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May 15, 2009

Social spending and inequality

Here some interesting trends in the Organization for Economic Cooperation and Development’s latest “Society at a Glance Report.”
Check this very interesting chart:

Here’s how to read this chart. The horizontal axis shows public social spending as a percent of net national income. The vertical axis shows the Gini coefficient, which is a measure of income inequality. A low Gini coefficient means a country has more equal income distribution, while a high Gini coefficient shows more unequal distribution.
The interesting part about Italy is the amount of social spending and the results in terms of social improvement this spending brings to the people.
We are the only major industrial country with a very high social and income inequality.
Despite spending almost 30% of our national net income the results are discomforting. The only developed country faring worst is United States which is spending only 18%, almost half of Italy spending and with slightly worst results. Everyone else regardless of the spending is faring astronomically better than Italy.
This is telling us something about how the spending is done in Italy. Spending is not finalized to real social improvement but it becomes capital flushed in the public sector with little or none oversight which is routinely looted by corrupt officials and politicians and distributed to their cronies, affiliates and families. This capital which should be targeting the reduction of inequalities is becoming in first instance the source and engine of the growing inequality gap.
It would be nice at least once to see the Italian media reporting these news in order to start a debate on what kind of society is Italy devolving into.
Unfortunately there is little hope of this in a country whose media are muzzled and tamed by the Prime Minister and the people is either band-wagoning on the looting parade or silently living in denial and apathy.

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