A major challenge is the need to improve competition in sheltered sectors of the economy, where inflation pressures raise costs with a knock-on effect in traded sectors, weakening international competitiveness. Italian small businesses fail to grow as in other countries, due to the influence of unfriendly rules and institutions. Italy's failure to attract foreign investment is due to many factors, but more competition will open more opportunities for investors. In conclusion, the OECD recommends, Italy should launch a broad attack on the numerous anti-competitive regulatory constraints on price, entry, and quality. Over-use of licensing, permits, and concessions is a particular Italian problem.
Competition is weak in local services and in the liberal professions.
Recent anti-competitive actions, such as a March 2001 law setting a ceiling on discounts in book selling, indicate a continuing vulnerability to producer lobbies that cost consumers dearly. Controls on regulatory quality in the public sector, at national, regional, and local levels, should be tightened. The Antitrust Authority, independent and with strong leadership, has promoted competition principles throughout government policies. The report on Italy is the latest in a series of such reviews of OECD economies. Others have covered the U.S, Japan, Mexico, the Netherlands, South Korea, Spain, Hungary and Denmark .