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Net fiscal flows and interregional redistribution in Italy: a long run perspective (1951-2010)

Giannola, Adriano and Scalera, Domenico and Petraglia, Carmelo (2014): Net fiscal flows and interregional redistribution in Italy: a long run perspective (1951-2010).

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Abstract

This paper carries out a long-run reconstruction of the pattern of interregional redistribution in Italy operated through fiscal imbalances. In particular, by resorting to different sources, a discontinuous time series of Net Fiscal Flows for Italian regions and macro-regions from 1951 to 2010 is built up. The evidence collected is the basis to put forward both an assessment on the intensity and adequacy of redistribution, and an evaluation of the actual relationship between the deepening of Southern fiscal imbalance and the implementation of regional policies. On the first point, the main result of the paper is that, although the amount of resources transferred to Southern Italy from the rest of the country has been significant and increasing over time (at least up to the end of the 1990s), redistribution cannot be judged disproportionately large, in the light of income differences among regions, the public commitment in regional policies and the constitutional principles of equal access of citizens to the basic public services. Secondly, the analysis of data and the inspection of facts indicate that the relationship between the intensity of interregional redistribution and the effort of regional policies is definitely weak. This supports the view that increasing NFFs have little served the purpose of regional convergence; rather, the rise of imbalances seems to be mainly connected to the overall escalation of public expenditure, following the institutional break occurred in mid-1970s with the establishment of Regional Governments.

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