On the optimal size of local jurisdiction: the case of Italian provinces

In this paper I exploit the introduction of some new Italian provinces duringthe nineties to evaluate whether the territorial splitting entailed some consequences in termsof local development, schooling and road quality. These are three public goods that Italianprovinces contribute to provide. By contrasting in a difference-in-differences framework municipalities affected by the introduction of new provinces with an appropriate control group, I show that the break-up did not generate any benefit for the affected units. This result is robust to a number of checks: the definition of the treatment, the control group, the functional form of the estimating equation and the empirical strategy.