Bureaucracy and tax rates make Italy the G7’s least competitive country by far: WEF

Italy has risen one place in the World Economic Forum's annual Global Competitiveness Index, published on Tuesday, but continues to be held back by government bureaucracy and cumbersome tax regulations.

Bureaucracy and tax rates make Italy the G7's least competitive country by far: WEF
File photo of an office: Pixabay/Pexels

At 43rd place out of 137 countries, Italy was ranked as one of the least competitive countries in Western Europe and by far the lowest-scoring in the G7.

Four of the G7 countries were in the top ten in the index (the United States were ranked 2nd, Germany 5th, the United Kingdom 8th, and Japan 9th) while Canada was ranked 14th and France 22nd – a full 21 places above Italy.

The main factors which made it tough to do business in Italy were listed as inefficient government bureaucracy, tax rates, restrictive labour regulations, and tax regulations.

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“Despite recent reforms, labor markets (116th) and financial markets (126th) remain weak points,” noted the WEF in the report.

Italy was ranked 127th out of the countries included – meaning only ten countries had a lower score – in the categories of 'hiring and firing practices' and 'effect of taxation on incentives to work'. It was also in the bottom third of countries in the study in terms of capacity to retain and attract talent.

Business figures have long warned of the effect of a 'brain drain' on Italy as increasing numbers of skilled graduates move abroad for improved career prospects, while the country seems to do little to attract foreign talent.

A recent survey by networking company Internations showed that most immigrants to Italy move for love or 'just for Italy', and that most of them were dissatisfied with the career prospects available to them in Italy.

However, it wasn't all bad news for the bel paese, with Italy scoring much better in terms of capacity for innovation, for which it was ranked 32nd worldwide, as well as in business sophistication (25th), and infrastructure (27th). Its 'technological readiness' was ranked 41st worldwide, based on factors such as the availability of the latest technologies, fixed-broadband and mobile broadband subscriptions.

These scores could be crucial to Italy's economic recovery, since in the future, global competitiveness will be “more and more defined by the innovative capacity of a country” due to the impending Fourth Industrial Revolution, the WEF argued in its presentation of the report.

Italy also scored highly (25th worldwide) for health and primary education, and was ranked third for life expectancy, its highest score in any of the categories measured.

Its biggest improvement in the past year was in the 'goods market efficiency' category, in which it leapt seven places to rank 60th, despite low scores in the effect of taxes on incentives to invest (135th) and prevalence of foreign ownership (111th).


The Global Competitiveness Index is an annual assessment of the driving factors behind the productivity and prosperity of countries.

It uses statistical data from the International Monetary Fund (IMF), the World Health Organization (WHO) and the UN Educational, Scientific and Cultural Organization, as well as information from the WEF's annual Executive Opinion Survey.

The highest ranking economy in the 2017 edition is Switzerland, followed by the US then Singapore.