EconPapers    
Economics at your fingertips  
 

Analysis of Public Subsidies to the Solar Energy Sector: Corruption and the Role of Institutions

Fabio Moliterni
Additional contact information
Fabio Moliterni: Fondazione Eni Enrico Mattei

No 2017.33, Working Papers from Fondazione Eni Enrico Mattei

Abstract: This study investigates the connection between rent-seeking behaviour, corruption activity and quality of institutions to empirically evaluate the unexpected implications of an energy policy for criminal activity. The object of this research is a program of public subsidies introduced in Italy in 2005, which successfully boosted the solar energy sector but seems to have generated a growth of corruption activity, arisen from the opportunity of rent extraction. In particular, according to the main hypothesis of this research, bribery is expected to rise significantly where big photovoltaic plants are concentrated and administrative procedures are more complicated. To determine the causal effect of the subsidies on corruption, the study employs a Difference-in-Difference methodology on a sample of 76 Italian provinces and exploits solar radiation as exogenous variable to discriminate the profitability of investments and bribing. Results confirm that, in poor-institutions areas, the growth of the solar sector in sunniest provinces has gone hand in hand with increasing corruption. Results suggest that policy makers should pay additional attention to the potential distortions of public policies implying large rent opportunities, in areas where the weakness of institutional settings and the bureaucratic complexities encourage illegal behaviour.

Keywords: Renewable Energy; Corruption; Public Subsidies; Legal Institutions (search for similar items in EconPapers)
JEL-codes: O13 D73 P47 H23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-reg
Date: 2017-07
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://www.feem.it/m/publications_pages/NDL2017-033.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2017.33

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by barbara racah ().

 
Page updated 2019-12-10
Handle: RePEc:fem:femwpa:2017.33