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Effects of Electoral Rules, Political Competition and Corruption on the Size and Composition of Government Consumption Spending: An Italian Regional Analysis

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  • Baraldi A. Laura

    (Second University of Naples)

Abstract

This paper analyses how proportionality of the electoral system, political competition and corruption affect the total amount of Italian regional public consumption expenditure and alter the public budget structure. The Italian case is particular: from 1993 the country underwent a change in the electoral system (from proportional to majoritarian) and, at the same time, a campaign was waged against the corruption of public bureaucrats. The aim of this work is to study the political determinants of public consumption spending, and more specifically the role played by political institutions (meaning electoral rules), the intensity of political competition in the "votes' market" and the corruption of public bureaucracy. We used panel data for 20 Italian regions from 1980 to 2003 in order to estimate a quantity effect and an allocation effect of the degree of proportionality of the electoral system, political competition and corruption of public bureaucracy on public consumption spending. The quantity effect of the proportionality of the electoral system and of the degree of political competition is positive; the same holds for corruption, meaning that corruption increases the total level of public spending. Analysis of the allocation effect shows that corruption, rather than the electoral system and political competition, alters the public budget structure towards social services and securities and general service sectors instead of education and health, leading to important policy implications.

Suggested Citation

  • Baraldi A. Laura, 2008. "Effects of Electoral Rules, Political Competition and Corruption on the Size and Composition of Government Consumption Spending: An Italian Regional Analysis," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-37, July.
    • Handle: RePEc:bpj:bejeap:v:8:y:2008:i:1:n:24
    DOI: 10.2202/1935-1682.1825
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    3. Andros Kourtellos & Alex Lenkoski & Kyriakos Petrou, 2020. "Measuring the strength of the theories of government size," Empirical Economics, Springer, vol. 59(5), pages 2185-2222, November.
    4. Baraldi, Anna Laura & Ronza, Carla, 2019. "Organized crime and women in politics: Evidence from a quasi-experiment in southern Italy," MPRA Paper 98473, University Library of Munich, Germany.
    5. Adriana S. Cordis, 2014. "Corruption and the Composition of Public Spending in the United States," Public Finance Review, , vol. 42(6), pages 745-773, November.
    6. Erasmo Papagni & Amedeo Lepore & Emanuele Felice & Anna Laura Baraldi & Maria Rosaria Alfano, 2018. "Public Investment and Growth Accelerations: The Case of Southern Italy, 1951-1995," EERI Research Paper Series EERI RP 2018/10, Economics and Econometrics Research Institute (EERI), Brussels.
    7. Jeffrey Milyo & Adriana Cordis, 2013. "Measuring Public Corruption in the United States: Evidence from Administrative Records of Federal Prosecutions," Working Papers 1322, Department of Economics, University of Missouri.
    8. Papagni, Erasmo & Lepore, Amedeo & Felice, Emanuele & Baraldi, Anna Laura & Alfano, Maria Rosaria, 2021. "Public investment and growth: Lessons learned from 60-years experience in Southern Italy," Journal of Policy Modeling, Elsevier, vol. 43(2), pages 376-393.
    9. Raffaella SANTOLINI, 2013. "Electoral rules and public expenditure composition: Evidence from Italian regions," Working Papers 396, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
    10. Raffaella Santolini, 2017. "Electoral Rules And Public Spending Composition: The Case Of Italian Regions," Contemporary Economic Policy, Western Economic Association International, vol. 35(3), pages 551-577, July.
    11. Andros Kourtellos & Alex Lenkoski & Kyriakos Petrou, 2017. "Measuring the Strength of the Theories of Government Size," University of Cyprus Working Papers in Economics 11-2017, University of Cyprus Department of Economics.
    12. M.Rosaria Alfano & A. Laura Baraldi, 2008. "The design of electoral rules and their impact on economic growth: the Italian case," Working Papers 3_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.

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