Raffaella Santolini

Local Expenditure Interaction in Italian Municipalities: Do Local Council Partnerships Make a Difference?

Abstract This paper investigates interdependence among local councils in Italy in their public spending and distinguishes between possible sources of this interdependence. We find significant positive interaction among neighbouring local councils in regard to both spending at the level of total expenditure and spending on different sub-categories. Attempts to identify the source of this horizontal interaction seem to reject the yardstick competition hypothesis. Addressing the role that local council partnerships may play in internalising fiscal externalities, we suggest that expenditure interaction may be driven by spill-over.

Does Globalization Matter on Fiscal Decentralization? New Evidence from the OECD

Abstract In this paper, we re-examine the effects of globalization on fiscal decentralization of Organisation for Economic Co-operation and Development (OECD) member countries by using the overall KOF index of globalization and its main subcomponents — economic, political and social integration. Using different indicators of fiscal decentralization, we find a positive impact of the overall index of globalization on both tax revenue and expenditure decentralization side, although not robust across different panel data specifications. Focusing on the links between decentralization and subcomponents of globalization, we find that both economic and social integration foster fiscal decentralization, whereas political integration inhibits its growth.

Environmental protection, land-use regulation and local government taxation: theory and evidence on Italian municipalities

Property taxation can be used in a Pigouvian way to raise the costs of environment and decrease land use consumption for the benefit of enviromental protection. However, in presence of a growing shortage of funding over time, local governments can use property taxation in order to ‘fill the coffers’ rather than to pursue enviromenal safeguard. A negative effect on the budget side could be associated with a weeker control on land use regulation from local governments, since higher enviromental consumption leads to higher tax revenues. In this paper we address this issue developing a theoretical model which shows a positive (negative) relationship between tax revenue and the number of land use permissions when there is complementariety (substitutability) between environmental and human uses of land. We test this relationship on a panel of Italian municipalities from 1999 to 2006. Our results show a positive and significant correlation between property tax revenue and the issuance of land use permits, suggesting the prevalence of the complementariety relationship. This result implies that Italian municipalities are more concerned about funds raising rather than environment preservation.

Urban sprawl and property tax of a city’s core and suburbs: evidence from Italy

ABSTRACT Urban sprawl and property tax of a city’s core and suburbs: evidence from Italy. Regional Studies. A city’s core and suburban property tax differentials can affect sprawl within an urban area. This paper empirically addresses this issue by analyzing the pattern of density growth of 72 Italian functional urbanized areas. Results show that the density of an urban area declines in response to an increase in the city’s core property tax rate. This effect is due to changes in dwelling size. By contrast, the density of an urban area significantly rises when suburban property tax rates increase, making the urban area more compact. This effect is attributable to changes in the improvement effect of property taxation.

ELECTORAL RULES AND PUBLIC SPENDING COMPOSITION: THE CASE OF ITALIAN REGIONS

This study investigates the effects produced by the electoral system on expenditure composition by exploring the case of Italian regions over the period 1986–2009. Empirical analysis shows that the regional current transfers expenditure distributed to families and firms significantly decreases when the regional electoral system moves from being proportional to mixed. Particularly striking is the reduction in preelectoral years under the regional mixed regime. (JEL D72, H30, H72)