Italy’s pampered state sector braces for reform

Filed on April 16, 2007

ROME - Change is afoot in Italy’s public sector and most of those it would affect, from civil servants to teachers to traffic wardens, don’t like the prospect one bit.

Italy is notorious for its north-south wealth divide, but there is another, less immediately obvious division: between those who work for a private enterprise -- often themselves -- and those who work for the state.

Ask the former what they think of the latter and you will often hear words like lazy, privileged, inefficient. Data from the international World Values Survey shows public confidence in the state sector in Italy is among the lowest in Europe.

Romano Prodi’s government clearly doesn’t dismiss such judgments because it has pledged to reform the sector by introducing concepts like service, productivity, assessment and promotion based on merit rather than length of service.

The case for reform is compelling. In the last five years public sector wages have risen by almost 15 percent more than in the private sector, with no link to productivity.

Moreover, the vast majority of those pay hikes were due to automatic promotions based simply on length of service. But pay is only part of the problem.

‘In the public sector management of personnel is subject to heavy constraints, incentives are modest, the autonomy and accountability of management are often insufficient,’ Bank of Italy Governor Mario Draghi said in a recent keynote speech.

Perhaps not surprisingly, many public sector employees like it that way, and their trade unions are resisting the government’s plans for a shakeup.

‘I know I am privileged,’ said Stefania Braghetta, a 38-year old traffic warden from the north-eastern town of Ferrara.

‘Until five years ago I worked twice as hard for a private accountancy firm. Now my back is covered. It makes no difference whether I work or not. I don’t abuse the system but I easily could, for example by taking sick days whenever I need a rest.’

A draft accord signed by the government and unions in February looked good on the surface. It pledged, among other things, annual assessments; performance-based promotions; made it possible to fire managers in cases of extreme inefficiency; and increased staff mobility from one department to another.

Union power

However, the framework deal was widely criticised because of the strong role the unions will maintain in its application.

‘Any decisions must be ‘concerted with’ (read: made by) the trade unions themselves,’ wrote Bruno Stagnaro, a director of the free-market Bruno Leoni think-tank, in a recent article. ‘The unions are one of the key reasons the public sector is so inefficient.’

Economics Professor Tito Boeri said a new public pay deal agreed this month should have been withheld until productivity- based reforms were in place. But he urged the government not to give up and said it was wrong to assume it would lose popularity if it took on the unions.

‘People say the votes of three million public sector workers are at stake,’ he wrote in a recent column in La Stampa daily. ‘But these calculations ... forget the public sector salaries are paid by tax payers, who are far more than the state employees.’

With full job security and shorter working hours than their private sector peers, most state employees dismiss the proposals for change.

‘Merit-based promotions are fine in theory, but this is Italy so we all know that good assessments would come from favouritism, not real merit, said Cristina Galeotti, a biologist at Rome’s San Camillo hospital.

Promotions based on time in service is ‘the least bad system’, said Galeotti, who argued that previous attempts to raise health service productivity had already gone too far at the expense of quality of service.

Traffic wardens’ careers in Ferrara are already determined by annual assessments, said Braghetta.

‘But it’s all a sham and performance never improves because the public sector is based on politics, not efficiency. The bosses know they are where they are through patronage, so they have no interest in making things work better.’

Antonella Brighi, who has been a psychology lecturer at Bologna University for four years after 21 as a school teacher, said chronic inefficiencies in the education system are due to disorganisation from the top down and workers’ complacency.

‘I doubt things will improve,’ she said. ‘The Italian mentality is about getting by and skirting round the rules. That goes hand-in-hand with a suspicion of merit and evaluation because they are seen as always arbitrary and never objective.’

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