NEWS ANALYSIS : Scandal, Splintered System Cast Italy Adrift : Politics: President’s resignation leaves country leaderless. Efforts to form coalition are hindered by a divided Parliament.

A political adage argues that Italy has gone from rags to riches in the decades since World War II, not because of its 50 governments but in spite of them.

Even by such elastic standards for public administration, things have now gone too far. Italy--a democratic country of 57 million with the world’s fifth-largest economy and some of the highest living standards on Earth--is drifting without a president, a prime minister or a government. And none is in sight.

The search for renewal is complicated by a massive payoff scandal in Milan that has shaken the country’s moral capital and undermined the already weakened credibility of Italian political parties.

In Milan, it is the mainline Socialist Party that is bleeding from accusations of enormous payoffs by building contractors to city officials.

But Italy’s political malaise goes beyond institutionalized bribery and corruption: A political system that creates fragmentation is unable to respond constructively to a grass-roots demand for change.

The parallel danger is that while the politicians fiddle, Italy will burn up its chances of converging with its partners as a first-team player in the new Europe.

Voters fed up with a weak and venal government sent a clear message to Rome in national elections last month, which punished Establishment parties but also gave seats in Parliament to representatives of 16 different parties from the neo-fascist right to the unabashed Marxist left.

Maneuvering began to forge a coalition to succeed Prime Minister Giulio Andreotti but was suddenly short-circuited.

Under the constitution, President Francesco Cossiga should have named a prime minister and asked him to form a government; in the normal course of events, that would probably have been a member of Andreotti’s Christian Democrats, who finished first in the election even though their vote slumped to a 46-year low.

Instead, Cossiga himself resigned two months before his term was to expire in what he called an attempt to “shock” the whole political system into reform.

The resignation overturned political priorities.

In its aftermath, a government can be formed only after a new president has been elected by the members of the new Parliament and Senate, plus 58 representatives of Italy’s regional governments--1,014 voters in all, and split six ways from Sunday.

It will be up to Cossiga’s successor to pick a new prime minister and for him to undertake the long negotiations to construct a coalition government.

The presidential vote begins Wednesday. How long it will take, and how many ballots, to engineer 571 votes for any candidate in so splintered a political universe is anybody’s guess.

For now, Andreotti and his four-party Cabinet remain in office to conduct routine business. And Giovanni Spadolini, the president of the new Senate and a leader of the small Republican Party, is the acting president of Italy.

A genial and Falstaffian figure, Spadolini is bound to be one of the presidential candidates. Others include seven-term Prime Minister Andreotti and Bettino Craxi, his Socialist foil.

Craxi was a serious contender for either president or prime minister, but the scandal in Milan has already entangled so many Socialist Party colleagues, including his brother-in-law, that he appears in eclipse.

It may be months before Italy has a new government. There is every chance it will be as weak as its predecessors, and its mandate might not extend much further than scheduling new elections.

In the meantime, there seems no chance of electoral reform that could ensure a Parliament cohesive enough to permit effective majorities without tortured and tenuous coalitions.

Worse, the power vacuum will mean that pressing national issues cannot be effectively addressed.

A Royal Roman Wrangle

President Francesco Cossiga’s decision to resign to protest the pace of Italy’s political reform caught many in Rome by surprise--and left the nation in the lurch. Most politicians had expected him to stay in office and help form a new government coalition. The Players

Giulio Andreotti

Prime minister required by constitution to quit soon after recent elections

Francesco Cossiga

President resigned in stunning political protest

Giovanni Spadolini

Acting president is left in charge

Effects of Cossiga’s decision

Nothing can be done to form the new governnment needed to redress the country’s disastrous public finances and to combat organized crime until a new president has been elected--a process expected to take weeks, if not months.

The latest resignation was just one more indicator of the chaotic nature of Italian politics, which since World War II has fostered 50 governments, 49 of them coalitions.