Incentives to local public service provision: An evaluation of Italy's Obiettivi di Servizio

Abstract

Set up by the Italian central government and implemented in the lagging regions, Obiettivi di Servizio is an innovative scheme designed to encourage local authorities to reach given targets for the provision of public services such as education, childcare and elderly care, waste management, and water supply. The paper finds that the programme was only partially successful, with considerable differences across regions and targets. An important driver of effectiveness was local institutional quality. We also find signs of displacement effects: local authorities involved in the programme might have concentrated on the targets to the detriment of other local public services.