The issue of the economic underdevelopment of Southern Italy needs special attention in the context of European economic governance. This is because it impacts Italian financial stability, worrying Italy's EU partners. Italy’s indebtedness and low growth are one of the main factors preventing the euro area from proceeding to tighter economic and political integration.

In this working paper, we aim to identify the characteristics of the economic underdevelopment of the Southern regions in the context of the literature on the "left-behind" regions of the European Union. Throughout this paper, we will highlight the economic policy implications and the more explicitly political-institutional ones. We identify local administrators and their political sponsors as critical actors that prevent state and European funds from being efficiently used, causing a syndrome of dependency in the population and in the economic actors. The National Plan for Resilience and Recovery proposes a new institutional structure and a more effective channeling of funds.

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