The slump in support for the Christian Democrats in last month's general election illustrates how far Italy has come since the early postwar era when politics here was dominated by primal influences like the fear of communism and the power of the Roman Catholic Church.

At the same time, the country's failure to develop a stable two-party system--with power alternating between left and right--points to the gulf that still separates Italy from the rest of Western Europe. The country seems condemned to a succession of weak center-left coalitions during a period when it is most in need of a strong government to tackle its deepening economic crisis.

Negotiations on forming a new administration, Italy's 44th since World War II, are expected to pick up momentum when parliament reconvenes Tuesday. Encouraged by the Christian Democratic losses, both the Socialists and the minor lay parties in the center have been demanding a bigger say in policy making and a larger share of ministerial seats.

The political maneuvering has been complicated by the fact that, while the election was certainly "lost" by the Christian Democrats, it is hard to say who "won."

The Christian Democrats' share of the vote for the Chamber of Deputies fell to its lowest level ever: 32.9 percent, down from a steady plateau of around 38 percent for the past two decades and well over 40 percent in the 1950s.

The relative ranking of the other major parties remained the same. The Communists won 29.9 percent of the vote, the Socialists 11.4 percent, and the neofascist Italian Social Movement 6.8 percent. The number of Italians who deliberately spoiled their ballots or cast blank ballots rose by nearly one third compared to the last elections in 1979.

Many analysts attributed the Christian Democrats' losses to social and psychological changes in the Italian electorate--and the party's failure to modernize its appeal.

"For years, a vote for Christian democracy was a negative vote," political scientist Norberto Bobbio wrote in the Turin newspaper La Stampa. "The people . . . didn't want communism. Today the fear of communism is less and so is the vote for the Christian Democrats."

In 1948, when the Christian Democratic vote reached a peak of 48.5 percent, Italy was still a poor and predominantly agricultural country. Memories of the devastation wrought by World War II and Benito Mussolini's fascist dictatorship were vivid. The Cold War was just beginning and the overwhelming majority of Italians wanted to remain part of the West.

Thirty-five years later, Italy has become industrialized, thanks to the "economic miracle" of the early 1960s. There has been a massive migration from south to north and from the countryside to the cities. The Communist Party has broken with Moscow and the Christian Democrats no longer enjoy such close ties with the Vatican as they once did. But political power is still wielded in the old, traditional way--through local patronage and personal friendships.

The election result was interpreted as a personal defeat for Christian Democratic Secretary Ciriaco de Mita, who had sought to project a new image of efficiency and dynamism for his party after a string of corruption scandals and a record of economic mismanagement. His goal was to transform the Christian Democrats into a modern conservative party on the West German or British pattern.

Key elements in De Mita's strategy were the forging of an alliance with the business community rather than the church and strengthening of the party in the great cities rather than the countryside.

As it turned out, the Christian Democrats performed disastrously in the cities--running second to the Communists virtually everywhere except in their traditional strongholds in the south like Bari and Palermo. In the northern industrial centers of Milan and Turin, they lost ground to the small Republican Party, which has been rather more consistent in its advocacy of rigorous economic policies.

Film producer Franco Zeffirelli, who was chosen to add glamor to the Christian Democrats' ticket in Florence, lost badly. Guido Carli, a former Bank of Italy governor who is much respected in international financial circles, managed to scrape home in Milan. But his reputation did nothing for the overall Christian Democratic vote in his well-heeled electoral district, where it fell by a stunning 11 percentage points.

The net result of De Mita's efforts to push the Christian Democratic Party into the eighties seems to have been to antagonize traditional voters without attracting replacements. Italians concerned with the rise in crime protested by supporting the neofascists. People worried about corruption either abstained or voted for the Republicans, who have managed to remain relatively clean.

A similar if less dramatic fate befell Socialist Party leader Bettino Craxi, who provoked the election when, in April, he withdrew support for Christian Democratic Prime Minister Amintore Fanfani. By bringing the government down a year ahead of schedule, he had hoped to benefit from a general leftward swing in southern Europe that has brought socialist-led governments to power in France, Portugal, Spain and Greece.

The gamble failed, but Craxi was saved from getting egg on his face by the scale of the Christian Democrats' losses. The Socialists have remained the joker in the Italian political deck, a vital component in any new center-left coalition. It is a measure of the present confusion that Craxi is even being talked about as a possible future prime minister, along with Republican leader Giovanni Spadolini, whose party made the largest proportional gains.

The tactical strength of the Socialists derives from the fragmented nature of the Italian political system and a continuing taboo against either the Communists or the neofascists entering a government. The Socialists have already rejected Communist overtures to form a "democratic alternative" of the left excluding the Christian Democrats.

In normal circumstances, the present political maneuvering would probably result in the formation of a stopgap administration known here as a "beach government" with the sole task of running the country over the summer holiday. This civilized solution seems to have been precluded this year, however,by the gravity of the economic crisis.

The caretaker Treasury minister, Giovanni Goria, warned last week that urgent action is needed to shrink a ballooning state budget deficit that could reach $60 billion this year. He said an austerity package involving expenditure cuts of around $10 billion must be put together within the next five or six weeks to keep the situation from getting completely out of control.

"By September, it could be too late," he warned.

Italy's best-known writer, Alberto Moravia, summed up the results of the election in a newspaper interview by saying that "psychologically, something has changed" even though the Christian Democratic vote did not entirely collapse.

"It's like a boxing champion being knocked to the canvas," he said. "He remains a champion, but he's no longer invincible.".