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Interregional redistribution and risk sharing through public budget. The case of Italy in times of crisis (2000–2016)

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  • Petraglia, Carmelo
  • Pierucci, Eleonora
  • Scalera, Domenico

Abstract

Since the post-war period, large differences in economic performance of Italian regions have brought the public sector to play a predominant role in interregional redistribution and risk sharing. However, the recent Great Crisis may have changed this attitude. The comparison of regional Net Fiscal Flows in the periods 2000–2008 and 2009–2016 shows that in the aftermath of the crisis fiscal policies lost substantial part of their effectiveness in both interregional long-run redistribution and short-run income stabilization. Over time, the role of government in providing support to poorer regions and to areas more severely hit by the economic slump becomes less significant and sometimes even perverse, amplifying rather than counterbalancing regional differences in per capita income and financial capacity.

Suggested Citation

  • Petraglia, Carmelo & Pierucci, Eleonora & Scalera, Domenico, 2020. "Interregional redistribution and risk sharing through public budget. The case of Italy in times of crisis (2000–2016)," Structural Change and Economic Dynamics, Elsevier, vol. 53(C), pages 162-169.
    • Handle: RePEc:eee:streco:v:53:y:2020:i:c:p:162-169
    DOI: 10.1016/j.strueco.2020.02.005
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    More about this item

    Keywords

    Net Fiscal Flows; Italy; Interregional redistribution; Interregional risk sharing;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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