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Law enforcement, municipal budgets and spillover effects: Evidence from a quasi-experiment in Italy

Sergio Galletta ()

IdEP Economic Papers from USI Università della Svizzera italiana

Abstract: In this paper, I empirically investigate the presence of spillover effects resulting from the strengthening of law enforcement against corruption and organized crime in local governments. Specifically, I take advantage of an Italian law that gives power to the central government to replace democratically elected municipal officials who are potentially connected with mafia with a commission of non-elected administrators. Fixed effects model estimates that focus on a sample of municipalities from three Italian regions (Campania, Calabria and Sicilia) for the period 1998 to 2013 show that the city council dismissal of a municipality fosters a reduction in public investments in neighboring municipalities. Additional empirical evidence suggests that this result could be explained by the presence of law enforcement spillovers potentially reducing misconducts in neighboring municipalities.

Keywords: Horizontal interaction; Italy; Mafia; Corruption (search for similar items in EconPapers)
JEL-codes: D73 E62 H72 K42 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2016-01
New Economics Papers: this item is included in nep-eur, nep-law and nep-ure
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http://doc.rero.ch/record/258072/files/wp1601.pdf (application/pdf)

Related works:
Journal Article: Law enforcement, municipal budgets and spillover effects: Evidence from a quasi-experiment in Italy (2017) Downloads
Working Paper: Law Enforcement, Municipal Budgets and Spillover Effects: Evidence from a Quasi-Experiment in Italy (2016) Downloads
Working Paper: Law enforcement, municipal budgets and spillover effects: evidence from a quasi-experiment in Italy (2016) Downloads
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