Emma Galli

Political Budget Cycles: The Case of the Western German Lander

This paper focuses on the issue of the electoral andideological cycles in state government budget for the elevenWestern German Länder. We verify this hypothesis over theperiod 1974–1994 for the following budgetary variables: totalexpenditures, surplus/deficit, administration, health care,education, roads and social security benefits. While overallour results seem to show that generally the party variabledoes not play a systematic role in spending decisions, theyprovide some support to the opportunistic cycle theory showingthat the only relevant phenomenon is the effect of theupcoming election on the government spending inclinations.

Comparing the growth effects of marginal vs. average tax rates and progressivity

Abstract The paper compares the appropriateness and explanatory power of marginal tax rates, average tax rates and tax progressivity as measures of the impact of taxation on growth. Data are organized as a panel of 25 industrialized countries from 1970 to 1998. Contrary to previous empirical research, but consistently with theory, we find that marginal effective tax rates and tax progressivity have a negative influence on economic growth. This negative correlation turns out to be robust after controlling for state and policy variables. Average tax rates, on the other hand, seem not to affect output dynamics.

Do Fiscal Decentralization and Government Fragmentation Affect Corruption In Different Ways? Evidence from a Panel Data Analysis

Are countries characterized by more decentralized fiscal and spending powers less corrupt? Or is a higher degree of government fragmentation a more effective way to deter corruption? Is there any evidence that these alternative ways to enhance government accountability reinforce each other? This paper tries to answer these questions by using several indicators of government fragmentation and fiscal decentralization for a panel of 23 countries in the 1995-2007 time interval. Taken separately, while various measures of government fragmentation do not seem to affect corruption in any significant way, fiscal decentralization measured as fiscal and spending autonomy does seem to reduce corruption. This latter effect is reinforced if fiscal decentralization is combined with a high degree of government fragmentation at the local level. The results appear robust to different specifications of the empirical model.

Would You Trust an Italian Politician? Evidence from Italian Regional Politics

This chapter evaluates the erosion of electoral accountability of the “Governors” of the Italian Regions in three subsequent political moments: (1) the elections, (2) the inaugural speeches of the Governor, (3) their first important policy decision, the long-term regional budget (DPEFR). We use content analysis (Laver et al. 2003) to assess the position of each Governor on a left to right distribution at the moment of the inaugural speeches and of the DPEFR. We then analyze the correlation between the distributions of (1) the electoral results and the inaugural speeches and (2) the inaugural speeches and the DPEFR, under the hypothesis that greater similarity can be interpreted as greater accountability. The analysis detects some erosion of accountability from the elections to the inaugural speeches, and a more serious one from the inaugural speeches to the DPEFR. A series of ANOVA tests suggest that the Region’s relative economic position/dependency on transfers from the central governments partly explains such loss of accountability.

Bank Credit Access and Gender Discrimination: Some Stylized Facts

Based on a broad body of literature that investigates the determinants of gender discrimination in the credit market, we provide some descriptive evidence on women’s access to credit by employing a set of financial viability and socio-economic data for a sample of 11 European countries after the global financial crisis (2009–2013). From our preliminary analysis it emerges that, on the demand side, female firms apply for bank loans less than male firms, and one of the relevant determinants for their decision not to apply is the fear of rejection. On the supply side, when applying, female firms face a higher rate of rejection or receive less bank financing than male firms. No general patterns seem to emerge when crossing micro and macro data, even though at the country level, we detect some correspondence between banking system characteristics, socio-institutional indicators and gender differences in access to formal credit.

Dimensions of civic activism and their effectiveness in exposing corruption: evidence from Italy

ABSTRACT This article studies the influence of civic activism in exposing corruption across Italian regions. Using different dimensions of civic activism (including local and national newspapers, the internet, blood donors, and voter turnout), we make the distinction between active (media, internet, voters) and passive (blood donors) activism. Results show interesting different impacts of civic activism on corruption. In particular, voter turnout, blood donors, and national newspaper diffusion consistently increased exposure of corruption, while the internet and local newspapers showed opposite effects. Thus, local newspapers and the internet point to the possibility of media capture (influence) with regard to corruption exposure. The main findings hold following the substantial reforms in the nineties (called Mani Pulite).

Legal-Institutional Environment, Social Capital and the Cost of Bank Financing for SMEs: Evidence from the Euro Area

This chapter addresses the question of whether a country’s legal-institutional and social environment affects the cost of bank financing for SMEs. We employ 22,295 firm-level observations drawn from the ECB SAFE from 2009 to 2013 as a sample of eleven euro area countries. After controlling for firm characteristics and macroeconomic features, we find that a less efficient judicial system as well as a higher degree of concentration of the banking industry increases the cost of funding for SMEs; the latter is instead reduced when the market share of cooperative banks and social capital are higher. Overall, we provide evidence that a better institutional and social environment produces positive externalities in the credit market, thereby favouring the cost of bank financing for SMEs.