Local government efficiency and economic growth: The Italian case

Francesco Perugini

Socio-Economic Planning Sciences, 2024, vol. 91, issue C

Abstract: This paper builds on the empirical literature that analyses the relationship between government efficiency and economic growth by investigating the link on a sample of about 3800 Italian municipalities. While the correlation has been explored at country or regional level, empirical studies at municipal or city level are virtually absent. This is a severe limitation given the numerous fiscal decentralization reforms that took place in many European countries over the last few decades aimed at increasing the autonomy and responsibilities of sub-national government. Estimation results show that government efficiency, when instrumented, is conducive for economic growth. The effect is larger for low populated municipalities, for those located in the South of Italy, and in more peripheral areas. Results are robust to alternative measures of efficiency and growth.

Keywords: Economic growth; Government efficiency; Italian municipalities (search for similar items in EconPapers)
JEL-codes: H21 H72 R11 R50 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:soceps:v:91:y:2024:i:c:s0038012123002872

DOI: 10.1016/j.seps.2023.101775

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