Decentralization of public expenditure and growth in Italy: Does the composition matter?

Alessandra Michelangeli

No crn1704, CRANEC - Working Papers del Centro di Ricerche in Analisi economica e sviluppo economico internazionale from Università Cattolica del Sacro Cuore, Centro di Ricerche in Analisi economica e sviluppo economico internazionale (CRANEC)

Abstract: In this paper we exploit data at regional level on decentralized public expenditure provided by Conti pubblici territoriali from 1996 to 2014 and we decompose decentralized public expenditure into current and capital spending. The aim is to disentangle their specific effect on economic growth. Since literature does not provide unanimous indication about the effect of different component of expenditure on growth, we consider a generalized additive model, which is a semi-parametric estimation method that allows more flexibility than conventional estimation techniques. Our findings show a on-linear effect, that is different according to categories of expenditure. More specifically, the effect of capital expenditure is positive, while, decentralized current expenditure tends to have a negative effect on the rate of economic growth.

Keywords: decentralization; capital expenditure; current expenditure, growth (search for similar items in EconPapers)
JEL-codes: R11 R12 R23 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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