Italy's Housecleaning

THE forces of reform and geopolitical change that have affected the United States, Canada, Japan, and other industrial nations are swirling with a vengeance around Italy.

The nation is embroiled in a political-corruption scandal that has undercut its economy and further eroded public confidence in its political institutions. The probes have led to the arrest of several industrialists, the resignations of some top politicians, and the prospect of more to come.

The crimes magistrates are uncovering have the potential to encourage much-needed political and economic reforms. Of immediate concern, however, are the instability and uncertainty that the scandal could generate and their impact on the Italian people.

At issue is a system of alleged bribes and payoffs to political parties and leaders from many of the nation's top industries. Analysts trace the current system to postwar fears, especially in the 1970s, that voters would back the Communist Party. To offset the money that the Communists were receiving from Moscow, other parties began developing "creative" ways to augment the few lire they received from Rome.

Aside from building corruption into the process, the systematic payoffs also hurt Italy's economy: One estimate puts the cost of the alleged bribes at $4.1 billion a year over 10 years, accounting for as much as 15 percent of the nation's debt. Some industries, such as construction, are said to be slowing their activities as they come under scrutiny, adding to already high unemployment.

Magistrates have expressed concern about the strain the probes could put on the legal and political systems: Some estimate that the investigations may collar up to 60,000 people; and more than 50 members of Parliament are said to be under scrutiny.

This is a defining moment for Italy. Until now, the public has tolerated some corruption. But the scope of the investigations has stunned the public, fueling calls for faster privatization of state-run businesses, for constitutional reform that could lead to greater federalism, and for electoral reform. All of these have merit. The challenge will be to channel the public's desire for justice in ways that support genuine, orderly reform.