National committee for the formalisation of irregular work, Italy

About

Country: 
Italy
Sectors: 
Public sector
Target Groups: 
employers/purchasersgovernmentsectoral organisationsworkers/suppliers

 

The National Committee for the Formalisation of Irregular Work was created in 1998. The main objectives of the initiative include: creating an institutional network between the central government and regional authorities, with the aim of gaining knowledge about the qualitative and quantitative characteristics of the informal economy and proposing formalisation policies, encouraging commitment among workers and employers to be tax compliant, and fighting undeclared work.

 

Background

In 1998, the then centre-left government headed by Romano Prodi set up agencies at various institutional levels with the responsibility for tackling the problem of the informal economy, as defined by Article 78 of Law No. 448/98. These new organisations include the following:

  • National Committee for the Formalisation of Irregular Work (Comitato nazionale per l’emersione del lavoro non regolare) – Initially this office was under the control of the Presidency of the Council of Ministers (Consiglio dei Ministri), but in 2004 it was transferred under the auspices of the Ministry of Labour and Social Security (Ministero del Lavoro e della Previdenza Sociale). The committee comprises ministers and other officers from budgetary control agencies, as well as welfare and safety agencies. Although the agency was set up by a left-wing government, it remained in place throughout the subsequent reign of the right-wing coalition government under Silvio Berlusconi.
  • Regional and Provincial Commissions for non-registered labour.
  • Tutors for the formalisation of labour, which includes post-graduates or social workers responsible for identifying and analysing unregistered workers in various areas of the country and coordinating policies with the regional and provincial commissions, as well as the president of the national committee, to help transfer these workers to the official labour market.

The actors involved in the implementation of the project included representatives from the:

  • National Council for Economics and Labour (Consiglio Nazionale dell'Economia e del Lavoro, CNEL)
  • Tax Authority (Agenzia delle Entrate);
  • National Social Security Institute (Istituto Nazionale Previdenza Sociale, Inps);
  • Labour Inspectorate;
  • National Statistics Institute (Istituto Nazionale di Statistica, Istat).

The initiative began in January 1998 and is still ongoing. The main target groups of the project are private institutions and public authorities.

Objectives

The main objectives of the initiative include:

  • creating an institutional network between the central government and regional authorities, with the aim of gaining knowledge about the qualitative and quantitative characteristics of the informal economy and proposing formalisation policies;
  • encouraging commitment among workers and employers to be tax compliant;
  • moving workers from undeclared work to regular jobs, particularly in sectors where undeclared work is common.

Specific measures

The President of the National Committee, Luca Meldolesi, who has gained a firm knowledge in the informal economy since the committee’s foundation, has worked to establish a network of tutors for regularisation purposes. The task of these tutors is to liaise with regional and provincial commissions to obtain direct information on irregularities in their respective regions and to decide on suitable actions to be taken.

Connections with other agencies – such as the Italian Financial Police (Guardia di Finanza), Inps and the Labour Inspectorate – have also allowed for more effective problem-solving in relation to undeclared work.

Evaluation and outcome

Evaluations of the initiative are still in progress.

Achievement of objectives

Although the actors involved in the project have begun to work together to combat undeclared work, their level of cooperation has not been entirely satisfactory.

On the other hand, knowledge of the complex phenomenon of the informal economy has improved, and today more and better methods exist for studying this phenomenon. Moreover, policymakers have gained an increased awareness of the scope of the informal economy.

Obstacles and problems

Insufficient financial resources

The succession of governments with different political orientations – first, a centre-left government, then a centre-right coalition, followed again by a centre-left coalition – during the course of the project have made the work of the National Committee more difficult, as it has been allocated funding in an extremely irregular fashion.

Inadequate collaboration between actors

Another difficulty highlighted by the project concerns the unwillingness of the different organisations involved to cooperate in collecting data on the informal economy and in promoting formalisation policies.

Disagreement among politicians on causes and effects of informal economy

Politicians tend to have a one-dimensional interpretation of the informal economy: they focus on a single cause, which they hold responsible for the entire problem according to their own view of the world and their personal ideology. For example, a ‘left-wing’ politician will hold labour exploitation responsible for the shadow economy and will promote policies geared towards protecting workers’ rights, while a ‘right-wing’ politician will blame tax burdens as the main cause of undeclared labour and will thus promote a more lenient fiscal policy for businesses. Both sides neglect other aspects of the problem, such as state–business relationships and the entrepreneurial skills of individuals. Moreover, politicians tend to neglect the reforms that should be made both in the market and in the public administration for fear of clashing with powerful interest groups.

Lessons learnt

It appears useful to have a national body collecting information on the characteristics of the informal economy in the different regions of the country. Such a national authority should also coordinate the various bodies at central and local levels to promote actions aimed at the formalisation of undeclared employment and assess the results of the individual measures adopted in the different contexts.

Transferability

Many countries that have an extensive informal economy could adopt such a measure.

Commentary

The effectiveness and innovativeness of the measure is that it links actions taken at local and central government levels. An analysis of the features of the informal economy must be carried out at a local level. Moreover, evaluations of measures introduced to combat undeclared work must also be completed at a local level. However, all the measures should be elaborated and drafted in an interactive way between central and local levels.

Contacts

Main organisation responsible: National Committee for the Formalisation of Non-registered Labour

Website: www.emersionelavorononregolare.it

Bibliography

Comitato per l’emersione del lavoro non regolare, Il lavoro regolare in Italia, 2000.

Comitato per l’emersione del lavoro non regolare, Secondo Forum sugli strumenti per l’emersione. Università meridionali, sviluppo locale ed emersione, Rome, 2001, available in Italian at: www.emersionelavorononregolare.it/dev/old/doc/Forum2.doc

Comitato per l’emersione del lavoro non regolare, Rapporti annuali [Annual reports], available at: www.emersionelavorononregolare.it

Liliana Bàculo and Sara Gaudino

 

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