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Allocation of authority and tactical redistribution of public investments: A historical quasi-experiment

Author

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  • Tancredi Buscemi

    (University of Siena)

  • Giulia Romani

    (University of Bologna)

Abstract

Devolution of authority over public investments can lead to agency problems and trigger tactical redistribution between different tiers of government. We test this hypothesis in the context of the Cassa per il Mezzogiorno: a massive development programme for Southern Italy (1950-1984). By 1971, the authority over funds allocation was transferred from a centralised committee to the newborn regional governments. We combine unique historical data on local administrators with detailed information on projects, and find that, after devolution, municipalities aligned with the regional government were assigned a higher number of projects, without producing any positive impact on long-run economic outcomes.

Suggested Citation

  • Tancredi Buscemi & Giulia Romani, 2022. "Allocation of authority and tactical redistribution of public investments: A historical quasi-experiment," Working Papers 2022:18, Department of Economics, University of Venice "Ca' Foscari", revised 2024.
    • Handle: RePEc:ven:wpaper:2022:18
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    More about this item

    Keywords

    institutional design; distributive politics; devolution; regional development; Cassa per il Mezzogiorno;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-

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