The term “failed state” brings to mind benighted places such as Somalia and Haiti, where utter poverty joins with violence and lawlessness to create ongoing misery. Pakistan, whose government cannot provide basic service or impose its authority on territory it claims to control, offers a variation on the theme. Those countries show the failure of organized political communities, but institutional and political inadequacies make other problems worse. What about when politics fails without creating Hobbesian anarchy or grinding poverty? Can states fail within the developed world?

Italy suggests the answer is yes. Despite its many advantages, including world-class industries and an enviable standard of living, Italy has failed as an organized political community able to exercise authority by mobilizing the consent and allegiance of its citizens. The resignation of Italian prime minister Silvio Berlusconi—and his long persistence in office despite cringe-worthy antics—highlights a pattern that merits recognition. Public institutions lack credibility in a world of tax evasion and lawless enterprises, and Europe’s growing fiscal crisis has brought into the open structural weaknesses glimpsed only occasionally before. The problem lays not so much with the Italian economy as in the Italian state’s inability to get the public behind a reform program to raise productivity, cut expenditures and levy taxes effectively. In short, the government cannot govern.

Current problems mark only the latest chapter in a long story. Italy’s unification in the nineteenth century lacked the cultural and economic logic of its German counterpart. Nationalism had a force in Germany that went beyond intellectuals, and regional economies complemented each other in a realm that enjoyed sustained growth. By contrast, Italy never overcame localism. Nationalism beguiled writers and artists without getting broad public support. Rather than creating an Italian state, unification expanded the Kingdom of Piedmont-Sardinia in Italy’s north at the expense of the Catholic Church and other local rulers. Foreign backing played a role. Most of the population remained onlookers.

So it remained through the early decades of the Kingdom of Italy when patron-client relations underlaid a façade of parliamentary liberalism. Governments bought consent through patronage, while landlords in central and southern Italy traded the votes of their impoverished tenants for advancement. Authorities never brought mafia or similar groups under control, and local elites often used them to consolidate their power. The rule of law never took hold. Along with disparities in wealth—and deep structural poverty south of Rome—that gap prevented the growth of a national middle class that might have brought forth effective leadership. Italian politics tended toward deadlock, especially from the 1890s through 1920s. Intellectuals Vilfredo Pareto and Gaetano Mosca drew on Italy’s experience to argue that elite minorities always rule majorities. They offered a profound critique of parliamentary democracy as a façade for struggles among private interests to the detriment of the public good.

Benito Mussolini stepped into this climate of political failure. Beyond the violence, fascism marked an effort to leap beyond structural problems instead of solving them, which further weakened public engagement. The catastrophe of World War II ended for Italy with a civil war that raised fears of a communist takeover. The Italian Republic avoided that fate, but Christian Democrats and Socialists alike preserved the worst habits of the past. Rampant corruption and bribery was the price of excluding communists—and post-fascists—in a system largely kept together by external imperatives from the Cold War. There was economic growth, and living standards rose. But this shrouded underlying political difficulties later manifest in left-wing terrorism and an abortive military coup in 1970 that involved mafia and fascists. Behind the post-1945 prosperity, structural problems of governance remained.

This underlying rot was exposed beginning in 1990 with the mani pulite, or “clean hands,” investigations of bribery that implicated hundreds of elected politicians and appointees. Elections swept away the four political parties that had dominated the Italian Republic. Revelations about Soviet bribery soon tainted communists who had seemed outside the system of institutionalized corruption. Much of the Center Left, and some of the Center Right, embraced a technocratic approach to European unification as an alternative to an Italian politics resistant to reform. Umberto Bossi’s Northern League, a separatist party attacking wealth transfers to Italy’s south, won regional support, and Gianfranco Fini recast the post-fascist Italian Social Movement into the National Alliance as an Italian variant of Gaullism, with strong popular support in the Lazio region around Rome. Neither would have gained traction without the complete implosion of Italian politics.

Berlusconi seized the moment by understanding public sentiment and its revulsion with the status quo. He had made a fortune building housing in suburban Milan for newly prosperous buyers, then parlayed that wealth into a new life as a business media tycoon. The experience taught him what Italians wanted and what they would tolerate. Berlusconi cast himself as an outsider, a businessman who would cut bureaucracy, end bribery and clean up the mess Italian politics had become. He stood apart from the technocrats who might have provided an alternative reform agenda. Observers rightly thought Berlusconi vulgar and rolled their eyes at taking a soccer-team slogan to name a political party, but he struck a chord with an alienated public. He drew Bossi and Fini together into a coalition that included other groups on the political Right and drew support from the church. Berlusconi became the longest-serving Italian leader in generations.

The comic opera aspect of Berlusconi that so exasperates critics invites comparisons with Mussolini, but the real similarity is that both men promoted a kind of “anti-politics.” What Mussolini did with violence, Berlusconi accomplished through showmanship. But holding office mattered more than actually governing, and he never took steps to end corruption and connect civil society with the Italian Republic. Lawlessness and the black economy persisted under a leader as personally corrupt as his predecessors. Deeper structures in Italy took over with populists like Bossi pushing secession and more respectable politicians looking to the European Union as an answer to failed governance. Joining the euro may have allowed Italy to borrow at lower rates than under the lira, but it also denied Rome the deflationary options to raise earnings though exports and tourism. Sovereign debt crises elsewhere in the eurozone imposed pressures Italy lacked the capacity to withstand. The upshot hastened Berlusconi’s recent departure.

Italy’s problems go beyond a single man or the immediate financial crisis. Its government cannot effectively govern and hence cannot respond to worsening civic problems. Italy remains hardwired for society and the economy to work outside the state’s authority. That dynamic undermines both the rule of law and possibility of mobilizing public consensus behind policies to address mounting challenges. Change imposed from above by political elites—or from the outside by German or European officials—is fiercely resisted. The old game thus continues amidst financial meltdown and social problems that fuel simmering discontent and popular alienation. Crises may come and go, often turning out to be much less than they seemed at the time, but the Italian state never seems capable of handing them. The tragic flaw of Italian history raises the question of what can be done to replace a failed-state government structure with one that works.

William Anthony Hay is a historian at Mississippi State University and a senior fellow with the Foreign Policy Research Institute.