THINGS in Naples are as bad as they were here before Reagan and Rambo: They've got low housing starts and a negative national attitude.

"Where's Picone," a slight, satiric whodunit, addresses socio-economic unrest, southern Italian style. Giancarlo Giannini, best known for his work in "Seven Beauties" and "Swept Away," is enjoyable in a starring role despite the variability of the script from savory to slow.

He plays a gentle, mostly moral shopping- bag lawyer named Salvatore. Times being what they are, he's on the skids, a courtroom hustler who lives out of a plastic bag filled with legal papers, spare pasta and socks. He's in his office -- a bench in the courthouse actually -- when the bereaved Mrs. Picone comes to collect her husband's body. He offers to identify the remains for a few thousand lire, but the late (or is he?) Picone's whereabouts are unknown.

Lina Sastri, who plays Picone's sensational widow, and Giannini won Italian Oscars for their partnership in "Where's Picone?" -- as much a slow-to-simmer romance as a sociological mystery. The couple get to know each other a little better as they follow a trail that takes them through a disaffected underworld of regular guys and dolls who've become hoods and whores.

Director Nanni Loy of "Cafe Express," who came up with the story idea, creates an amusing mystery of character, but not a very provocative one I'm afraid. He sacrifices suspense for his message: An honest man must turn to crime to keep a family of four in veal picata.