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On the unintended effects of public transfers: evidence from EU funding to Southern Italy

Author

Listed:
  • Ilaria De Angelis

    (Bank of Italy)

  • Guido de Blasio

    (Bank of Italy)

  • Lucia Rizzica

    (Bank of Italy)

Abstract

We study the relationship between the accrual of large financial transfers from a central level of government and the incidence of white collar crimes against public administration and public faith at the local level. We analyse the case of EU funding to Southern Italy and make use of within-municipality variation in the flow of funds between 2007 and 2014. We find a statistically significant effect of transfers on white collar crimes: our estimates suggest that in the absence of EU funding disbursements, the annual number of white collar crimes in Southern Italy would have been 4 per cent lower. We acknowledge that the evidence we provide cannot be taken as fully conclusive given the possible simultaneity of criminal activities and funding assignments and disbursements. Nevertheless, we provide evidence that the correlations we estimated between transfers and white collar crimes are unlikely to be spurious or due to confounding effects.

Suggested Citation

  • Ilaria De Angelis & Guido de Blasio & Lucia Rizzica, 2018. "On the unintended effects of public transfers: evidence from EU funding to Southern Italy," Temi di discussione (Economic working papers) 1180, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_1180_18
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    References listed on IDEAS

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    3. Maximilian v. Ehrlich & Henry G. Overman, 2020. "Place-Based Policies and Spatial Disparities across European Cities," Journal of Economic Perspectives, American Economic Association, vol. 34(3), pages 128-149, Summer.
    4. Capella-Ramos, João & Checherita-Westphal, Cristina & Leiner-Killinger, Nadine, 2020. "Fiscal transfers and economic convergence," Occasional Paper Series 252, European Central Bank.
    5. Ciani, Emanuele & David, Francesco & de Blasio, Guido, 2019. "Local responses to labor demand shocks: A Re-assessment of the case of Italy," Regional Science and Urban Economics, Elsevier, vol. 75(C), pages 1-21.
    6. Albanese, Giuseppe & Barone, Guglielmo & de Blasio, Guido, 2022. "Populist voting and losers’ discontent: Does redistribution matter?," European Economic Review, Elsevier, vol. 141(C).

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    More about this item

    Keywords

    regional transfers; white collar crimes; EU funds;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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