Spillover effects in local public spending

Migali, Giuseppe and Ferraresi, Massimiliano and Rizzo, Leonzio (2018) Spillover effects in local public spending. Regional Studies, 52 (11). pp. 1570-1584. ISSN 0034-3404

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This paper investigated the fiscal interactions between Italian municipalities over the period 2001–11 and found a positive horizontal interdependence in spending decisions. The results are robust to different specifications of the spatial neighbours and are confirmed by a natural experiment (an earthquake in the Abruzzo region of Italy in 2009) that creates an exogenous variation in the neighbours’ spending. Furthermore, there is no evidence of yardstick competition when one considers political effects, while a negative relationship is found between spatial interaction and the size of the municipality. Thus, it can be concluded that spillover effects drive the strategic interactions in spending decisions.

Item Type:
Journal Article
Journal or Publication Title:
Regional Studies
Additional Information:
This is an Accepted Manuscript of an article published by Taylor & Francis in Regional Studies on 17/01/2018, available online: http://www.tandfonline.com/10.1080/00343404.2017.1415429
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Deposited On:
16 Feb 2018 10:30
Last Modified:
03 Dec 2022 00:42