Istituto Per La Ricostruzione Industriale - "The IRI Formula"

"The IRI Formula"

In the 60s, while the Italian economy grew at high rates, the IRI was one of the protagonists of the "Italian economic miracle." Other European countries, particularly the British Labour government, looked to "IRI formula" as a positive example of state intervention in the economy, better than the simple "nationalization" because it allowed for cooperation between public capital and private capital. In many companies, the capital of the group was mixed, partly public and partly private. Many companies in the IRI group remained publicly traded and bonds issued by the Institute to fund their companies were subscribed by investors en masse.

Leading members of the DC IRI settled as Giuseppe Petrilli, president of the Institute for nearly twenty years (from 1960 to 1979). Petrilli in his writings developed a theory that emphasized the positive effects of "IRI formula". Through IRI companies were used for social purposes and the state had to bear the costs and inefficiencies generated by investments, meant that IRI did not have to follow a commercial manner in its activities, but invest according to those who had the interests of community even when it would have generated "improper charges", in uneconomic investments.

Critical of the practice welfarism, then in line with the lines of the model Beneduciano was the second President of the Italian Republic, while the Liberal Luigi Einaudi, who said: "The public company, if not informed on economic criteria, tends to hospice type of charity." Since the objectives of the state were to develop the southern economy and maintain full employment, the IRI had to concentrate its investments in the South and develop jobs in their companies. Petrilli's position reflected those already common in some currents of DC, who sought a "third way" between liberalism and communism, the mixed system of state-owned enterprises IRI seemed to realize this hybrid of two systems at the antipodes.