Overturning Italy’s Article 18: Exogenous and endogenous pressures, and role of the state

Abstract

Since 1970 Article 18 provided important employment protection for workers in larger firms in Italy. Its core aspect (i.e. reinstatement in the case of unfair dismissal) was recently overturned by the Jobs Act for employees hired after its approval. To explain Article 18’s abolition, the authors assess the explicative power of (1) stronger exogenous pressures from economic international institutions, and (2) weaker endogenous pressures from unions and business organizations. Documentary analyses and semi-structured interviews with key informants reveal that while these two forces are critical, they tend to ‘read off’ the state policy decision making role, which, the authors argue, is central to explaining the overturning of Article 18.

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