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Determinants of Fiscal Distress in Italian Municipalities

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  • W. D. Gregori
  • L. Marattin

Abstract

Fiscal distress of local governments and municipalities is a non-negligible component of the public finance turmoil after the Great Recession. In this paper we consider a dataset of Italian municipalities over the period 2000-2012 and look for the main budget determinants of local default. According to our results the default probability is positively affected by the share of loan repayment over total spending. This result is robust to alternative model specifications as well as inclusion of fixed effects, time dummies and macroeconomic control variables.

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  • W. D. Gregori & L. Marattin, 2015. "Determinants of Fiscal Distress in Italian Municipalities," Working Papers wp1024, Dipartimento Scienze Economiche, Universita' di Bologna.
    • Handle: RePEc:bol:bodewp:wp1024
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    Cited by:

    1. Cristiana Fiorelli & Nicola Pontarollo & Carolina Serpieri, 2022. "Legislative interventions for the Italian local public financial distress," Working Papers in Public Economics 219, Department of Economics and Law, Sapienza University of Roma.
    2. Emanuele Padovani & Francesco Porcelli & Alberto Zanardi, 2024. "The determinants of the financial distress of Italian municipalities: How much is it due to inadequate resources?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(6), pages 1494-1533, December.
    3. Antulov-Fantulin, Nino & Lagravinese, Raffaele & Resce, Giuliano, 2021. "Predicting bankruptcy of local government: A machine learning approach," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 681-699.

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    More about this item

    JEL classification:

    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing

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