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Home » Archive » Deregulation As A Means Of Social Policy?

Laura Chierroni
Deregulation As A Means Of Social Policy?
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Deregulation poses serious challenges for Italian legislators. While the EU has adopted a liberal approach to this process, encouraging the removal of restrictions on free competition, the implementation of EU directives has proven to be extremely difficult in Italy for two main reasons: the resistance opposed by the so-called “close corporations” of established market operators, and the potential negative impact of deregulation on social welfare. The aim of this paper is to determine whether and on what conditions deregulation can positively impact social interests. As a first step, the legitimacy of existing limits to competition is tested by taking into account two market sectors, the Italian taxi and pharmacy services, which are examples of close corporations and, as such, are characterized by positions of privilege and little or no competition. Subsequently, the obstacles to free competition, which are a distinctive feature of these services, are analyzed in order to assess whether their total removal can actually improve social welfare. A series of auxiliary measures aimed at mitigating the social risks of extensive deregulation are then examined and their effectiveness is evaluated. The results found in this paper show that a massive process of deregulation, such as the one promoted by the EU, cannot guarantee long-term social benefits. Sustainable economic growth can only be achieved by means of a “supervised deregulation process” that is by removing barriers on competition while also preserving those limits which are essential to ensure the protection of social welfare. It is concluded that Italian legislators are facing the difficult task of balancing the nation’s obligation, as a member state, to meet EU requirements in terms of deregulation, and the government’s duty to safeguard domestic social welfare.

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