Why Italy Is A Horrible Place To Do Business In One Chart

Today, Italian prime minister Enrico Letta announced that he would tender his resignation to pave the way for party ally Matteo Renzi to form a new government.

Renzi, the leader of Italy’s Democratic Party (PD), has voiced frustration with the slow pace of reforms that need to be enacted to get the Italian economy back on the right track.

Perhaps coincidentally, the International Monetary Fund released today a new working paper — examining the need for reforms in Italy’s judicial system — from which we pull this chart.

“By many metrics, the performance of the Italian justice system is well below European and OECD averages,” write IMF researchers Sergi Lanau, Gianluca Esposito, and Sebastiaan Pompe.

“For example, it takes an average of 1,185 days to enforce a contract in Italy, more than twice the OECD high-income country average (OECD, 2013, and Council of Europe’s European Commission for the Efficiency of Justice (CEPEJ), 2012). Similar statistics from the 2013 EU Justice Scoreboard show that relative to its European peers, Italy scores poorly on the time needed to resolve administrative, civil and commercial cases.”

Of course, reforms are needed in many other areas, but the woes of Italy’s judicial system are a good analogy for the state of its governmental institutions.

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