Fiscal Discipline, Uneven Regional Consequences: Evidence from the Italian National Health Service

Fiscal consolidation in decentralised public-service systems may produce uneven territorial consequences. In Italy’s National Health Service, regional governments are responsible for organising healthcare but differ substantially in fiscal capacity and service provision. Between 2007 and 2010, ten of the country’s twenty regions entered negotiated recovery plans combining stricter budget constraints with organisational reforms and, in some cases, recruitment restrictions. Using annual regional data spanning 1994-2023, this article examines how public healthcare staffing and patient out-migration evolved following the introduction of these plans. The two outcomes capture, respectively, an essential input into regional service capacity and residents’ reliance on hospital care outside their region of residence. We construct a separate synthetic control for each treated region using regions that never entered the programme. Public healthcare personnel per 1,000 residents fell persistently below the estimated counterfactual in several regions but showed no systematic divergence in others. Patient out-migration followed a less uniform pattern, with a clear persistent increase in only one region and period -specific increases elsewhere. The findings show that a common national framework of fiscal discipline was associated with markedly different trajectories across regional healthcare systems. Evaluations of fiscal recovery should therefore consider its territorial distribution and implications for service capacity, rather than financial outcomes alone.