This article debates on the theoretical conceptualization of public shareholding companies in Italian law and economics. Starting from the public-private divide in legal science, the author reconstructs the opposite views on state-owned enterprises and main developments in regulation of public companies in Italian economic history with the administrative-law perspective.That is to say, he takes as main focus the theories of public interest, the relationship between public ownership and holding company, the different schemes of public companies and privately-owned ones.
The legal analysis is developed by examining two sets provisions arising from, respectively, the Italian Constitution and EU Treaties.
Article 41 of the Italian Constitution recognizes economic freedom and guar- antees the right to private initiative, but also equalize private and public enterprises. However, the history of public companies in Italy is described by following two parallel lines drawn by different implementation schemes at the national and local level. Having identified the constitutional basis of public ownership of companies in Italy, the author argues that what is peculiar in Italian history is not the legal recognition of public companies, but the extent to which State intervention has developed since the mid- seventies and led to an increasing number of public corporations in several economic-strategic sectors. Most of these companies were eventually privatized as a result of market liberalization processes, while new public entities have been established in the form of State-owned companies to perform administrative functions.
On the other side, there is a distinctive pattern in public shareholding of companies by local authorities.This is a relatively new trend in Italian economic history, which traditionally involves public utilities (i.e. water and waste management, transports, etc.) but in more recent years has developed also in typical enterprise activities, including innovation-intensive sectors such as IT services and building management.
Such an extensive use of public companies has given rise to financial, managerial and competition issues which, in turn, have required new legislation addressing the limits for local authorities to establish or maintain public ownership and participation of companies.
The public provision of services by local authorities is however not in contrast with the EU law, as long as public ownership of companies does not affect market competition.As the EU law sets out specific requirements for in-house providing and public-private partnerships, the author therefore presents a classification of the various forms of public companies in Italy, with the aim to verify if they meet the EU competition rules and match with the nature of Civil-law enterprises. By examining the most relevant developments in recent case law, the author emphasize that Administrative judges in Italy have played a significant role in bringing most of public companies under the umbrella of Public-law rules, and thus suggesting that the pursue of a public interest may justify their public nature and require a special regime. If this is true for state-owned companies which perform administrative functions, and for in house providing, public-private partnership is by contrast designed as an “institution- alized” and temporary outsourcing. Such a development contradicts with the original scope of public-private holding in that it does not fall anymore within the concept of “indirect administration”. Although there is a clear distinction between in house providing and public shareholding of private companies, which lies in how the public interest is pursued, the author argues against the definition of such companies as public- law entities.The increasing “hybridization” of rules governing public companies, indeed, not only reveals mistrust in a genuine entrepreneurial management of public companies, but may also give undue incentives to hypertrophic use of state intervention in the economy.