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Fiscally Responsible Mafia-clans

Author

Listed:
  • Sergio Beraldo

    () (Department of Economics and Statistics, University of Naples "Federico II" (IT), Italy)

  • Massimo Bordignon

    () (Department of Economics and Finance, Catholic University, Milan, Italy)

  • Simone Pellegrino

    () (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

  • Massimiliano Piacenza

    () (Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino, Italy)

  • Gilberto Turati

    () (Department of Economics and Finance, Catholic University, Rome, Italy)

Abstract

To work as an accountability mechanism, fiscal decentralization requires the democratic mechanism to function well. This is generally not the case where the quality of the institutional environment is weak, and local governments might be captured by local oligarchs. We explore this issue by studying how Italian municipalities reacted to an unexpected tax reform reducing tax autonomy at the local level. Focusing on three Southern provinces, where some municipal governments are captured by Camorra clans, our estimates suggest that captured municipalities are less responsive to incentives stemming from re-centralization. We also observe a different recomposition of spending between the two groups, which we interpret - according to our theoretical model - considering the different degrees with which clans can extract rents from public expenditure.

Suggested Citation

  • Sergio Beraldo & Massimo Bordignon & Simone Pellegrino & Massimiliano Piacenza & Gilberto Turati, 2017. "Fiscally Responsible Mafia-clans," Working papers 043, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
  • Handle: RePEc:tur:wpapnw:043
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    File URL: http://www.bemservizi.unito.it/repec/tur/wpapnw/m43.pdf
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    References listed on IDEAS

    as
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    Cited by:

    1. David Bartolini & Agnese Sacchi & Domenico Scalera & Alberto Zazzaro, 2018. "The closer the better? Institutional distance and information blurring in a political agency model," Mo.Fi.R. Working Papers 146, Money and Finance Research group (Mo.Fi.R.) - Univ. Politecnica Marche - Dept. Economic and Social Sciences.

    More about this item

    Keywords

    Tax decentralization; Local government accountability; Institutional quality; Mafia-type organizations;

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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