The Political Economy of Unmediated Democracy: Italian Austerity under Mario Monti

This article explores the political economy of reform under the technocratic government of Mario Monti. Unlike the technocratic governments of the 1990s, the Monti interregnum was an experiment in unmediated democracy, in which a government is actively supported neither by political parties nor by encompassing social groups. Italian political leaders adopted unmediated democracy because of the underlying interest group conflicts in the Italian political economy. Unmediated democrats such as Monti can impose bitter medicine on a stalemated society when it is in a stage of acute crisis, but the passage of longer-term reforms requires a social coalition to support those reforms beyond the critical stage of crisis. Thus the government implemented budget cuts, but liberalisation and institutional reform stalled in the face of opposition. Italy is unlikely to be durably reformed by a government that is not anchored to society through political parties or interest groups.