Justice behind bars. What Napolitano is really saying about Italian economics

Italian President, Giorgio Napolitano, delivered yesterday a message to the Parliament in order to address the "emergency" conditions of the country's jail system. This is what you will read on mainstream newspapers and websites. This is a half-truth. Sure, "the reality of degradation and human suffering" behind bars has been at the top of Napolitano's agenda for many years. This time, the President also referred to the official call on his country - by the European Court of Human Rights - to resolve the structural problem of overcrowding in prisons, which is "incompatible with the Convention" (see Torreggiani and Others vs. Italy). Having said this, the solemn message to the Parliament also touched on the "structural" problems of the Italian judicial system, something that both Italian and foreign investors really care about.
Pardon and amnesty would only be temporary solutions, the President said, if not "accompanied by real structural reforms in order to avoid the overcrowding to happen again". There is a "robust connection", Napolitano argued, between the situation of Italian jails and the need for a "renewal in the adminstration of justice". "The most evident connection - he said - is between the unreasonable length of judicial processes and the overcrowding of jails".

The Italian grim economic situation is strictly related to the judiciary monstrum affecting the system. For example the International Monetary Fund (IMF), in its last Article IV Consultation dedicated to Italy and published last September, quoted justice-related issues even more than labor-market reform! The IMF also put justice among six "selected issues" to be addressed. Here below, some quotes and graphs:

"A more efficient judicial system could also have significant cross-cutting benefits in improving productivity. The lengthy judicial process is a major contributing factor behind Italy's low ranking in global competitiveness. It takes on average more than 1,200 days to enforce a contract (more than twice the OECD average), with repeated appeals creating a huge backlog of cases (9.7 million as of 2012)". (source)

"The lengthy and inefficient justice system has also been linked to the high cost of doing business, low inward FDI, as well as the small size of firms and capital markets (see table for Italy's continued poor ranking in the ease of doing business). These impediments have contributed to a difficult business environment that has kept productivity low and held back needed adjustment after the crisis". (source)

"The inefficient Italian judicial system has contributed to a difficult business environment and lower investment. Improving the efficiency of the judicial system will require strengthening the mediation system, enhancing court management and accountability, and reforming the appeal system". (source)

Don't believe President Napolitano took this unprecedented step to address Parliament - it happened only 11 times in contemporary Italian history - to be just a humanitarian guru. It's (also) the economy, stupid.