On the Unintended Effects of Public Transfers: Evidence from EU Funding to Southern Italy

37 Pages Posted: 12 Jul 2018

Date Written: June 15, 2018

Abstract

We study the relationship between the accrual of large financial transfers from a central level of government and the incidence of white collar crimes against public administration and public faith at the local level. We analyse the case of EU funding to Southern Italy and make use of within-municipality variation in the flow of funds between 2007 and 2014. We find a statistically significant effect of transfers on white collar crimes: our estimates suggest that in the absence of EU funding disbursements, the annual number of white collar crimes in Southern Italy would have been 4 per cent lower. We acknowledge that the evidence we provide cannot be taken as fully conclusive given the possible simultaneity of criminal activities and funding assignments and disbursements. Nevertheless, we provide evidence that the correlations we estimated between transfers and white collar crimes are unlikely to be spurious or due to confounding effects.

Keywords: regional transfers, white collar crimes, EU funds

JEL Classification: D7, H3, H7

Suggested Citation

De Angelis, Ilaria and de Blasio, Guido and Rizzica, Lucia, On the Unintended Effects of Public Transfers: Evidence from EU Funding to Southern Italy (June 15, 2018). Bank of Italy Temi di Discussione (Working Paper) No. 1180. Available at SSRN: https://ssrn.com/abstract=3210783 or http://dx.doi.org/10.2139/ssrn.3210783

Ilaria De Angelis

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Guido De Blasio

Bank of Italy ( email )

Via Nazionale 91
00184 Roma
Italy

Lucia Rizzica (Contact Author)

Bank of Italy ( email )

Via Milano, 64
00184 Rome
Italy

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