Among the numerous and complex problems of the new State emerged the need to
bring uniformity to a territory that was so politically and economically
diverse. The indiscriminate application of the administrative, judicial and
fiscal structures of the old Piedmont was to create a further divide between
Italy's more economically developed Northern and Central regions and the
structurally weaker Southern region (the Mezzogiorno). A mass emigration of
peasants and the poorest classes to the two Americas occurred (in the decades
spanning the 19-20C the number reached several million) and the so-called
southern question took root.
At the same time, in order to compete with the other European powers, Italy followed a policy of colonial expansion in Africa. She occupied Eritrea (1885-96), Somalia (1889-1905), Libya and the islands of the Aegean (1911-12). A commercial concession (500 sq miles) centred on Tien-Tsin was obtained from China in 1902.
In the economic and social areas the period from the taking of Rome to Italy entering the First World War (1870-1915) was characterized by general growth in the whole country. This was undoubtedly favoured by an interlude in international politics that allowed Italy to put her financial affairs in order and re-organize her administrative structure. There then followed the development of certain essential sectors, such as the rail network and basic industries, often making use of foreign capital. At the same time, attempts were made to strengthen international political relations (by joining in the Triple Alliance with the Germany of Bismark and the Austria of Franz Joseph) and commercial links, even if it was eventually necessary to resort to protectionism in order to protect the still fragile national economy.
While agriculture encountered notable difficulties due to the fall in prices on foreign markets and the backward conditions of a large part of the countryside, as well as the scourge of malaria, industry was a growth area. The textile industry, with its two main sectors of silk and cotton, as well as the metallurgical and mechanical industries were favoured by increasing supplies of electrical energy from the newly built water-powered plants in the upper Alpine and Apennine valleys.
The country's social conditions were marked by a strong contrast between rural and urban environments. The south saw frequent protests by the peasants over the burden of taxation (such as the notorious milling tax), while the industrial proletariat gradually organized itself into political associations and trade unions. From the latter there arose in 1892 the foundation of the Partito Socialista, partly drawn from anarchic and equalitarian movements, and then in 1896 the Democrazia Cristiana party was established, inspired by the principles in the `Rerum novarum' of Leo XIII published in 1891. The participation of the outstanding representatives of these movements to parliamentary activities greatly enlivened political debate, which had been limited in the first decades of national unity to the differences between the deputies of the old right monarchists and liberals and the left republicans and reformists.
The direct participation of the masses in national political life occurred in
1913 with the introduction of universal suffrage, although women were still
excluded. Consequently, on the eve of the First World War (1914-18) Italy
appeared on the international scene as a country that was more socially uniform,
freer in its choices (which then swayed, often with passionate dispute, between
interventionism and pacifism) and altogether more modern in its organization
than immediately after its unification.
The cooling of relations with Austria and the renewal of Irredentist designs on the Trentino and Venezia Giulia lead to a reversal of Italy's traditional European alliances and she fought on the side of the Allies, together with France and England. The outcome of the war, which also saw the presence of the United States of America, despite the grave crisis of Caporetto (November 1917), was in Italy's favour. At the Conference of Versailles (1919) Italy received the Trentino, Alto Adige, Venezia Giulia and the Dodecanese, while being refused Fiume and Dalmatia. A reaction to this followed with the occupation of Fiume (1919-20) by the legionaries of Gabriele D'Annunzio.
In the context of the grave political crisis following the war, from which Italy had emerged victorious but economically ruined due to her efforts, the country underwent a series of political and social agitations that the weak government of the period was unable to control. One remnant of the war was however resolved with the Treaty of Rapallo (1920) by which Dalmatia, with the exception of Zadar, went to the new State of Yugoslavia, formed from the break-up of the Austro-Hungarian Empire, and Italy's possession of Istria was confirmed. Fiume was also declared a free town but was annexed by Italy only three years later with a specific agreement between Italy and Yugoslavia.
In this period were founded a number of political parties; Partito Popolare (1919), by Luigi Sturzo, as a continuation of the Democrazia Cristiana; Partito Comunista d'Italia (1921, at Leghorn), from a split with the Partito Socialista and led by Antonio Gramsci; and, finally, the Fasci di Combattimento of Benito Mussolini, previously a socialist leader and an ardent interventionist. This latter movement, after having obtained 35 deputies in the 1921 election, transformed itself into the Partito Nazionale Fascista equipped with a revolutionary programme that, after the episode of the March on Rome of 28 October 1922, brought Mussolini to the head of a government.