What’s a counterfactual history for Mussolini’s Italy? It cannot be fantastic. Must be grounded in reality. It also must account for Cold War reality. The path a neutral Mussolini could have taken was Franco’s Spain except with better foundations.

Italy had no civil war to destroy it.
Italy had an intellectual foundation for its regime.
Italy’s gov had taken over its economy yet allowed pragmatic flexibility.
Italy had much more strategic importance & a bigger population than Spain.
The mix was there for them to be courted

Spain was reviled by global media yet stayed neutral in WW2 and their neutrality despite “friendship” with Nazi Germany they didn’t take Gibraltar for the Germans. This & Portuguese diplomacy prevented the Brits from invading. Spain was a mess after their civil war.

Italy’s tragic misstep was their fascist intellectuals becoming empire oriented while Italy itself was still a wreck. The global depression crushed them. Had they stayed focused on the peninsula, they would’ve not incurred the wrath of the Anglos. A neutral Italy becomes a prize

Italy’s state planners failed to see that during Germany’s Versailles sanctions, it could’ve been a platform for German manufacturing of arms a la USSR. This would’ve given them defense R&D well beyond their means and built up industry. Just arming the Germans would’ve worked.

This supplying the Germans would be like Argentina’s ‘30s where they made money supplying both sides with raw materials. Their supplying and not allying with Germany would make them a diplomatic target to woo by the Anglos. Much better to be bought than bombed.

Italy could have avoided the war’s devastation and jumped in once the chessboard made a German defeat inevitable. Factories supplying Germany would be altered to supply the Anglos. They’d be standing intact come 1945. They could have rebuilt Western Europe.

The Abyssinia War was the dumb strike for empire. This brought sanctions and pushed them closer to Nazi Germany. From there, their brains started to push fascism towards natsoc ideology in painful ways. Worst of all, it forced Mussolini into a spot of supporting Hitler & his wars

No foreign engagements, no overthrow and Italy keeps Libya. Libya’s oil strike in the ‘60s would’ve brought it major rewards. Mussolini’s Italy would’ve been courted by US/USSR alike. Likely play the two off each other but stay like Franco’s Spain, anti-communist.

Moment of truth would have been Mussolini’s death and the succession. If he chose a clear successor with great training from 1940-1970, Italy could have faced the eventual color op that Portugal did. If not, it would have reverted to crappy democracy quickly.

I believe Mussolini’s Italy would have succeeded during his lifetime but Italy had Years of Lead in our timeline. A fight after Mussolini was guaranteed, just the timing would matter. A democracy would have arrived but with a fascist streak.

Italy’s survival in this timeline would make fascism a very different animal in government system discussions. Italy, Portugal, Spain would offer alternatives to what we have now and not be smeared by Nazi boogeyman associations.