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The Costs of Corruption in the Italian Solid Waste Industry

Author

Listed:
  • Graziano Abrate

    (Department of Business Management and Environment, University of Eastern Piedmont)

  • Fabrizio Erbetta

    (Department of Business Management and Environment, University of Eastern Piedmont)

  • Giovanni Fraquelli

    (Department of Business Management and Environment, University of Eastern Piedmont)

  • Davide Vannoni

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

Abstract

The paper investigates the link between corruption and efficiency by using a rich micro-level dataset concerning solid waste collection activities in 529 Italian municipalities observed over the years 2004-2006. In order to test the impact of corruption on cost efficiency we estimate a stochastic latent class frontier approach, which accounts for technological heterogeneity across units. The results of our estimates show that corruption significantly increases inefficiency, a finding which is robust to the inclusion of alternative local corruption indicators and of other control variables such as geographical, demographic and political factors. Finally, we find that the impact of corruption tends to be greater in the southern regions of the country and for those municipalities which are less involved in recycling activities.

Suggested Citation

  • Graziano Abrate & Fabrizio Erbetta & Giovanni Fraquelli & Davide Vannoni, 2012. "The Costs of Corruption in the Italian Solid Waste Industry," Working papers 004, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    • Handle: RePEc:tur:wpapnw:004
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    References listed on IDEAS

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    Cited by:

    1. Soroush, Golnoush & Cambini, Carlo & Jamasb, Tooraj & Llorca, Manuel, 2021. "Network utilities performance and institutional quality: Evidence from the Italian electricity sector," Energy Economics, Elsevier, vol. 96(C).
    2. Massimo Finocchiaro Castro & Calogero Guccio & Giacomo Pignataro & Ilde Rizzo, 2018. "Is competition able to counteract the inefficiency of corruption? The case of Italian public works," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 45(1), pages 55-84, March.
    3. Giuseppe Cinquegrana & Serena Migliardo & Domenico Sarno, 2016. "Comparative analysis of private and public provision of the water and waste services by the Italian municipalities," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2016(3), pages 149-176.
    4. Graziano Abrate & Federico Boffa & Fabrizio Erbetta & Davide Vannoni, 2018. "Voters’ Information, Corruption, and the Efficiency of Local Public Services," Sustainability, MDPI, vol. 10(12), pages 1-22, December.
    5. Fortuna Casoria & Marianna Marino & Pierpaolo Parrotta & Davide Sala, 2019. "Local Government and Innovation: the case of Italian provinces," Working Papers 1923, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    6. Fusco, Elisa & Allegrini, Veronica, 2020. "The role of spatial interdependence in local government cost efficiency: An application to waste Italian sector," Socio-Economic Planning Sciences, Elsevier, vol. 69(C).
    7. Massimo Finocchiaro Castro & Calogero Guccio & Ilde Rizzo, 2014. "An assessment of the waste effects of corruption on infrastructure provision," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 21(4), pages 813-843, August.
    8. Simona Baldi & Davide Vannoni, 2017. "The impact of centralization on pharmaceutical procurement prices: the role of institutional quality and corruption," Regional Studies, Taylor & Francis Journals, vol. 51(3), pages 426-438, March.
    9. Baldi, Simona & Bottasso, Anna & Conti, Maurizio & Piccardo, Chiara, 2016. "To bid or not to bid: That is the question: Public procurement, project complexity and corruption," European Journal of Political Economy, Elsevier, vol. 43(C), pages 89-106.
    10. Simona Baldi & Davide Vannoni, 2014. "The Impact of Centralization, Corruption and Institutional Quality on Procurement Prices: An Application to Pharmaceutical Purchasing in Italy," Carlo Alberto Notebooks 379, Collegio Carlo Alberto.
    11. Berardino Cesi & Alessio D’Amato & Mariangela Zoli, 2019. "Corruption in environmental policy: the case of waste," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 36(1), pages 65-78, April.
    12. Baraldi, Anna Laura & Cantabene, Claudia & De Iudicibus, Alessandro, 2023. "Fighting crime for improved recycling: evaluating an anti-mafia policy on source separation of waste," MPRA Paper 120296, University Library of Munich, Germany.

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    More about this item

    Keywords

    corruption; cost inefficiency; latent class stochastic frontier; solid waste;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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