaneously for a given group of countries.

31 Guido Carli was the only person present at the EMU negotiations who had participated in the Bretton Woods negotiations in 1944. He had an extraordinary career, as he served as president of the European Payments Union (1950–1952), minister of international commerce (1957–1958), central banker (1960–1975), president of Confindustria (1976–1980), senator (1983–1992), and minister of the treasury (1989–1992).

32 The speakers were Arel scholars, including Agnelli, Aletti, Andreatta, Lombardini and Merloni; Giuseppe Petrilli, president of the Italian Council of the European Movement; Malcom Selsdon, member of the Chamber of Lords in the UK; Giacomo Perticone, president of the Italian Forex Club; Mario Mondello, general director of economic affairs for the Ministry of Foreign Affairs; Renato Ruggiero, Italian negotiator for the European Monetary System; Giovanni Coda Nunziante, president of the bank Monte dei Paschi of Siena; and Mario Usellini, a deputy of the CDP.

33 In 1979, elections to the European Parliament became direct. This change increased the level of interest in continental institutions and the inclusion of European citizens.

34 In 1976, at a conference organised by the Cespe TT, the Centre for the Study of Economic Policy of the ICP, Lombardini and Eugenio Peggio, editor of the journal Politics and Economics and secretary of the Cespe, respectively, “agreed that wages had grown excessively” (Cattabrini 2012, 82). Lombardini believed that only low wages must be 100%, while intermediate wages must only be partially indexed. He also believed that it was necessary to increase investment and stimulate planned public demand. In contrast, Peggio argued that it was necessary to increase employment and improve the conditions of the masses.

35 Prodi specialised in industrial economics and policy at the London School of Economics under Yamey’s supervision.

36 There were several other speakers, including Pierre Defraigne, a collaborator of the EEC Commissioner for Industry; Alberto Capanna, president of Finsider; Francesco Carpani Glisenti, president of the Industrial Association of Brescia; Walter Schafer, leader of the chemistry division of ECC; Carlo Sconamiglio, professor at the Bocconi University of Milan; Alberto Colli, vice president of the Italian Cotton Association; Tom Normaton, deputy of the British and European Parliament; Alexis Jacquemin, professor at the Catholic University of Louvain; Giorgio Ragazzi, professor at the Bocconi University of Milan; Marco Ricceri and Sergio Arzeni, scholars of the economic bureau of the syndicate CISL; Renato Ruggiero, Italian negotiator for the EMS; Paolo Savona, general director of the Italian Industrial Association; and Etienne Davignon, ECC commissioner for industry.

37 France had an inflation rate of 13.6%; Germany, 5.4%; Holland, 6.5%; the UK, 18%; Spain, 15.6%; Sweden, 13.7%; the US, 13.5%; Canada, 10.1%; and Japan, 7.8%.

38 CGIL was ideologically close to the ICP; CISL was closer to the CDP, and UIL was closer to the ISP. The unitary syndicate was divided into three components in 1950.

39 I refer to the CISL and UIL. The change in the workers’ syndicates was called the “turn of the EUR” because their meeting took place in a Congress palace situated in the headquarters of Rome called “EUR.”

40 Graziani criticised the economists who wrote the “Report on the Italian Economy” for the Cespe TT in April 1976 (Spaventa, Napoleoni, Antonio Pedone, Federico Caffè, Eugenio Peggio and Paolo Sylos Labini) because they wanted to establish “a second capitalist restoration” (Graziani 1976b, 15).

41 From 1981 to 1989, the Ministry of the Treasury continued to fix the base rate of government bonds. From 1981 to 1994, the Bank of Italy continued to intervene in a discretional manner in the stock exchange auctions of government bonds and to guarantee the check account, which was equal to 14% of expenses, thereby resulting in an annual public balance. Consequently, the independence process for the Italian Central Bank was initiated in 1981, completed in 1994, and concluded in 1998 because of the introduction of the European Central Bank.

42 The Andreatta-Formica disagreement was called “the godmothers’ quarrel,” and it provoked the resignation of Prime Minister Giovanni Spadolini.

43 In the 1990s, Italy liberalised capital movement and privatised state-owned enterprises. Mario Draghi, who was director of the Ministry of the Treasury at the time, oversaw both processes.

44 Andreatta (1984, 405) estimated that the public expense limit would equal 50% of the gross domestic product.

45 Helgadóttir (2016) highlighted the “expansionary austerity” mainstream tradition of the Bocconi boys, which was initiated by the narrative analyses of Luigi Einaudi and culminated in the sophisticated empirical studies of Alberto Alesina. In my opinion, the proposals of Andreatta and Monti can be included in this school of thought.

46 Frattiani and Spinelli (1997) underpinned a discontinuity in the approaches of the central bankers: Menichella and Baffi were eclectic, and Carli and Ciampi were orthodox. Azzolini and Marani (1984) supported that Ciampi was influenced by monetarism. However, Bertocco (1992) proved the continuity of the approaches of the central bankers and highlighted that the different monetary policies depended on the historical, cultural and mainly social context of the period. In the 1970s, the Bank of Italy set the objective of controlling the internal total credit, and in the 1980s, it set a series of intermediate objectives. Different from what the doctrine of monetarism predicted, “the monetary authorities never attributed a crucial role to money supply” (Bertocco 1991, 228).

47 However, Ciampi’s economic thought triumphed in the EMU negotiations because Prime Minister Andreotti and the Minister of Foreign Affairs Gianni De Michelis “entrusted almost entire responsibility” (Ludlow 1982, 147) to Ciampi, the Minister of Treasury Guido Carli, the Director General of the Ministry of the Treasury Mario Draghi, and the Deputy Director General of the central bank Tommaso Padoa-Schioppa. The domestic debate on EMU was “muted and limited” (Dyson and Featherstone 1999, 492) because “the policy momentum behind disinflation, stable exchange rates, central bank independence, and financial market stabilization was very much supportive of EMU” (Dyson and Featherstone 1999, 491–492). With only a few exceptions, such as Luigi Spaventa, the “Italian policymakers found a supportive academic climate” (Dyson and Featherstone 1999, 499) with regard to Italy joining the EMU.

48 I respectively refer to the following parties: the Italian Republican Party, the Italian Liberal Party, the Italian Democratic Social Party and the Italian Social Movement.

49 The CDP’s leadership was more progressive than its electorate.

50 At the time of the secularisation of society (see the results on the referendum on divorce and abortion), Ciriaco De Mita and the left-wing Christian democrats wanted the CDP to be additionally “secularised” in order to become a modern political force. However, Roberto Formigoni and the right-wing Christian democrats supported the necessity of the “re-Christianisation” of the party in order to revive its identity (Capperucci 2004, 320).

51 In 1976, the CDP and other centre-right European parties founded the European People’s Party.

52 Varsori (2017, 98) affirmed that Andreotti was “one of the few politicians who fully understood the important, even revolutionary, consequences of the final achievement that Economic and Monetary Union (EMU) would imply for Italy’s economic system.”

53 According to Michele Frattiani and Franco Spinelli (1997, 241), Andreatta was a political innovator because he “saw the importance of making radical changes and made decisions which perhaps appeared inconsistent with his self-interest.”