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On the optimal size of local jurisdictions: new evidence from Italian provinces

Author

Listed:
  • Guglielmo Barone

    (Bank of Italy)

Abstract
This paper examines the creation of some new provinces in Italy in the 1990s to assess whether the reduction in the size of the local jurisdiction led to benefits in terms of local development, human capital and road quality, which are three public goods provided by the Italian provinces in tandem with other levels of government. By employing a difference-in-differences empirical strategy, and comparing the municipalities belonging to the new provinces (treatments) with other comparable municipalities (controls), I show that the reduction of the size of a province did not generate any benefits in terms of the outcome variables. This result is robust to a number of checks, including the definition of treatment and different functional specifications.

Suggested Citation

  • Guglielmo Barone, 2011. "On the optimal size of local jurisdictions: new evidence from Italian provinces," Temi di discussione (Economic working papers) 823, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:wptemi:td_823_11
    as

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    File URL: http://www.bancaditalia.it/pubblicazioni/temi-discussione/2011/2011-0823/tema_823.pdf
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    local government; difference-in-differences;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures

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