Italian Comprehensive Third Sector Reform and its Background: A comparison between Italy and Japan

Author Name USHIRO Fusao (Faculty Fellow, RIETI)
Creation Date/NO. March 2017 17-J-018
Research Project Research on the Liberalist Reforms of the Public-Private Relationship and the Establishment of the Third Sector in Japan
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On May 25, 2016, the Italian Parliament passed a law authorizing the government to issue legislative orders necessary for the comprehensive reform of the Third Sector. This was a notable achievement brought about through the difficult process of about two years even after the government's announcement of "Guidelines on Third Sector Reform." The objective of the reform is threefold: 1) to develop a new participatory welfare state open to the Third Sector; 2) to leverage potentials for growth and employment specific to the social economy and the Third Sector; and, 3) to stabilize and diversify public and private support for the Third Sector.

The key features of the reform as indicated by the new legislation are as follows: consistent adjustment of the Civil Code, individual special laws, and tax laws through the establishment of an integrated law on the Third Sector; establishment of a collaborative relationship between local governments and the Third Sector based on the principle of subsidiarity in providing social services; realization of a full-blown takeoff of social enterprises; development of public and private support for the Third Sector including the tax system; and, ensuring the option of universal and national community service as an obligation on the part of young people for "home defense."

In Italy, while the Civil Code enacted in 1942 institutionalized associations and foundations, a number of individual special laws have been formulated to introduce various institutions such as non-governmental organizations (NGOs), voluntary organizations, not-for-profit organizations, social promotion associations, social co-operatives, and social enterprises since the late 1980s. While the number of Third Sector organizations is estimated to be as high as 300,000, the formulation of different special laws has brought confusion to Third Sector organizations in terms of their legal personalities, registration agency, and the tax system. A similar situation also holds in Japan where, based on Article 34 of the Civil Code constituted in 1896, a variety of public interest corporations were established by different special laws during the post-war period, and new legal personalities such as specified non-profit juridical persons, general incorporated associations, public interest incorporated associations, general incorporated foundations, and public interest incorporated foundations were added in recent years. Studying Italy's attempts to reform the Third Sector should offer quite a few suggestions regarding Japan's future approaches to it.