Fiscal Rules and Public Spending: Evidence from Italian Municipalities

Gregori, Wildmer Daniel (2014) Fiscal Rules and Public Spending: Evidence from Italian Municipalities. Bologna: Dipartimento di Scienze economiche DSE, p. 32. DOI 10.6092/unibo/amsacta/3948. In: Quaderni - Working Paper DSE (923). ISSN 2282-6483.
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Abstract

The aim of this paper is to investigate the extent to which local budget spending composition reacts to fiscal rules variations. I consider the budget of Italian municipalities and exploit specific changes in the Domestic Stability Pact’s rules, to perform a difference-in-discontinuities analysis. The results show that not all rules are equally effective: imposing a cap on the total amount of consumption and investment is not as binding as two caps, one specific for consumption and a different one for investment spending. More specifically, the consumption variation is triggered by changes in the level of wages and services spending, while investment relies on infrastructure movements. In addition, there is evidence that when an increase in investment is achieved, there is also a higher budget deficit level.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Gregori, Wildmer Daniel
Keywords
Fiscal rules, Difference-in-discontinuities, Public spending, Consumption, Investment, Deficit, Italian Municipalities
Subjects
ISSN
2282-6483
DOI
Deposit date
07 Feb 2014 09:07
Last modified
19 Feb 2014 08:57
URI

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