Small-firm development and political subcultures in Italy

Small-firm development can be considered as an essential aspect of the Italian adjustment to economic and social tensions in the last decade. While the role of a particular social context (extended family, local community, rural-urban interpenetration) in this pattern of economic growth has been widely recognized, less attention has been drawn to the local political system. The most typical small-firm regions are characterized by distinctive political subcultures: the Communist one in the central regions and the Catholic/Christian-Democratic one in the north-eastern areas. The paper argues that political subcultures favoured a localist regulation of the small-firm economy through their influence on industrial relations and the activity of local governments. On these bases, a social compromise was established, which brought about high levels of economic flexibility. Unions and local governments mitigated the social costs of economic adjustments in the industrial districts and fostered a local redistribution of the benefits accruing from economic growth.