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Distribution of transfers and soft budget spending behaviors: evidence from Italian regions

Author

Listed:
  • Fabio Padovano

    (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper examines empirically the strategic interactions among central and subcentral governments when incomplete information forces the subcentral government to form expectations about the amount of transfers that it will receive from the central one. The empirical analysis features a wide array of proxies for transfer expectations and uses an autoregressive modeling technique to estimate them on a sample of 20 Italian Regions for the 1995-2009 time interval. The analysis shows that transfer expectations are a quantitatively important component of local government spending, revealing evidence of soft budget spending behavior.

Suggested Citation

  • Fabio Padovano, 2014. "Distribution of transfers and soft budget spending behaviors: evidence from Italian regions," Post-Print halshs-00911854, HAL.
    • Handle: RePEc:hal:journl:halshs-00911854
    DOI: 10.1007/s11127-013-0119-1
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    Cited by:

    1. Monica Auteri & Alessandro Cattel, 2023. "Political Fragmentation and Coalition Alignment effects: Evidence from health Transfers to Italian Regions," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 9(3), pages 1181-1216, November.
    2. Salvador Barrios & Diego Martínez-López, 2017. "Fiscal equalization schemes and subcentral government borrowing," Chapters, in: Naoyuki Yoshino & Peter J. Morgan (ed.), Central and Local Government Relations in Asia, chapter 4, pages 130-160, Edward Elgar Publishing.
    3. Giuseppe Di Vita, 2018. "Institutional quality and the growth rates of the Italian regions: The costs of regulatory complexity," Papers in Regional Science, Wiley Blackwell, vol. 97(4), pages 1057-1081, November.
    4. Fiorillo, Fabio & Lucarelli, Stefano, 2024. "Political electoral cycles and evolution of Italian health care system financing. A long run perspective," Socio-Economic Planning Sciences, Elsevier, vol. 94(C).
    5. Padovano, Fabio & Sy, Youssoufa, 2026. "Conditional political legislation cycles," International Review of Law and Economics, Elsevier, vol. 85(C).

    More about this item

    Keywords

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    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H73 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Interjurisdictional Differentials and Their Effects
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation

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