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Hooked on a subsidy: transfers and preferences for State intervention

Giuseppe Albanese (), Guido DeBlasio () and Lorenzo Incoronato ()
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Guido DeBlasio: Banca d'Italia

Authors registered in the RePEc Author Service: Guido de Blasio ()

No 2021-02, Discussion Paper series in Regional Science & Economic Geography from Gran Sasso Science Institute, Social Sciences

Abstract: Residents of areas that benefit from outside assistance may develop preferences towards more state intervention and distrust of the market economy. The paper focuses on the backward territories of the Centre and South of Italy, where a massive place-based policy (extraordinary intervention in the Mezzogiorno) was implemented over the second half of the twentieth century (from 1950 to 1992). We leverage quasi-experimental variation in public transfers to show that people’s attitudes towards state intervention have been shaped permanently in the subsidized areas. We also document that these preferences do not depend on the long-term economic impact of the policy, which was very small, and are empirically well distinguishable from other attitudes in favor of populist instances.

Keywords: Preferences for state intervention; transfers; place-based policies (search for similar items in EconPapers)
JEL-codes: H2 I38 P16 R58 (search for similar items in EconPapers)
Pages: 64 pages
Date: 2021-02, Revised 2021-02
New Economics Papers: this item is included in nep-his
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