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On the optimal size of local jurisdictions: new evidence from Italian provinces

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  • Guglielmo Barone

    ()
    (Bank of Italy)

Abstract

This paper examines the creation of some new provinces in Italy in the 1990s to assess whether the reduction in the size of the local jurisdiction led to benefits in terms of local development, human capital and road quality, which are three public goods provided by the Italian provinces in tandem with other levels of government. By employing a difference-in-differences empirical strategy, and comparing the municipalities belonging to the new provinces (treatments) with other comparable municipalities (controls), I show that the reduction of the size of a province did not generate any benefits in terms of the outcome variables. This result is robust to a number of checks, including the definition of treatment and different functional specifications.

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File URL: http://www.bancaditalia.it/pubblicazioni/econo/temidi/td11/td823_11/en_td823/tema_823.pdf
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Bibliographic Info

Paper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 823.

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Date of creation: Sep 2011
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Handle: RePEc:bdi:wptemi:td_823_11

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Keywords: local government; difference-in-differences;

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