Lessons to be learnt from Italy s Flexible Federalism. Alessandro Colombo, Éupolis Lombardia
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1 Lessons to be learnt from Italy s Flexible Federalism Alessandro Colombo, Éupolis Lombardia Halifax, The Halifax Club, October 29, 2012
2 Index 1. Italian Regionalism Evolution Constraints 2. Lombardy Region (1) Where / What It Is Economic and institutional feature Regulatory power and principle of subsidiarity 3. Subsidiarity Principle what is it? Dimensions / Anthropological Roots 4. Lombardy Region (2) A Model of Governance Implementation in Education and Health 5. Lessons to be learned
3 1. Italian regionalism
4 20 regions Established in 1970s NO federal system Regulatory power The MOST in everything POPULATION : 9,917,714
5 Constitutional law 1/1999 Regions are provided with autonomy over their own statute, form of government, and electoral law The President of the region has to be directly elected by citizens; he/she appoints and sacks regional government ministers
6 Constitutional reform 2001/I Exclusive powers in matters not reserved to the State (further exclusive competences); No longer hierarchical superiority of the state over local authorities (as well as pre emptive central government control on regional legislation); Principle of subsidiarity (art. 118): vertical: administrative functions are allotted to territorial authorities which are closest to citizens; horizontal: State, regions, and local authorities favour the autonomous initiatives of citizens, both single and aggregated, for the functioning of generalinterest activities; Regions may levy their own taxes and are autonomous as for their own expenditure fiscal federalism (art. 119).
7 Constitutional reform 2001/II Exclusive national competences are explicitly defined to include: foreign and EU affairs, defence, immigration; religious affairs; state institutions and administration; the currency, saving, and state taxes; security and the judiciary; basic civil and social rights to be guaranteed throughout the national territory, social security; national, provincial, and communal electoral law; safeguarding of the environment; culture.
8 Constitutional reform 2001/III Shared State regions competences international relations of the regions, foreign trade, the labour market, education, research, health, food, sport, civil defence, land use planning, ports and airports, major transport infrastructures, energy, communication, environment and culture promotion. Regions administrative regulative competence Central government general framework for regional action. In these fields (Art. 117), national law sets the main principles and regions issue regulations.
9 Italian regionalism: constraints/i 3 main limits to regional autonomy: (a)national level legislation still prescribes the content of regional powers and activities in detail (conflicts before the Constitutional Court) (b)fragmentation of local authorities; (c)little financial autonomy: Rigid budget Un equal equality.
10 Italy Where does the money go?
11 Italian regionalism: constraints/ii Regional differences between fiscal revenue and public expenditure average Per capita ( ) 8,000 6,000 4,000 2, ,000 4,000 Source: Elaboration of Éupolis Lombardia 11
12 Fiscal federalism The law no. 42 of 2009 tries to overcome these limits by: From historic expenditure to standard costs for public services make up the basis for resource distributions to the regions; strengthening regional financial autonomy; national equalization fund. The new system should come into force from 2013.
13 The Decentralisation Pendulum Less State More Region
14 The Classic Federal Model Federal State Local Authorities Federal Government
15 The Classic Centralised Model Central Government Regions Local Authorities Il governo centrale stabilisce e controlla le competenze di regioni ed enti locali, i due livelli infrastatali sono indipendenti
16 2. The Lombardy region
17
18 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Population Eurostat, 1th January 2010
19 GDP (millions of Euro) 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Eurostat 2008
20 Lombardy GDP per capita, year 2010 Sources: Éupolis Lombardia and Istat
21 Lombardy Employment rate, year 2011 Sources: Éupolis Lombardia and Istat
22 Lombardy Unemployment rate, year 2011 Sources: Éupolis Lombardia and Istat
23 Lombardy Economic sectors Services Others Agricolture Manufacturing No. of companies (15.7% of the total in Italy) Most of them join industrial districts Sources: Éupolis Lombardia and Istat 2012
24 Lombardy Enterprises n. of employees per firm Source: Asia, 2007
25 Lombardy Regional Government: Constraints / 1 Regional Government coexists with other State bodies in Lombardy (e.g. state railways and motorways and state-owned companies). It has only 5000 staff 12% of the public employees. (Remaining 88% = persistent centralized structure).
26 Lombardy Regional Government: Constraints / 2 Nationally centralized decision-making on public finance. Nation-based tax system.
27 Lombardy: a Model of Governance Since 1995 a new model of governance guided by a vision inspired by the principle of subsidiarity. A fresh and original approach in Italy. fixed in the Regional statute (2008), whose fundamental values are: - centrality of persons - protection of family - subsidiarity - partnership - role of functional and social autonomies
28 3. The Principle of Subsidiarity
29 What it is? A definition in all levels of human coexistence, predominant individuals and communities must not replace the smaller ones in the exercise of their functions, but on the contrary they should help them (from Latin subsidium afferre ) in the fulfilment of this task
30 Originis Ancient principle Pius XI (Quadragesimo Anno, 1931) defined it in a systematic manner for the first time ever in.
31 Subsidiarity Origins «Under the principle of subsidiarity, in areas which do not fall within its exclusive competence, the Union shall act only if and in so far as the objectives of the proposed action cannot be sufficiently achieved by the Member States, either at central level or at regional and local level, but can rather, by reason of the scale or effects of the proposed action, be better achieved at Union level» The Treaty on European Union, art. 5 para. 3 31
32 Subsidiarity Origins It is a fundamental principle of social philosophy, fixed and unchangeable, that one should not withdraw from individuals and commit to the community what they can accomplish by their own enterprise and industry Pius XI Quadragesimo Anno
33 Subsidiarity Origins Pius XI Quadragesimo Anno 1931 So, too, it is an injustice and at the same time a grave evil and a disturbance of right order, to transfer to the larger and higher collectivity functions which can be performed and provided for by lesser and subordinate bodies. In as much as every social activity should, by its very nature, prove a help to members of the body social, it should never destroy or absorb them. 33
34 «[ ] Man alone of the animals possesses speech. The mere voice, it is true, can indicate pain and pleasure, and therefore is possessed by the other animals as well (for their nature has been developed so far as to have sensations of what is painful and pleasant and to indicate those sensations to one another) Aristotle b.c. But speech is designed to indicate the advantageous and the harmful, and therefore also the right and the wrong; for it is the special property of man in distinction from the other animals that he alone has perception of good and bad and right and wrong and the other moral qualities [ ]»
35 «The aid of the community is necessary to him for two reasons. First of all to obtain what he needs to live [...]» «But living in a community also enables man to reach perfect sufficiency of life, that is not only to live, but also to live well, having all that is necessary for this purpose» Tommaso d Aquino «[...] But it must be observed that this whole, that is the political community, or the family community, possesses only a unity of order and this is not an absolute unity, so that the parts of this whole can have a sphere of action distinct from that of the whole, just as in an army the soldier may carry out actions that are not those of the entire army».
36 «[ ] For ownership of a realm belongs to the people, and administration of it to the king» Johannes Althusius «For however great is the power that is conceded to another, it is always less than the power of the one who makes the concession, and in it the pre-eminence and superiority of the conceder is understood to be reserved. Whence it is shown that the king does not have a supreme and perpetual power above the law, and consequently neither are the rights of sovereignty his own property, although he may have the administration and exercise of them by concession from the associated body»
37 John Locke «But though men when they enter into society give up the equality, liberty, and executive power they had in the state of nature into the hands of the society, to be so far disposed of by the legislative as the good of the society shall require yet it being only with an intention in every one the better to preserve himself, his liberty, and property (for no rational creature can be supposed to change his condition with an intention to be worse), the power of the society, or legislative constituted by them, can never be supposed to extend farther than the common good, but is obliged to secure every one's property [...]»
38 «It is easy to foresee that the time is drawing near when man will be less and less able to produce, by himself alone, the commonest necessaries of life. The task of the governing power will therefore perpetually increase, and its very efforts will extend it every day. The more it stands in the place of associations, the more will individuals, losing the notion of combining together, require its assistance: these are causes and effects that unceasingly create each other». Alexis de Toqueville
39 John Stuart Mill The objections to Government interference, when it is not such as to involve infringement of liberty, may be of three kinds. The first is, when the thing to be done is likely to be better done by individuals than by the Government. Speaking generally, there is no one so lit to conduct any business, or to determine how or by whom it shall be conducted, as those who are personally interested in it. The second objection is more nearly allied to our subject. In many cases, though individuals may not do the particular thing so well, on the average, as the officers of Government, it is nevertheless desirable that it should be done by them, rather than by the Government, as a means to their own mental education The third[...] is the great evil of adding unnecessarily to its power. Every function superadded to those already exercised by the Government causes its influence over hopes and fears to be more widely diffused, and converts, more and more, the active and ambitious part of the public into hangers-on of the Government, or of some party which aims at becoming the Government.
40 Significance 1/2 The common theme that unites the ancient authors is the primacy of personal and inter-relational responsibility over all other political powers or structures. Society has first priority and functional precedence relative to the state; the only raison d être of the state itself (in any of its manifestations) is to sustain and support (subsidium afferre) the creativity of individuals and social groups.
41 Significance 2/2 The result is two-fold: - functions that can be adequately and effectively performed at lower levels should never be attributed to higher-level institutions or communities; - the task of the higher-level institutions / communities is to help the lower-level ones as needed and only to the extent that they are unable to fulfill their assigned functions.
42 But why? / 1 You more than you An in-finite desire
43 «O, reason not the need: our basest beggars Are in the poorest thing superfluous: Allow not nature more than nature needs, Man's life's as cheap as beast's: thou art a lady; If only to go warm were gorgeous, Why, nature needs not what thou gorgeous wear'st, Which scarcely keeps thee warm. But, for true need,-- You heavens, give me that patience, patience I need!» King Lear William Shakespeare
44 But why? / 1 An in-finite POSITIVE desire
45 But why? / 2 John Locke The principle is based on the hypothesis that a person, individually and in association with other persons, is potentially able to confront collective needs and to satisfy them. Trust vs. suspect Alexis de Toqueville Thomas Hobbes
46 4. The Lombardy region a model of governance
47 Subsidiarity Model Key points PLURALISM OF OFFER - Separation of suppliers and programmers - separation of propriety and management FREEDOM OF CHOICE - Accreditation - quality evaluation FISCAL SUBSIDIARITY - Coupons - Vouchers - mechanism of tax exemptions and allowances 47
48 Lombardy Education Vouchers Beneficiaries Average amount Total (n. of students) per student 2000/ , ,740, / , ,012, / , ,024, / , ,092, / , ,054, / , ,889, / , ,123, / , ,388, / , ,777, / , ,226, / , ,930, / ,194,896 48
49 Lombardy Education Vouchers 70, , ,000 55,000 50, Beneficiaries (n. of students) Average amount per student 45, , Sources: Elaboration of Éupolis Lombardia 49
50 Lombardy Education Vouchers Beneficiaries Total budget Average amount Amount (n. of students) per student at prices 2000/ ,241 30,740, / ,527 36,012, / ,914 37,024, / ,404 40,092, / ,044 42,054, / ,805 43,889, / ,411 45,123, / ,594 45,388, / ,440 44,777, / ,299 50,226, / ,418 50,930, / ,194,
51 Lombardy Education Vouchers , , , , ,000 30,000 20,000 Average amount per student Amount at prices Beneficiaries (n. of students) , Sources: Elaboration of Éupolis Lombardia 51
52 2. The service coverage Facts Healthcare public structures 15 ASL (Local Health Authorities) 85 Health and Social Services Districts (~100,000 people) 29 Hospital Trust (HT) managing 97 local hospitals 17 IRCCS (Scientific Institutes for Research, Hospitalization and Health Care) More than 200 Guard Medical Services More than 200 health care structures accredited pharmacies 52
53 Governance practices and policies/v Example of policy sectors: the Regional health care service Lombardy public expenditure on services (2010) Healthcare Social Services Professional Training & Education Education Organization Other Social Housing Territory Transport Tourism Industry, Commerce, Handicraft Agriculture martedì 30 ottobre 2012 (Source: Brenna, 2011) 53
54 Health care expenditure (2010) Total number of patients treated: (Lombardy Data Bank of Patients) Lombardy has guaranteed the budget balance in public health expenditure since The total health care expenditure: ,377 ML Euro, which represents the 80% of the Regional Expenditure in public services. The expenditure is constantly growing, on a base year by the 3.1% compared to 2009 (Ministry of Finance, 2012). Lombardy has the highest rate of active mobility from other regions about 10% and up to 50% in some specialties, such as oncology and cardiology (which accounted more than the 36% revenue between 2000 and Decrease nr of long term hospitalisation. 54
55 The pro capite health expenditure composition (2010): Costs of the NHS Care provided by the private and accredited services Care provided by the public services Total Expenditure % euro procapite % euro procapite Lombardy 43, , Italian avarage 36, , (Source: Relazione sullo stato sanitario del paese (Report on the National Well-being), Ministry of Health, 2012) martedì 30 ottobre
56 5. Lessons to be learned
57 Lessons / 1 Trust Social capital: cause or effect? Primacy of civil society take it seriously???? No quasi market No esternalisation Do decentralisation
58 Lessons / 1 No less state! (a different one) Freedom of choice System of incentives Evaluation
59 Trust much better A central power, regardless of how civic and wise it could be, would never embrace all particularities of social life A. de Tocqueville 59
60 Thank You 60
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