Siting public facilities: a theoretical and empirical analysis of the Nimby syndrome in Italy

Roberta Occhilupo (), Giuliana Palumbo () and Paolo Sestito ()
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Roberta Occhilupo: Bank of Italy, Economics, research and international relations
Giuliana Palumbo: Bank of Italy, Economics, research and international relations
Paolo Sestito: Bank of Italy, Economics, research and international relations

No 91, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: The paper discusses the economic problem and the institutional features underlying the Nimby syndrome, and illustrates preliminary empirical evidence for Italy. It argues that siting procedures taking local preferences into account should be preferred when the heterogeneity in preferences across communities is greater than the heterogeneity in constructing and operating costs across sites. The elicitation of preferences is better pursued through auction-like mechanisms rather than multilateral negotiations if: the characteristics of the facility and the institutional context are such that credible information about the risks associated with the facility are available; conflicting preferences at the local level can be preliminarily aggregated; and compensations are mainly monetary. Empirical results suggest that the intensity of local opposition is greater when the perceived risk associated with the facility is higher and more concentrated, and the communication between different levels of government poor. The conflict between highly centralized siting procedures and highly decentralized administrative institutions, the difficulty of providing credible information about the risks associated with the facility, and low political commitment are identified as the critical points.

Keywords: siting procedures; local preferences; constructing and operating costs; auction; negotiation (search for similar items in EconPapers)
JEL-codes: D44 D73 D82 H7 (search for similar items in EconPapers)
Date: 2011-04
New Economics Papers: this item is included in nep-pol and nep-ure
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