Reforms guided by consensus: The welfare state in the Italian transition

A wave of reforms was introduced in Italy during the 1990s in the field of pensions and in the labour market. In many respects, these reforms have substantially redesigned the overall profile of the Italian welfare state as it had developed under the so-called First Republic (1948-92). Pension expenditure has been brought under control and the pension formula has been substantially rationalised. A clear shift from passive to active policies is visible in the labour market, which is also beginning to become more flexible. The reforms of the 1990s have been introduced via an increasingly well-articulated system of 'concertation' between the government and the social partners. The negotiated character of the reforms is largely responsible for their success. The politico-institutional transition of the domestic political system and the dynamics of European integration both explain in turn the emergence of this new style of policy making.