Allocation of authority and tactical redistribution of public investments: A historical quasi-experiment

Trancredi Buscemi () and Giulia Romani ()
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Trancredi Buscemi: University of Siena
Giulia Romani: University of Bologna

No 2022:18, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: Devolution of authority over public investments can lead to agency problems and trigger tactical redistribution between different tiers of government. We test this hypothesis in the context of the Cassa per il Mezzogiorno: a massive development programme for Southern Italy (1950-1984). By 1971, the authority over funds allocation was transferred from a centralised committee to the newborn regional governments. We combine unique historical data on local administrators with detailed information on projects, and find that, after devolution, municipalities aligned with the regional government were assigned a higher number of projects, without producing any positive impact on long-run economic outcomes.

Keywords: institutional design; distributive politics; devolution; regional development; Cassa per il Mezzogiorno (search for similar items in EconPapers)
JEL-codes: H11 H77 N94 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2022, Revised 2024
New Economics Papers: this item is included in nep-his, nep-pol and nep-ure
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:ven:wpaper:2022:18

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