Abstract

For some years, in Italy as well as in several other European countries, we have been observing an expansion of the welfare system frontiers towards a set of services of a new kind which are usually called "social quality services". Using some instruments that are provided by economic theory, the paper suggests an analytical framework for reasoning on the shape that government intervention in the market should take on in order to support adequate production and consumption of these services. Firstly, the paper analyses the impediments to the development of these kinds of services which can be traced back to an inadequacy of the present allocative mechanisms in managing the intersectoral transfers of resources that are required by the so called "cost disease". Secondly, in the light of this analysis, the paper proposes a general reference model - whose pieces are derived from several ongoing experiments in Italy - that may be useful for implementing government interventions that do not focus upon public production but upon the strengthening of markets through a system of appropriate incentives and regulations.