Italy: A Tale of Path-Dependent Public Sector Shrinkage

The chapter analyzes cutback management in Italy as a response to the 2008-2016 sovereign debt crisis, with a focus on public employment. Drawing on the historical institutionalist approach, the impact of the sovereign debt crisis is considered in the context of the legacies of the response to a previous severe fiscal crisis which occurred in 1992. Findings reveal how limitations emanating from the exceptional turbulence of the Italian political system combined with legacies, eventually further reinforcing cutback dynamics which have been progressively consolidated into the public system since the 1992 crisis. Public administration has been considered just as a source of public expenditure to be squeezed rather than as a provider of public services in need of modernization