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Lost in Corruption. Evidence from EU Funding to Southern Italy

Ilaria Angelis (), Guido de Blasio () and Lucia Rizzica ()
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Ilaria Angelis: Bank of Italy, DG Economics, Statistics and Research, Structural Economic Analysis Directorate
Lucia Rizzica: Bank of Italy, DG Economics, Statistics and Research, Structural Economic Analysis Directorate

Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, 2020, vol. 6, issue 2, No 7, 355-377

Abstract: Abstract Windfall government revenues may generate an increase in the occurrence of corruption by reducing the degree of political accountability. This paper empirically investigates the relationship between the accrual of large financial transfers from a central level of government and the incidence of corruption at the local level. To this purpose we analyze the case of EU funding to Southern Italy and exploit within municipality variation in the flow of funds between 2007 and 2014. Our estimates show a statistically significant positive effect of transfers on corruption crimes: in the absence of EU funds disbursements the yearly number of white collar crimes in the South of Italy would have been 4% lower.

Keywords: Regional transfers; Corruption; EU funds (search for similar items in EconPapers)
JEL-codes: D7 H3 H7 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s40797-020-00123-2

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