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Interview on territorial development and on Italy with Professor Silvio Goglio

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By Mitja Stefancic

Silvio Goglio has taught Political Economy at the University of Trento, Italy, since 1976, becoming associate professor in 1985. He has also conducted research on regional development at the Department of Geography of Durham University, at the Institute of Economics of the Hungarian Academy of Science in Budapest, at the Centre d’Estudis Planificaciò in Barcelona, and at the Italian American Institute of the City University in New York. He is the coordinator of the Cooperation and local development research at the European research institute on cooperative and social enterprises (Euricse), based in Trento.

How did you start your career as a researcher in the academia in the early days?

I graduated in 1971 with a dissertation on the Cost-benefit analysis and Welfare economics. In 1972 I obtained a Masters’ degree in economic policy under the tutorship of Giorgio Fuà, who helped me realising the complexity of issues related to development and the significance of territorial variables in such development. I should recall that Giorgio Fuà was one of the most prolific Italian economists in the field of developmental economics. He believed that a respectful economist is always useful to the society and hence his successful engagement in training young scholars. Thanks to Professor Fuà I understood the importance of applying a pragmatic approach to research, using any kind of analytical instruments to get a full grasp on a given socio-economic reality and so to further promote its development.

Perhaps as a reaction to the general Italian political and academic climate of that time, I was for some time quite convinced that economic and social systems could be captured and explained through equations and with the modelling of statistical data. Furthermore, I successfully completed a Masters on statistical methods and sociometry at the City University in New York. Nevertheless, I soon realized that such approach seemed reductive to me due to the fact that it was not capable to fully capture the complexity of economic and social interactions. For this reason, I decided to focus my research interests not that much on a discipline or a method as rather on an object of study: that is, on development and the territory.

What topics did you focus on afterwards, when you became a professional researcher?

This new interest in a research topic, which I tend to define simply as territorial development, enabled me to better understand different fields of research: development theory, industrial economics, business economics, institutional analysis, local financial systems and, in particular, cooperative finance. I felt that the topic at the core of my research had to be analysed from a number of complementary points of view: in fact, an approach focusing simply on variables specific to a single discipline was potentially misleading in terms of understanding the problem politically and, even more, in terms of subsequent policies to solve the issues.

In pursuing my academic research, I found economic history particularly useful, and certainly more insightful in comparison to standard econometric models – very sophisticated yet restricted to a certain area of study and generally unable to provide a larger picture on the topic under investigation. Therefore, I embarked on a study of heterodox intellectuals, such as Joseph Schumpeter, Karl Polanyi, Albert Hirschman, Moses Abramovitz, Douglass North, Fernand Braudel – all of which could be classified as polymath intellectuals. None of them could be classified as an economist in strict terms. Let me explain this a bit further: they made an attempt to get a deeper understanding of the reality rather than designing economic instruments for their own purpose. In doing so, they became difficult to classify.

By looking at their examples, I made a break with my past, given the fact that at the beginning I was influenced by Walras and the general economic equilibrium. I realized that the object of study comes first and only subsequently come the research instruments, not the other way round (which is, in my opinion, a common way of doing economic research nowadays). Or perhaps I should say that I simply realized that focusing on economic complexity was what stimulated me the most.

You are an expert on cooperative finance and cooperative banks. What is your point of view on such banks?

It appears that cooperative banks are currently a partial “failure”, particularly considering that they should provide a model of alternative finance. Their failure can be observed both from a conceptual and from an operational point of view. I believe that this is so for two main reasons: on the one hand due to their “necessary” adaptation to the institutional and economic framework in which they operate; and, on the other hand, due to the persisting lack of creativity within the cooperative movement and, in particular, in cooperative finance (with all the subsequent shortcomings and undesired outcomes). In general, during the last few decades the cooperative movements have not showed the ability to find the right ways to make some steps forward while preserving their core values.

What is missing to most cooperative banks in Italy and elsewhere is a vision of the future with the ability to tackle the issues in an innovative way. Among cooperative bankers there is a widespread tendency to refer to old instruments, behaving as if nothing has changed so far either in economic or in social terms. As a consequence, one should question the preparedness and the skills of leading representatives in cooperative finance. Most of the time those who possess the skills required to manage things adequately and innovatively are standard bank managers rather than true representatives of the cooperative movements.

The workshop that each year we run at the Euricse Institute in Trento, Italy, is perhaps the only academic meeting on cooperative finance that managed to create and keep an international network of scholars devoted to this research topic. On the other hand, however, the workshop perhaps wasn’t successful enough in overcoming the traditional cooperative concepts and the usual cooperative models. In this sense, there is still room for improvement. Furthermore, cooperative banks (as well as the entire cooperative movement more generally) have not showed any interest in the initiative, just as usually happens when it comes to either pursuing or promoting any related research activity. This is currently a strong limitation of cooperative banks.

Finally, could I ask for your point of view on the economic situation in Italy?

Similarly as is the case with the Italian politics, the Italian economy suffers from a substantial problem: metaphorically speaking, the troopers are narrowly focused and the intermediary officers are solid, but the high officers are simply unprepared and, as such, inefficient: in many areas of Italy we are experiencing an adverse selection. There is a severe shortage of leaders who should be able to take essential yet unpopular decisions, which are in turn essential for undertaking reforms. No one is willing to design ambitious development strategies. Instead, the dominant logic is to pursue tactics to either gain new power or maintain established power relations.

The interest groups with power are in a dominant position in Italy and this prevents innovation from occurring – particularly when it comes to innovation at the institutional level. This, in turn, prevents other types of innovation from taking place. As a consequence, Italy is lagging behind, losing each day competitiveness on an international scale. The risk is that a country which is rich in human capital, culture and environmental resources will find itself in a position where others will take strategic decisions for it. I should point out that this is not a novelty in Italian history: it already happened in the past centuries.

Unfortunately, not only the state, but also private individuals and firms in Italy have only a short vision of the country’s economic development, living on tactics rather than pursuing sensible, long-term strategies. Such an attitude results in being a hindrance for basic investments in research and in human capital, and this happens at all levels. As a result, Italy is experiencing a shortage of both public and private investment plans. Metaphorically speaking, this is a world of Epimetheus, not of Prometheus. All this comes at the expense of the future generations.

From: pp.15-16 of WEA Commentaries 10(4), December 2020

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