Over the past 30 years, laws in Italy have become longer, more convoluted, and frequently unintelligible even to seasoned legal professionals. This column exploits variation in the ability of lower courts to interpret poorly drafted laws in alignment with Italy’s Supreme Court of Cassation to assess how legal uncertainty affects the local economy. The authors find that uncertainty discourages investment, hinders innovation, and stifles entrepreneurship, and that improving legislative quality to the level of the Constitution would raise today’s Italian GDP by almost 5%.
The rule of law – an essential pillar of any well-functioning modern economy – rests on a body of legislation that is “clear, easy to understand and unambiguous; simple and concise, avoiding unnecessary elements” (European Commission 2016). In practice, new legislation may be poorly calibrated and is often enacted hastily in response to immediate crises, prioritising political compromise and urgency over careful design. As a result, laws may accumulate chaotically over time, gradually creating legal systems that lose coherence, and at times become even Kafkaesque. This is an apt description of Italy. In Gratton et al. (2021), we documented that the quality of Italian legislation has deteriorated dramatically since the advent of the so-called Second Republic, resulting in unprecedented normative chaos. Increasingly issued through emergency decrees, Italian laws have become longer, more convoluted, and often packed with unrelated provisions, making them obscure and frequently unintelligible, even for seasoned legal professionals. Today, 85% of sentences in Italian legal texts exceed 25 words – the threshold identified by linguists as the point beyond which clarity suffers (Cortellazzo and Pellegrino 2003). On average, every 100 words in a law contain more than four cross-references to other legislative texts, creating a labyrinth of interlinked norms that renders interpretation extremely difficult.
But how much do these unintelligible laws actually cost the Italian economy? In new research (Giommoni et al. 2025), we estimate that if all Italian laws were written with the same clarity as the Constitution’s foundational principles, Italy’s current GDP would be nearly 5% higher, equivalent to a cost of almost €110 billion per year.
We arrive at this estimate starting from a simple insight: unclear laws create uncertainty about rights and obligations. This discourages investment, hinders innovation, and stifles entrepreneurship, ultimately reducing a country’s productive potential. Building on this premise, we first measure legislative quality, then assess how it affects legal uncertainty, and finally examine how that uncertainty impacts aggregate output. Combining these three steps, we estimate the overall impact of legislative quality on GDP.
We measure legislative quality using established linguistic criteria drawn from leading legal writing manuals (e.g. Cassese 1994, Butt and Castle 2006, Thornton 1979). For each of the more than 75,000 laws in the Italian legal corpus, we constructed several indicators: average word and sentence length, the frequency of gerunds, modal verbs, demonstrative adjectives, and other stylistic elements. To gauge legal dependency, we also calculated the frequency of direct references to other laws. Finally, we combined all these indicators using principal component analysis to obtain a single synthetic measure of writing quality for each Italian law. Panel (a) of Figure 1 displays, as a solid red line, the time series of our synthetic measure of drafting quality for all new laws issued by the Italian Parliament (expressed as the logarithm of the number of gerunds per word). The horizontal black dotted line represents the drafting quality of the fundamental principles of the Italian Constitution, adopted in 1947, which roughly corresponds to the top quartile of the cross-sectional distribution of drafting quality across all Italian laws. Panel (b) plots the logarithm of the total number of new words in all laws enacted by Parliament each year in Italy. The solid red line shows the actual series; the black dotted line shows its fitted linear trend. All variables are in logs. The data reveal a highly significant deterioration in legislative drafting quality, which worsened sharply in the early 1990s. This decline occurred alongside a steady increase in the volume of legislation, as evidenced by a clear linear trend in the log of word counts.
Figure 1 Quality and quantity of legislation in Italy over time
We assess the effect of drafting quality on legal uncertainty by analysing the probability of disagreement between Italy’s Supreme Court of Cassation and lower courts. The Supreme Court of Cassation decides whether to uphold or reverse the rulings of first- and second-instance courts. In line with its institutional mandate – ensuring the consistent and uniform interpretation of the law across the country over time – the Court focuses solely on points of law. It does not accept new evidence and explicitly cites the legal provisions underpinning each decision. This allows us to estimate how poor legislative drafting increases the likelihood of a reversal – a proxy for interpretative uncertainty. On average, the reversal probability stands at about 30%. But when cases involve poorly written laws (in the bottom 10% by drafting quality according to our synthetic measure), the probability rises to 36%. Conversely, it falls to 24% when cases involve the clearest laws.
Figure 2 shows that the ability of lower courts to interpret poorly drafted laws in alignment with the Court of Cassation varies widely across jurisdictions, with darker areas indicating a higher probability of disagreement on the interpretation of such laws. This variation cuts across both northern and southern Italy. The courts most aligned with the Court of Cassation are Tortona and Rovigo, while the least aligned are Biella and L’Aquila. In practice, this divergence exposes firms to varying levels of legal uncertainty depending on their jurisdiction. In September 2012, a major judicial reform redrew Italy’s judicial geography. Many smaller courts were shut down, affecting 1,235 municipalities out of a total of 8,093. As a result, many firms came under new jurisdictions, with direct and unexpected consequences for the legal uncertainty they faced. This shock allowed us to assess how legal uncertainty – whether greater or lesser – affects the local economy.
Figure 2 Cross-court variation in the impact of poor drafting on the likelihood of disagreement with the Supreme Court of Cassation
We find that a one standard deviation increase in legal uncertainty reduced firms’ annual output growth rates by 1.2 percentage points, and investment by 1.3%. We also find that new firms enter the market at a smaller scale, and incumbent ones face a higher risk of failure. From these estimates, we derive our estimate of the long-run impact of legislative quality on Italy’s per capita GDP, which depends on the growth rate of incumbent firms, business entry and exit rates, and the size of new firms. The result: improving legislative quality to the level of the Constitution would raise today’s Italian GDP by almost 5%. Strikingly, nearly two-thirds of this cost has accumulated over the past 30 years, as legislative drafting quality has progressively deteriorated. Perhaps the time has come to revisit the handbook by Cassese (1993) on drafting administrative acts, revised by the National Research Council’s ITTIG and the Accademia della Crusca. Italy needs a thorough, systematic reform of its corpus of legislation.
Source : VOXeu
