Francesco Prota

The Impact of Fiscal Decentralization on the Composition of Public Expenditure: Panel Data Evidence from Italy

Grisorio M. J. and Prota F. The impact of fiscal decentralization on the composition of public expenditure: panel data evidence from Italy, Regional Studies. This paper is an original contribution to the understanding of the relationship between fiscal decentralization and public expenditure composition. It studies the effects of the ongoing decentralization process in Italy on the share of different categories of public spending in total expenditure of the Italian regional administrations over the period 1996–2008. The data used allow one to go beyond the usual distinction between current and capital expenditures and to present a functional classification of public expenditures. Through a panel data analysis, the paper shows that the level of decentralization influences the composition of expenditure.

Regional Innovation Systems: Which Role for Public Policies and Innovation Agencies? Some Insights from the Experience of an Italian Region

Increasing globalization, if properly exploited, can provide interesting opportunities for regional economies. Nevertheless, when they are not managed with a far-sighted approach, regions, and particularly those at an intermediate level of development, can lose their comparative advantages compared with regions of developing countries. Innovation is the main instrument for improving and ensuring competitiveness to enterprises and growth opportunities to local economies. The aim of this paper is to discuss the importance of public policies in reinforcing regional innovation systems and the role of regional innovation agencies. With this in mind, we describe the policies implemented by the “Regional Agency for Technology and Innovation” of Apulia, a region in Southern Italy, highlighting its main strengths and weaknesses.

Notes on regional convergence processes in Germany and Spain

The analysis presented in this paper highlights entities, the main characteristics and dynamics of regional gaps in Germany and Spain. In the case of Germany, the geographical distribution of weak regions reflects the existence of a well-known West-East gap. After a first phase of sustained convergence in several indicators (GDP per capita, consumption per capita, productivity), following the devastating shocks represented by the unification, since approximately 1996 a second phase has followed, in which the catching-up process has slowed significantly at the aggregate level, with some particularly critical elements: (i) unemployment in eastern Germany has been higher than in western Germany; (ii) wages and average labour productivity have been lower in the new Lander; (iii) migration flows from East to West has been persistent, in particular among young people. Not to mention the large flows of public resources allocated to the Eastern Lander. In the case of Spain two «neighborhoods» have been identified: one in the South (Andalucia and Extremadura) and one in the North-West (Galicia). Regional gaps (and the relative positions of each region) show a high degree of persistence even when considering a very broad time interval: the top positions in the ranking of regional income (Madrid, Catalonia and the Basque Country) and the bottom ones (Extremadura, Andalucia and Galicia) remain unchanged. The weak internal convergence does not seem, therefore, be an exclusively Italian problem. The persistence over time of regional gaps in terms of income per capita seems to characterize the recent economic history of many countries.

Human Capital Formation and the Missing Regional Upgrading in the EU Periphery: The Role of Migration and Education-Job Mismatch

Why the supply of human capital (in peripheral regions) does not create its own demand? The aim of this chapter is to shed lights on the complex channels which link human capital investments, spatial mobility and regional upgrading in peripheral regions. We analyse—using original datasets collected by the authors—two different locally funded human capital investment policies implemented by two neighbouring Italian Mezzogiorno regions, Basilicata and Apulia. In the first part of the chapter, we analyse the ‘leakage’ of the human capital associated to this regional policy through out-migration. This first ‘story’ allows us to underline the high risks of failure of policies which push a single ‘side’ of the human capital market, i.e. its supply, without considering measures that at the same time stimulate its demand. The second policy evaluated in this study was implemented by a larger and more industrialized neighbouring region, Apulia (Borse di ricerca). An ex post evaluation of this policy shows that only 10% of the individual beneficiaries is working outside the region. In this case human capital leakage through migration is limited, but our empirical analysis shows that there is a rather severe education-job mismatch in terms of both people being engaged in precarious employment forms (flexible or part-time) and (low) level of competences required in their actual occupation. These two policy cases indicate, in our opinion, that severe market failures characterize the ‘absorption’ of human capital in the local economy rather than its formation.

Economic Crises and Regional Convergence in the EU: An Exploration of Facts, Theories and Policy Implications

This unique and fascinating book illustrates that the ‘credit crunch’ and the ensuing financial and economic crisis of 2007–2009 did not only strike hard at the economy in the Western world, but also at its policymakers, at economics as a scientific discipline and, more specifically, at the process of European integration itself.

La prospettiva della politica di coesione comunitaria in un'Europa allargata

Cohesion policy has developed from a minor concern to one of the most important pursuits of the European Union. It amounts to about 35% of the EU budget, making it the second largest budget item. A reform of the EU’s structural policies is now unavoidable because of i) the performance of previous policies may be improved, ii) the upcoming enlargement with ten relatively poor new member states and iii) the problems relating to the dimension of EU budget. Enlargement offers the EU a window of opportunity to accelerate this reform, that can play an important role in accelerating income convergence among European regions. Aim of this paper is to discuss the main options open to the European policy makers concerning the future of structural policies, and the more relevant documents produced till end 2002.