Munich Personal RePEc Archive

Local or national environmental spending in Italy: a stochastic frontier analysis

Auci, Sabrina and Castelli, Annalisa and Vignani, Donatella (2011): Local or national environmental spending in Italy: a stochastic frontier analysis.

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Abstract

The design of environmental spending at the national or local level stands on the concept of subsidiarity and on the theory of fiscal federalism. The main question is, so forth, studying when centralization of a public economic function, such as the protection of the environment, is welfare improving. Using the stochastic frontier approach (SFA) on a panel of Italian regional data, this paper tries to test this issue, highlighting contrasting results. It seems in fact that, if Italy changes its administrative structure from a centralized to a decentralized government, and gives to local levels more autonomy in choosing how to spend public money, it is not certain if regional economic performance can improve.

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