OECD Economic Surveys: Italy 2021

Description

Executive summary The economy is emerging from the COVID-19 pandemic Supporting a greener, job-rich recovery is the priority Improving public sector effectiveness is key to sustaining the recovery 1 Key policy insights The COVID-19 crisis hit a weakening economy Successive COVID waves necessitated extensive mobility restrictions The economic and social impact of the pandemic has been severe The policy response cushioned the crisis’ impact on firms and households – but the vulnerable remained heavily affected Support is evolving as the recovery takes hold The recovery will be gradual but subject to risks The COVID-19 crisis has exacerbated some macro-financial vulnerabilities Bankruptcy risks have increased but banks are better equipped to manage them Risks to public finance sustainability A structural reform package for a sustained, green and inclusive recovery The National Recovery and Resilience Plan prioritises investment and structural reforms Supporting more effective public investment spending Efforts to raise private investment must reach the services sector Improving access to equity financing could boost business investment The green transition requires credible, long term commitments to carbon pricing Boosting productivity requires addressing regulatory obstacles and more concerted digital skill development Weak productivity is concentrated in the services sector and seems linked to excessive regulation Digitisation needs to be supported to boost productivity The planned insolvency code should be implemented alongside measures to improve their efficiency Civil justice efficiency needs to improve Tackling corruption could help improve confidence Raising employment, in particular for women and youth Deepening access to adult learning Public employment services need to be better managed Tax reforms could finance a lower labour tax wedge Main findings and recommendations References 2 Strengthening Italy’s public sector effectiveness A more effective public sector is essential to address Italy’s challenges Revisiting what interventions the public sector makes in the economy Reforming budget processes to reallocate funding to support growth Italy’s growth-enhancing spending is low, despite rising spending overall Using performance indicators well to improve spending decisions Spending reviews to reallocate spending Making the regulatory system more efficient, more effective, and less burdensome Italy’s stock of regulations and their enforcement weigh on private and public sector activity Reviewing and cutting the stock of regulations and processes would improve their effectiveness Improving how the public sector delivers An agile public service empowered to deliver Lifting barriers to public servants acting with confidence Rewarding performance, boosting skills and supporting mobility Agile and reactive hiring to rejuvenate the workforce, transmit experience and fill skill gaps Strengthening procurement for swifter and higher quality spending Far-reaching procurement reforms have been unwound due to slow implementation and capacity constraints Improving procurement performance requires strengthening staff and organisations Realising the potential of the digital age for a more effective public sector Better leveraging who across the government delivers public services and investments The contribution of multi-layered government to public sector effectiveness Improving delivery of public investment by subnational governments Strengthening subnational governments’ capacity to implement public investments Ensuring public enterprises effectively provide public goods and services Policy recommendations References Blank Page