Systemic Failure of a Nation

Cry the beloved country: from South African author Alan Paton , about South Africa.

This post is actually not about South Africa but rather contemporary Italy.

Current numbers:

  • Public debt 2,2 trillion ; interest cost 81 billion
  • Tax evasion 160 billion Euro
  • 36 quarters of continuous negative GDP
  • 360 Billion Euro bad debts: In certain cases nearly six times the EU average.  Italian banking controlling authorities, bankers and political parties in collusion resulted in dubious loans.
  • Corruption 60 billion Euro
  • Debt 130% of GDP, Euro
  • Average tax rate 44%
  • Government inefficiencies: un-measurable: Average cost per km for free-way development 4 times versus average in France. Syringe cost can vary up to 6 times the average in different regions. iPAD contract in  Rome area Euro 1800, cost at supermarket Euro 600.
  • Number of people in politics 142 000
  • Levels of government 5. EU parliament, Central Government, Regional, Provincial and Municipal
  • Salary of police head Euro 500 000, double FBI equivalent.
  • Super pensions for government and trade union members
  • Stenographer salary at Senate Euro 250 000, more than President Obama
  • 72 000 ministerial cars with drivers available for politicians
  • Jobless 18-30 year old range 38,5% , overall 12,2 %
  • Criminal Organization: Mafia, Ndrangheta, Camorra : estimated turnover 90 billion Euro tax free
  • Excessive collusion of the Vatican bank with money laundering
  • Untouchables, government employees cannot be fired even for serious cases of theft, laziness, inefficiency
  • 3 years automatic discount for prison term thanks to Catholic Church
  • No jail time for corruption of judge, if over age of 70 years, can commit crime but no jail time.
  • Not one Italian university in top 100
  • Excessive statue of limitation with respect to court cases
  • 30% Rome police force home sick on a Monday morning
  • Sicily has more bush firefighter than the whole of Canada
  • In Sicily Euro 20 000 per month pension for politicians is the norm.
  • Government employee have on average 17 days paid days plus normal holiday. Workers in justice system have 45 paid holidays plus entitlement to additional 17 days. This implies that justice system worker only works 9 months.
  • Newly built bridges collapse: there is no requirement for qualified engineers to verify correctness and quality of construction projects.
  • Italians tax debt towards tax authorities 817 billion ; 35% of its total public debt

Italy is currently ninth economic power but soon will be quickly overtaken due to continuous decline. The numbers above speak volume of a country in serious decline.

Why is this relevant for System Transformation ?

It actually proves the correctness Panarchy conceptual framework.


As country Italy has a low potential level (ability to grow and provide jobs). This is caused mainly due to serious restriction caused by poor government efficacy, high level of economic delinquency such as corruption, low internal private expenditure due to high taxes (high tax evasion) , limited investments. Favorable economic policies from the EU  have provided limited leverage. Failure by government to exploit tourism is a classic example serious deficiencies considering 53 million tourist per year. All of Italian museums earn less that the Louvre in Paris.


This determines the degree to which a system can control its own destiny through internal controls. One of the key aspect with respect to governance is the poor justice system. This is one area where state has failed dismally to ensure that crime does not pay. High level of corruption seriously undermines government projects, impacts private industry (Parmalat , Cirio to name a couple) . Government employers are not responsible for anything including damages to tax payers. There are no effective audits on the efficient running of government departments such as the justice system. The health system for years is an area for theft and bad management specifically in southern Italy. Conflict of interest and lack of transparency remain a key problem within the country governance. Tax evasion is condoned, no real effort to reduce drastically tax evasion.


Resilience determines how vulnerable a system is to unexpected disturbances and surprises.

The banking crisis and competitiveness of emerging markets seriously impacted Italian companies to export mainly inability to change (adapt)  due to low productivity influenced by government poor efficacy and lack of investments. These disturbances has pushed the system into a different state from which country has difficulty to recover. Once resilience is overwhelmed the economic system enters a new state, restoration can be complex, expensive, and sometimes even impossible.

Finally due to political weaknesses, Italian government has limited influence with respect to EU governance allowing power to gravitate towards German interests.




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IT Transformation consultant specifically within SAP space with strong interest in System Thinking and Cybernetics Management.

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