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Local Administration Funding and Regional Disparities in Italy Before WW1


Patrizia Battilani


University of Bologna - Department of economics ; University of Bologna - Rimini center for economic analysis

May 13, 2011

Quaderni DSE Working Paper No. 757

Abstract:     
Numerous studies have been made of regional differences in income and level of development in Italy, and these studies basically differ in the responses they give to the question of whether the said differences were already of a substantial nature prior to Unification, or whether in fact they have widened since then.

The present essay is going to examine this problem by focusing on the local administrative system adopted after Italian Unification, in order to ascertain the existence of a different approach to public intervention at the local level, and thus to the existence of disparities in local public spending. The paper offers an analysis of the actual working of the post-Unification administrative system in Italy, in terms both of the powers attributed to Italy’s municipalities and provinces, and of the degree of autonomy they had in deciding on funding methods. This analysis aims to ascertain whether the chosen strategy could have been maintained in a state characterized by strong regional differences, and to establish the kind of impact such a strategy had on the regional differences themselves.

The main conclusion is that in absence of any sort of automatic transfer from the more industrialized regions to the poor ones, the adoption of a decentralized tax system for the financing of local public expenditure contributed to the deepening of regional divide. As a consequence at the beginning of the 19th century the central government started to subsidize the poorest regions and little by little move towards a more centralized fiscal system.

Number of Pages in PDF File: 29

Keywords: Italy, economic history, regional divide, local administration, tax system

JEL Classification: N43

working papers series


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Date posted: June 2, 2011  

Suggested Citation

Battilani, Patrizia, Local Administration Funding and Regional Disparities in Italy Before WW1 (May 13, 2011). Quaderni DSE Working Paper No. 757. Available at SSRN: http://ssrn.com/abstract=1856443 or http://dx.doi.org/10.2139/ssrn.1856443

Contact Information

Patrizia Battilani (Contact Author)
University of Bologna - Department of economics ( email )
piazza Scaravilli 2
Bologna, 40126
Italy
University of Bologna - Rimini center for economic analysis ( email )
Via Patara, 3
Rimini (RN), RN 47900
Italy
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