Deregulation and Growth in Italy
Government of the Italian Republic (Italy), Ministry of Economy and Finance, Department of the Treasury Working Paper No. 3
30 Pages Posted: 5 Jun 2014 Last revised: 8 Aug 2014
Date Written: july 16, 2014
The aim of this study is to assess the effects of anti-competitive service regulation on economic performance in Italy. This paper runs a cross-sector panel regression of the Italian value added growth on the OECD PMR sectoral regulation indicators (ETCR and RBSR) in the 1995-2008 period using the national Input-Output matrix. This analysis enriches the empirical understanding of the effects of regulation on national value added growth with relevant implications for policy making. The results prove that in Italy sectoral liberalization on total economy and manufacturing played a relevant role in increasing the value added. We find a positive and statistically significant relationship between the overall liberalization of services, as well as in Energy and Professions, and the performance of the whole economy and manufacturing sector in the considered period.
Being Italy among the countries with a significant difference between the regulation (PMR) and the business perception (EFW-DB) indicators, this paper provides a sense of this misalignment in the years of the panel. In particular, evidence shows that economic agents reacted positively to reforms related to state participation (Post, Telecom, Railways) and simplification of paperwork for start-ups in Italy.
Keywords: Regulation, sector analysis, growth
JEL Classification: O40, L51, L80
Suggested Citation: Suggested Citation