Publications

Abstract:

We investigate whether the presence of fiscal rules might limit the insurgence of a Political Budget Cycle (PBC) in investment spending at municipal level. Data based on the balance sheets of Italian municipalities are explored for the period 1999-2012. In line with some existing studies, we investigate the effect of the Domestic Stability Pact (DSP) and rely on the fact that, since 2001, this tax rule has not been binding for municipalities with under 5,000 inhabitants. Our main contribution consists of exploiting this quasi-experimental setting by means of a difference-in-discontinuities (Diff-in-Disc) estimation strategy in order to obtain unbiased estimates. In comparison with the already existing results, our study makes three observations. First, that the easing of fiscal rules only generates an increase in capital expenditure in the year immediately before elections. Second, that this increase only arises for those investments which produce immediately-visible effects. Finally, the size of the electoral cycle shows a 137 percent increase in these investments which is more than four times larger than that reported in the literature.

Presentations:

• 38th meeting of the European Economic Association (EEA - ESEM), Barcelona School of Economics, Barcelona (Spain), 2023.

• 36th Annual Conference of the European Society for Population Economics (ESPE), Institute of Economics Sciences (IES), Belgrade (Serbia), 2023.

Abstract:

In this paper, we present a novel approach to measure domestic bilateral trade flows in intermediate and final consumption in the Italian regions. We reconstruct regional trade flows in final consumption by using administrative data from tax returns that limit the issues of survey-based measures. We also investigate the main determinants of domestic regional trade flows in Italy by adopting a spatial gravity modeling framework that allows for the inclusion of multiple spatial dependence effects. Moreover, we provide evidence of the presence of geographical heterogeneity and a specific focus on trade flows in the manufacturing sector. Our findings, which are robust to alternative specifications, suggest that the introduction of different sources of spatial dependence is relevant to understand the occurrence of multiple types of network effects when considering origin, destination, and origin–destination linkages in trade flows. We also document regional differences in the spatial concentration of trade flows in intermediate and final consumption. Finally, we discuss the main implications and future avenues of inquiry of our research.

Presentations:

• 43rd Annual Conference of the Italian Association of Regional Science (AISre), Polytechnic University of Milan (Italy), 2022.

• 16th World Conference of the Spatial Econometrics Association (SEA), University of Warsaw (Poland), 2022.

Abstract:

This study analyzes the impact of the gender composition of political institutions on the political budget cycle (PBC) and on the size and structure of public expenditure. An instrumental variable approach is implemented to evaluate the influence of female politicians in municipal councils. The introduction of gender quotas for Italian municipalities is used as an exogenous variation in female participation in politics. The results show that: (i) fluctuations in local public spending are only slightly affected by the presence of a wider female representation; (ii) an increase in the number of elected women reduces the overall amount of public expenditure; (iii) this reduction involves fields typically affected by PBC (e.g., roads' maintenance) except those related to females' needs (e.g., kindergarten, primary education, and social care).

Presentations:

• • 34th Annual Conference of the European Society for Population Economics (ESPE), online, 2021.

  • 60th Annual Conference of the Italian Economic Association (SIE), University of Palermo (Italy), 2019.