Coping with the Global Economic Crisis: The Regional Political Economy of Emergency Social Shock Absorbers in Italy

Abstract:

This article contributes to the debate on governing the global financial crisis, focusing on the regional governance of emergency social shock absorbers in Italy. The article seeks to make two related contributions. First, it argues that subnational governments have been the main drivers of change in labour market policies. Second, it shows that state–local governance elicited a path-altering system by ‘patching up’ a hybrid administrative structure and by ‘converting’ the traditional goals of social shock absorbers from income maintenance to welfare-to-work. The article provides qualitative evidence on the changing organizational bases of the labour markets of two large Italian regions: Lombardy and Emilia-Romagna. Evidence suggests that administrative innovation and path dependence intertwined in the governance of the global economic crisis in Italy, mitigating the entrenched distortions of labour market policies.