Far from being a factor contributing to the economic stagnation of the 1990s, the Italian banking and financial system with its structural transformation and improved performance worked and is working in the opposite direction, fostering growth. Further gains in the efficiency of the financial industry can make a significant additional contribution to raising the Italian economy’s growth potential.
KeywordsCorporate Governance Financial System Institutional Investor Financial Development Pension Fund
Unable to display preview. Download preview PDF.
- 1.R.C. Merton and Z. Bodie, ‘A Conceptual Framework for Analyzing the Financial Environment’, in D.B. Crane et al. (eds), The Global Financial System: A Functional Perspective, Harvard Business School Press, Cambridge, MA, 1995.Google Scholar
- 3.S. Kuznets, Modem Economic Growth: Rate, Structure, and Spread, Yale University Press, New Haven, CT, 1966, p. 81. In economies in which the service sector is increasingly preponderant, these factors tend to become even more important. An advanced service economy is inconceivable, has no chance of developing, in a society lacking in education.Google Scholar
- Educational shortcomings block growth both on the supply side and in the demand for services and human capital. For a long-term quantitative treatment, see A. Maddison, Monitoring the World Economy 1820–1992, OECD, Paris, 1995, tables 2–6 (Successive Steps in Growth Accounting, 1820–1992’), pp. 41–2.Google Scholar
- 4.W.J. Baumol, Entrepreneurship, Management, and the Structure of Payoffs, MIT Press, Cambridge, MA, 1993Google Scholar
- On the various theories of the entrepreneur, see also M. Casson, The Entrepreneur: An Economic Theory, Martin Robertson, Oxford, 1982.Google Scholar
- 5.Another illustrious victim of this philological superficiality is Joan Robinson. She has been singled out as the extreme case of a theoretical economist who supposedly considered the financial structure to be entirely endogenous, hence practically irrelevant, to the process of growth. Where enterprise leads finance follows’ is the phrase of hers most frequently cited, and most tautologically when taken out of context, by this literature. It is remarkable that a student of Keynes’s should be accused of underestimating the importance of money and finance. What is most surprising is that in that same book, in those same pages, practically in the same passage, the significance of finance is recognized, and Robinson even refers explicitly to the ‘legal and institutional arrangements and the habits of lenders’ (J. Robinson, The Rate o Interest and Other Essays, Macmillan, London, 1952, p. 86).Google Scholar
- 7.J.A. Schumpeter, Business Cycles:A Theoretical, Historical, and Statistical Analysis of the Capitalist Process, McGraw—Hill, New York, 1939, vol. 1, p. 116 (italics added).Google Scholar