Big changes ahead?

The Bergamo Chamber of commercePM Renzi has pledged to change the statute of the Chambers of commerce in the frame of a greater plan to modernise the civil service. In early May he announced his revolution, as it was referred to in the media, and set a deadline of 40 days for consultations before proceeding. The proposed measure that affects the Chambers of commerce in particular consists in abolishing mandatory membership, so that if the reform is carried out companies will be free to decide whether or not to join the "private club" or stay out. The upshot is that the Chambers will not live off their present guaranteed revenue – in fact a taxation – from all companies, but would have to earn their day in order to stay on the market. If they can.

Life has been running smoothly for the Italian Chambers since 1993 when they were assigned a number of functions by law and a considerable annual income from all companies based in their respective district. The fee varies as a function of the type and size of the company, from smaller concerns paying 88 euros to bigger corporations stumping up a hefty 40,000 euros yearly. In a company-rich province like Bergamo, this has translated into bonanza years.

The statute of Italian Chambers of commerce may change in the frame of a greater modernisation plan of the civil serviceBut are the companies aware of how their money is managed and spent, and do they derive a benefit from its services? My perception is that plenty are not even clear what the Chamber of commerce is because apart from paying the annual fee, they remain indifferent to, or uninterested in any service it offers. Too few companies, out of the over 80,000, get involved. This premise should be enough to support the liberalisation plan. A country – or should I say a continent? – whose competitiveness is eroded every minute, cannot afford anymore to maintain unproductive organisations with the taxpayers money.

Another strong argument in favour of liberalisation is that the companies with a higher turnover, those that pay the more, are the ones that are the least likely to need the Chamber's services because they are better structured. As a consequence, be it from the small or the big companies, the present system does not meet popular favour.

We should just resort to elemental cost-benefit analysis, sometimes a forgotten criterion when it comes to designing public services. The Chambers are just too expensive to run in comparison with the benefits they produce and with the number of recipients addressed. Besides, the management, which the law has made increasingly strict and austere, is still not efficient enough. Coming from the private sector, I was surprised upon taking service and seeing how many ushers, drivers and administration staffs were employed in an organisation that seemed in part to exist for its own sake.

As they are, the Chambers in Italy are plagued by the ills of the public sector: the management obeys to the rules of politics and not efficiency; the services are not offered in a competitive perspective because whether they are provided for free, or in the best of chances sold (more or less liberally), they are always funded by the taxation.

A view from Piazza Dante toward the old town

As far as its action is concerned, there is a number of organisations, associations and entities that flock around in order to milk it of the most money they can. The case of company associations is emblematic of a dysfunctional system: they are the ones that appoint the directors on the Chamber's board, and on the other hand are among the main beneficiaries of its funds. The companies' money, which is collected in the first place by the Chamber of commerce, goes out of the door to come into the window of their associations, too often with the aim of keeping alive otherwise unsustainable projects or satellite organisations whose real usefulness also should stand trial.

The rest of the budget is typically spent for handing money out to companies in the form of subsidies for given expenses with the technical device of public calls, just to keep them at bay. But surely the redistribution of resources is not the ultimate justification for keeping the Chambers alive. I am sure companies would much happier to give up paying the fee rather than be given the opportunity to take part in the "sweepstake". As in every lottery, the jackpot is only a fraction of the money collected – in our case the lion's share is swallowed by the staggeringly high costs of the administrative apparatus.

For example, the general directors have lately come under fire because of their preposterous salaries (with one secretary general declaring an annual income of more than 600,000 euros). Likewise, the presidents are accused of concentrating powers (with a president holding over 20 offices). Finally the clerical ranks are bloated because the staff is less productive than in the private sector.

If we talk about their organs, can we say they comply with democratic principles? I have serious doubts about this point. As I said, the directors are appointed by company associations, not elected from the grassroots level. They do not lay out a political programme because their choice is only the result of a political arrangement. More tellingly, once in office, the board is not held accountable to an opposition.

I compared the websites of some German, French and Italian Chambers of commerce, and two big differences stood out clear. The first was that the organisation of these foreign chambers does not occupy a prominent position, whereas the Italian Chambers narcissistically spend several pages to present themselves, the responsibilities of their managers, their executives and so on. The impression is that Byzantine bureaucracy and a surplus of autoreferential effort overwhelms the real mission. By law, public bodies in Italy are made to divulge certain information, and that is certainly a prerequisite of high transparency standards. But exactly how much effort has to be put into carrying out these directives? Is the burden of these tasks not keeping too many staff busy with the running of the machine? We are in front of a monster (a centre of power) that once it has come to life it is hard to suppress.

The second point that I noticed was that the foreign Chambers provide and put emphasis on dynamic activities that are presented on their very homepage. The Italian Chambers, on the contrary, are now relegated to register companies, manage rosters that obey to old-fashioned protectionist logics, and enforce regulations – in a nutshell, they are the champions of red tape within in the sterile frame of old public law.

To be fair, it is not completely truthful to say that the Italian Chambers of commerce do not provide modern services. In fact they do so through the "special agencies" that they set up with a specific objective in mind, but without knowing that one day they would shoot themselves in the foot. Why? Because these special agencies, although owned and funded by public bodies, i.e. the Chambers, were originally concerns obeying to private law and were therefore in a position to provide services in a more flexible way; and also dodge the stringent public sector rules as far as procurement and hiring staff were concerned...

The fountain in Piazza DanteUp to a certain time, the special agencies were free to buy and take on personnel (some insinuate at more favourable contracts for the employees) without resorting to tenders or public calls, which left the managers and the politicians free to play their little tricks. If fact, if we investigate behind the scenes, we find that these agencies needed board directors to be chosen among local politicians in search of a career, and a general manager, who was often none other than the Chamber's very secretary general (and the task meant a second emolument). But when the legislator realised it was necessary to enforce the public sector rules for companies owned by public bodies, there was no advantage to act through them. But they have survived and the real motives lie exposed under everybody's eyes.

I said the special agencies were a bad move for another reason, because the quality services were all outsourced to them leaving the Chambers with the power to pull the strings, but only the holder of run-of-the-mill administrative tasks. Professional training, company counselling, services to start-ups and what not, are all activities carried out by the special agencies. Since they act as independent organisations, the public does not realise they are paid for by the Chambers. With hindsight it would have been better to found tomorrow's existence on these real services.

The liberalisation of the Chambers has already taken place in Spain and there is a vocal current in Germany demanding it. I believe that nowadays coercive membership is anachronistic, and the country cannot afford to provide for them if they do not become players on the free market. I hope the Government has the courage to push the reform through as it has announced.