All in-text references underlined in blue are linked to publications on ResearchGate, letting you... more All in-text references underlined in blue are linked to publications on ResearchGate, letting you access and read them immediately.
This paper investigates whether the production efficiency of Norwegian local governments exhibits... more This paper investigates whether the production efficiency of Norwegian local governments exhibits a spatial pattern that is compatible with the hypothesis of yardstick competition. In order to check whether yardstick competition is really responsible far the observed spatial pattern, and to rule out alternative theoretical explanations, the paper exploits unique information from a survey on Norwegian local governments, where local public officials are explicitly asked whether they compare their own performances in the provision of public services to those of other governments (benchmarking). Merging the latter information - "declared" yardstick competition - with the observed interdependence in local efficiency measures - "revealed" yardstick competition - the paper provides evidence that comparative performance evaluation generates spatial auto-correlation in local efficiency indicators.
This paper exploits the multi-level structure of progressive personal income taxation in Italy, a... more This paper exploits the multi-level structure of progressive personal income taxation in Italy, and particularly the discontinuity of upper-tier top marginal rates at regional borders, to estimate the response of the share of high income taxpayers to local tax di¤erentials and to analyze the tax rate setting decisions of lower-tier municipal authorities relative to their neighbors. We discuss the properties and data requirements of recently proposed border-discontinuity instrumental variable estimators of spatial reaction functions that use cross-border upper-tier tax policies as instruments for lower-tier ones (Parchet R., Are local tax rates strategic complements or strategic substitutes?American Economic Journal: Economic Policy (2019) forthcoming). Using a large panel dataset of municipal and regional income tax rates spanning through two decades, we nd a positive and signi cant impact of the net-of-tax rate on the share of top income taxpayers that reside in a locality. On t...
We study the impact of exogenous variation in Italian municipal elections' voter turnout rate... more We study the impact of exogenous variation in Italian municipal elections' voter turnout rates on city performance scores and elected mayors'indicators of valence. First, we build a simple model of voluntary and costly expressive voting, where the relative weight of ideology and valence issues over voting costs determines how people vote, and if they actually turn out to vote. We show that the cost of voting depresses voter turnout, yet can raise the chances of selecting higher valence candidates and thereby improve government performance. Empirically, city performance is measured along a number of dimensions including a unique index of overall urban environmental quality, and mayors'valence is proxied by variables refecting their professional experience and competence. The staggered nature of the municipal election schedule allows us to exploit exogenous variation in voter turnout rates through the 2000s due to the presence of concomitant regional, general and European ...
Do citizens engage in comparative performance evaluation across local governments? And if they do... more Do citizens engage in comparative performance evaluation across local governments? And if they do, how can we disentangle this behavior from other forms of strategic interactions among local governments or simple spatial correlation across neighboring jurisdictions? We use spatial econometrics techniques and the institutional characteristics of the Italian system to test if some theoretically derived predictions of yardstick competition theory are supported by data, estimating to this aim both a tax setting and a popularity equation. The results show that local tax rates are positively auto-correlated among neighboring jurisdictions when the mayors run for re-election, while this correlation is absent where either the mayors face a term limit or where they are backed by an overwhelming majority in the local council. Both results are in clear agreement with yardstick theory. On the other hand, the results of the estimation of the popularity equation are less supportive of the theory,...
Two electoral races are defined as concurrent when they are held on the same date. This occurrenc... more Two electoral races are defined as concurrent when they are held on the same date. This occurrence is a typical feature in many democracies. Our paper analyses the effect on voting behaviour of holding more than one election at the same time. We analyze both theoretically and empirically the effects on turnout and on voting behaviour. More specifically we seek empirical validation to the phenomenon of roll-off, and seek understanding on what is voters' behaviour when they rationally decide to validly cast their ballot. We find evidence that when elections are held concurrently, votes are cast according to criteria linked with the most important item in the agenda, so that votes to less important elections stop responding to the corresponding performance indices and react instead to the indices of the most important item on the ballot. This has obvious implication in terms of the use of elections to promote accountability, and on the very decision on whether to hold elections co...
While a vast literature has analysed the wage and employment effects of active labor market progr... more While a vast literature has analysed the wage and employment effects of active labor market programs (ALMPs), a welfare analysis of such programs is seldom implemented (Kluve and Schmidt, 2002). In an attempt to measure the welfare effect of a wage subsidy on youth labor, this paper performs a rudimentary cost-benefit analysis of Italy’s training and employment enhancing program directed at young workers (CFL, Contratti di Formazione e Lavoro). In particular, the analysis highlights the fact that the welfare effect of a targeted wage subsidy – in the form of a payroll tax rebate for firms employing youth labor – crucially depends on whether the labor market is affected by previous fiscal distortions generated either by the absence of linkage between payroll tax revenues and workers’ benefit, or by the presence of a wage floor. Based on reasonable estimates of youth labor demand and labor supply elasticities, it turns out that, in the absence of linkage between payroll tax revenues a...
Based on a unique measure of performance of English local governments in the provision of public ... more Based on a unique measure of performance of English local governments in the provision of public services (Comprehensive Performance Assessment, CPA), this paper uses panel data (2002-2007) to identify the determinants of performance. In particular, by thoroughly exploiting the features of the British system of local government nance and the mandatory nature of decentralized public service provision, this paper aims at investigating the impact of government spending on public service outcomes. Due to the nature of CPA ratings measured on a ve category (poor to excellent) scale the empirical work relies on an ordered response approach allowing for cross-sectional heterogeneity. The empirical evidence suggests that local public expenditures in excess of centrally set spending standards have a detrimental e¤ect on performance. JEL classi cation: C23; C25; H72.
This paper models theoretically and investigates empirically the consequences on local economic p... more This paper models theoretically and investigates empirically the consequences on local economic performance of state mandates on financially distressed authorities. In particular, I analyze the switch from systematic state bailout of regional health care deficits to selectively mandated hikes in regions’ own business income tax rates that took place in Italy around the mid 2000s, and exploit such dramatic switch to identify the impact of tax policy on the economy. I model factor input use within a multi-jurisdiction neoclassical framework, where production takes place in plants, and physical capital requires energy in fixed proportions depending on the size of energy-saving capital that is installed along with physical capital. Energy-saving capital can be interpreted either as tangible information technology (IT) equipment (e.g., computer-aided line speed control devices) or as intangible assets (e.g., process design skills) lowering a plant energy requirement. The estimation resul...
This paper uses panel data on over 200 regions of Europe during the years 2010–2015 to study the ... more This paper uses panel data on over 200 regions of Europe during the years 2010–2015 to study the relationship between the quality of institutions and the capacity of local authorities and stakeholders to effectively protect and support cultural heritage, using new designations in the UNESCO World Heritage List as a proxy. Besides analyzing the spatial distribution of World Heritage sites across European regions, we test whether the location of a region matters for the chances of obtaining a new UNESCO designation by controlling for the stock of World Heritage in the surrounding regions, and whether low regional government quality is an obstacle to inclusion of sites into the List. While we can detect no significant spill-overs from the stock of World Heritage in surrounding regions, we find evidence that local government quality matters for the chances of a region gaining a UNESCO site designation.
All in-text references underlined in blue are linked to publications on ResearchGate, letting you... more All in-text references underlined in blue are linked to publications on ResearchGate, letting you access and read them immediately.
This paper investigates whether the production efficiency of Norwegian local governments exhibits... more This paper investigates whether the production efficiency of Norwegian local governments exhibits a spatial pattern that is compatible with the hypothesis of yardstick competition. In order to check whether yardstick competition is really responsible far the observed spatial pattern, and to rule out alternative theoretical explanations, the paper exploits unique information from a survey on Norwegian local governments, where local public officials are explicitly asked whether they compare their own performances in the provision of public services to those of other governments (benchmarking). Merging the latter information - "declared" yardstick competition - with the observed interdependence in local efficiency measures - "revealed" yardstick competition - the paper provides evidence that comparative performance evaluation generates spatial auto-correlation in local efficiency indicators.
This paper exploits the multi-level structure of progressive personal income taxation in Italy, a... more This paper exploits the multi-level structure of progressive personal income taxation in Italy, and particularly the discontinuity of upper-tier top marginal rates at regional borders, to estimate the response of the share of high income taxpayers to local tax di¤erentials and to analyze the tax rate setting decisions of lower-tier municipal authorities relative to their neighbors. We discuss the properties and data requirements of recently proposed border-discontinuity instrumental variable estimators of spatial reaction functions that use cross-border upper-tier tax policies as instruments for lower-tier ones (Parchet R., Are local tax rates strategic complements or strategic substitutes?American Economic Journal: Economic Policy (2019) forthcoming). Using a large panel dataset of municipal and regional income tax rates spanning through two decades, we nd a positive and signi cant impact of the net-of-tax rate on the share of top income taxpayers that reside in a locality. On t...
We study the impact of exogenous variation in Italian municipal elections' voter turnout rate... more We study the impact of exogenous variation in Italian municipal elections' voter turnout rates on city performance scores and elected mayors'indicators of valence. First, we build a simple model of voluntary and costly expressive voting, where the relative weight of ideology and valence issues over voting costs determines how people vote, and if they actually turn out to vote. We show that the cost of voting depresses voter turnout, yet can raise the chances of selecting higher valence candidates and thereby improve government performance. Empirically, city performance is measured along a number of dimensions including a unique index of overall urban environmental quality, and mayors'valence is proxied by variables refecting their professional experience and competence. The staggered nature of the municipal election schedule allows us to exploit exogenous variation in voter turnout rates through the 2000s due to the presence of concomitant regional, general and European ...
Do citizens engage in comparative performance evaluation across local governments? And if they do... more Do citizens engage in comparative performance evaluation across local governments? And if they do, how can we disentangle this behavior from other forms of strategic interactions among local governments or simple spatial correlation across neighboring jurisdictions? We use spatial econometrics techniques and the institutional characteristics of the Italian system to test if some theoretically derived predictions of yardstick competition theory are supported by data, estimating to this aim both a tax setting and a popularity equation. The results show that local tax rates are positively auto-correlated among neighboring jurisdictions when the mayors run for re-election, while this correlation is absent where either the mayors face a term limit or where they are backed by an overwhelming majority in the local council. Both results are in clear agreement with yardstick theory. On the other hand, the results of the estimation of the popularity equation are less supportive of the theory,...
Two electoral races are defined as concurrent when they are held on the same date. This occurrenc... more Two electoral races are defined as concurrent when they are held on the same date. This occurrence is a typical feature in many democracies. Our paper analyses the effect on voting behaviour of holding more than one election at the same time. We analyze both theoretically and empirically the effects on turnout and on voting behaviour. More specifically we seek empirical validation to the phenomenon of roll-off, and seek understanding on what is voters' behaviour when they rationally decide to validly cast their ballot. We find evidence that when elections are held concurrently, votes are cast according to criteria linked with the most important item in the agenda, so that votes to less important elections stop responding to the corresponding performance indices and react instead to the indices of the most important item on the ballot. This has obvious implication in terms of the use of elections to promote accountability, and on the very decision on whether to hold elections co...
While a vast literature has analysed the wage and employment effects of active labor market progr... more While a vast literature has analysed the wage and employment effects of active labor market programs (ALMPs), a welfare analysis of such programs is seldom implemented (Kluve and Schmidt, 2002). In an attempt to measure the welfare effect of a wage subsidy on youth labor, this paper performs a rudimentary cost-benefit analysis of Italy’s training and employment enhancing program directed at young workers (CFL, Contratti di Formazione e Lavoro). In particular, the analysis highlights the fact that the welfare effect of a targeted wage subsidy – in the form of a payroll tax rebate for firms employing youth labor – crucially depends on whether the labor market is affected by previous fiscal distortions generated either by the absence of linkage between payroll tax revenues and workers’ benefit, or by the presence of a wage floor. Based on reasonable estimates of youth labor demand and labor supply elasticities, it turns out that, in the absence of linkage between payroll tax revenues a...
Based on a unique measure of performance of English local governments in the provision of public ... more Based on a unique measure of performance of English local governments in the provision of public services (Comprehensive Performance Assessment, CPA), this paper uses panel data (2002-2007) to identify the determinants of performance. In particular, by thoroughly exploiting the features of the British system of local government nance and the mandatory nature of decentralized public service provision, this paper aims at investigating the impact of government spending on public service outcomes. Due to the nature of CPA ratings measured on a ve category (poor to excellent) scale the empirical work relies on an ordered response approach allowing for cross-sectional heterogeneity. The empirical evidence suggests that local public expenditures in excess of centrally set spending standards have a detrimental e¤ect on performance. JEL classi cation: C23; C25; H72.
This paper models theoretically and investigates empirically the consequences on local economic p... more This paper models theoretically and investigates empirically the consequences on local economic performance of state mandates on financially distressed authorities. In particular, I analyze the switch from systematic state bailout of regional health care deficits to selectively mandated hikes in regions’ own business income tax rates that took place in Italy around the mid 2000s, and exploit such dramatic switch to identify the impact of tax policy on the economy. I model factor input use within a multi-jurisdiction neoclassical framework, where production takes place in plants, and physical capital requires energy in fixed proportions depending on the size of energy-saving capital that is installed along with physical capital. Energy-saving capital can be interpreted either as tangible information technology (IT) equipment (e.g., computer-aided line speed control devices) or as intangible assets (e.g., process design skills) lowering a plant energy requirement. The estimation resul...
This paper uses panel data on over 200 regions of Europe during the years 2010–2015 to study the ... more This paper uses panel data on over 200 regions of Europe during the years 2010–2015 to study the relationship between the quality of institutions and the capacity of local authorities and stakeholders to effectively protect and support cultural heritage, using new designations in the UNESCO World Heritage List as a proxy. Besides analyzing the spatial distribution of World Heritage sites across European regions, we test whether the location of a region matters for the chances of obtaining a new UNESCO designation by controlling for the stock of World Heritage in the surrounding regions, and whether low regional government quality is an obstacle to inclusion of sites into the List. While we can detect no significant spill-overs from the stock of World Heritage in surrounding regions, we find evidence that local government quality matters for the chances of a region gaining a UNESCO site designation.
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