The Economist gets Renzi's reform wrong

Attack the reform for what it does, not what it doesn't do

The Economist has published a surprising editorial which comes out against reforms to the Italian constitution proposed by the Renzi government. There are a number of points in the argument which left me perplexed. Let me work my way through it.

“Mr Renzi’s constitutional amendment fails to deal with the main problem, which is Italy’s unwillingness to reform”

I don’t understand this claim. The constitutional amendment is a reform. You might argue that it’s a bad reform, or an unnecessary reform, or that other things deserve to be reformed more. But this reform doesn't preclude other reforms. Indeed one of the arguments given in favour of the reform is that it will make future reforms more likely by ending the system of perfect bicameralism (on which more below).

“And any secondary benefits are outweighed by drawbacks — above all the risk that, in seeking to halt the instability that has given Italy 65 governments since 1945, it creates an elected strongman. This in the country that produced Benito Mussolini and Silvio Berlusconi and is worryingly vulnerable to populism”

This is the start of the confusion between the electoral system (which is not the subject of the referendum) and the constitutional reform (which is the subject of the referendum). It’s a confusion which recurs at several points.

Even if you think the two things are necessarily combined, then I don’t understand how invoking either Mussolini or Berlusconi helps the argument here.

Suppose the argument is that a proportional electoral system — or a system at least as proportional as the present one — prevents the occurrence of strong-men. In that case, the ease with which Berlusconi — who came to power under a variety of mixed electoral systems — is introduced as an example hinders, rather than helps the argument.

“Granted, the peculiar Italian system of “perfect bicameralism”, in which both houses of parliament have the exact same powers, is a recipe for gridlock. Laws can bounce back and forth between the two for decades. The reforms would shrink the Senate, and reduce it to an advisory role on most laws, like upper houses in Germany, Spain and Britain. In itself, that sounds sensible.

Go on…

However, the details of Mr Renzi’s design offend against democratic principles. To begin with, the Senate would not be elected. Instead, most of its members would be picked from regional lawmakers and mayors by regional assemblies.”

I await the Economist’s criticism of the Bundesrat for “offending against democratic principles”.

“Regions and municipalities are the most corrupt layers of government, and senators would enjoy immunity from prosecution. That could make the Senate a magnet for Italy’s seediest politicians”.

This claim ignores the present system. Senators are already immune from prosecution. What's more, recent senators have hardly been paragons of moral virtue. People like Nino Randazzo have been an embarrassment. The new system gets rid of these people — and with one-third as many senators, one would have to argue that the corrupting influence of 95 regional and municipal delegates was greater than the corrupting influence of 315 Senators.

“At the same time, Mr Renzi has passed an electoral law for the Chamber that gives immense power to whichever party wins a plurality in the lower house. Using various electoral gimmicks, it guarantees that the largest party will command 54% of the seats. The next prime minister would therefore have an almost guaranteed mandate for five years”

I agree that the electoral law is gimmicky. I don’t like it. But I repeat my earlier point: it is not the subject of the referendum.

“That might make sense, except for the fact that the struggle to pass laws is not Italy’s biggest problem. Important measures, such as the electoral reform, for example, can be voted through today. Indeed, Italy’s legislature passes laws as much as those of other European countries do. If executive power were the answer, France would be thriving: it has a powerful presidential system, yet it, like Italy, is perennially resistant to reform”.

In that case, let’s consider the possibility that the constitutional reform has neutral effects on other types of reforms sought by the Economist. That’s not a reason to block the constitutional reform — it’s just a reason for arguing that reform shouldn’t stop there.

“The risk of Mr Renzi’s scheme is that the main beneficiary will be Beppe Grillo, a former comedian and leader of the Five Star Movement (M5S), a discombobulated coalition that calls for a referendum on leaving the euro. It is running just a few points behind Mr Renzi’s Democrats in the polls and recently won control of Rome and Turin. The spectre of Mr Grillo as prime minister, elected by a minority and cemented into office by Mr Renzi’s reforms, is one many Italians — and much of Europe — will find troubling.

Under the new electoral system, it would be difficult for the M5S to enter into government “elected by a minority”. The new electoral system requires a run-off ballot between the top two parties in the event that no party secures 40% of the vote or more. In order to secure a parliamentary majority, the M5S would have to win the run-off election, and thus a majority of those voting in the second round.

Were the M5S to win this majority, Grillo (as someone who has a conviction for manslaughter against his name) would not become Prime Minister, but one of the other leading figures in the M5S would. Of course, Grillo might exercise considerable influence without becoming PM.

Grillo may in any case become more influential as a result of leading the opposition to the proposed reform.

“One drawback of a No vote would be to reinforce the belief that Italy lacks the capacity ever to address its manifold, crippling problems. But it is Mr Renzi who has created the crisis by staking the future of his government on the wrong test (see article). Italians should not be blackmailed. Mr Renzi would have been better off arguing for more structural reforms on everything from reforming the slothful judiciary to improving the ponderous education system. Mr Renzi has already wasted nearly two years on constitutional tinkering”.

I think this underestimates the other work that the Renzi government has done through the Jobs Act of 2014/5. (If you want to read more about the Jobs Act, read the chapter in this book!)

This paragraph also ignores the fact that much of the tinkering with the electoral law was carried out because the Constitutional Court invalidated the previous electoral law, and a replacement was needed. Sometimes, constitutional tinkering is necessary.

“The sooner Italy gets back to real reform, the better for Europe”

Which brings us to the question never addressed in the editorial — whether or not the constitutional reform will make it more or less likely that the other reforms sought by the Economist will be implemented.

“What, then, of the risk of disaster should the referendum fail? Mr Renzi’s resignation may not be the catastrophe many in Europe fear. Italy could cobble together a technocratic caretaker government, as it has many times in the past. If, though, a lost referendum really were to trigger the collapse of the euro, then it would be a sign that the single currency was so fragile that its destruction was only a matter of time”

“Only a matter of time”? Okay then, let’s try some risky things and see if systems affected by those risky things subsequently fail. If they fail, we can always console ourselves with the knowledge that their failure was only a matter of time…

The Economist's main argument seems to be that Renzi is not doing the things that the Economist most wants him to do. But this is a weak argument. It's not even an argument for holding out for the full loaf instead of half a loaf. It's an argument for voting down half a loaf in favour of a cronut — or possibly a cruffin. But in Italy, I imagine a cronut (rather than a delicious cornetto all'albicocca) might be quite hard to find.