The unintended composition effect of the subnational government fiscal rules: The case of Italian municipalities

Venturini, Fiorenza

doi:10.1016/j.ejpoleco.2020.101874

Cited by 11 publications

(6 citation statements)

References 35 publications

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“…The lack of significance in the impact of fiscal constraints on overall public investments are also not limited to specific types of rules and can be found for expenditure rules (Carreri & Martínez, 2021;Gregori, 2014;Dahan & Strawczynski, 2013;Vinturis, 2022), balanced budget rule (Grembi et al, 2016;Alpino et al, 2022;Salvi et al, 2020;Venturini, 2020;Dahan & Strawczynski, 2013;Vinturis, 2022), debt rules (de Biase & Dougherty, 2022; Vinturis, 2022) or a specific investment cap which is newly added to an expenditure target and zero deficits (Mancini & Tommasino, 2022). Null effects also extend from national level rules to subnational fiscal frameworks (frequently studied in case of the Domestic Stability Pact for Italian municipalities, e.g., Alpino et al, 2022;Grembi et al, 2016 as well as Daniele et al, 2019).…”

Section: Average Effects Of Fiscal Rules On Public Investmentsmentioning

confidence: 99%

“…On the other hand, findings by Daniele et al (2019), Jürgens (2022), Venturini (2020) and de Biase & Dougherty (2022) suggest that fiscal rules can indeed deteriorate public investment. Daniele et al (2019) and Venturini (2020) examine the relationship on the municipality level in Italy, whereas Jürgens (2022) and de Biase & Dougherty (2022) use cross-country evidence. Daniele et al (2019) show that the Domestic Stability Pact (a BBR with an expenditure target in their period of study) for Italian municipalities significantly decreases overall spending and public investment.…”

Section: Average Effects Of Fiscal Rules On Public Investmentsmentioning

confidence: 99%

“…One study finds a negative correlation between fiscal rules and spending on housing (Jürgens 2022), while another study suggests a decrease in defence spending (Salvi et al 2020). The results for the effect of fiscal rules on infrastructure spending are mixed among the five studies at the subnational level (Coviello et al, 2022;Pavese & Rubolino, 2020;Gregori 2014;Alpino et al, 2022;Venturini, 2020). Two studies, however, find a negative effect on education spending from fiscal rules at the subnational level in Italy (Pavese & Rubolino, 2020 as well as Venturini, 2020), whereas most studies do not find significant effects on education spending resulting from fiscal rules (Carreri & Martínez, 2021;Pavese & Rubolino, 2020;Jürgens 2022).…”

Section: Do Fiscal Rules Have Effects On Specific Investments?mentioning

confidence: 99%

See 2 more Smart Citations

Do Fiscal Rules Undermine Public Investments? A Review of Empirical Evidence

Blesse¹,

Dorn²,

Lay³

2023

Preprint

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Section: Average Effects Of Fiscal Rules On Public Investmentsmentioning

confidence: 99%

Section: Average Effects Of Fiscal Rules On Public Investmentsmentioning

confidence: 99%

Section: Do Fiscal Rules Have Effects On Specific Investments?mentioning

confidence: 99%

See 1 more Smart Citation

Do Fiscal Rules Undermine Public Investments? A Review of Empirical Evidence

Blesse¹,

Dorn²,

Lay³

2023

Preprint

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“…In the Russian Federation [10][11][12][13], there are processes of increasing differences in the level of economic development of subnational territories, causing many social problems. Understanding international economic research in the context of spatial heterogeneity (A. Todes, I. Turok [14], T. Kennedy [15], F. Venturini [16]) allowed us to conclude that it is very important to solve the problems of strengthening the economic systems of municipalities for the formation of economic growth policy for the entire state. Thus, disproportions in the socio-economic development of territories are a global problem, and in order to achieve uniformity of the economic space, any state needs to use tools that affect economic processes.…”

Section: Introductionmentioning

confidence: 99%

Fuzzy Stochastic Automation Model for Decision Support in the Process Inter-Budgetary Regulation

Yakovenko

2020

Mathematics

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The purpose of this article is to study the theoretical foundations of the concept of fiscal decentralization, as the main path of self-development of the national economy of any country, and to develop mathematical tools that support decision-making in the aspect of “hard” budget constraints. The study of the problems of fiscal policy formation in foreign countries presented in modern scientific literature has revealed that the degree of application of the concepts of “soft” and “hard” budget restrictions is an actual topic in the theory of fiscal federalism. It has been substantiated that decision-making within the framework of “soft” budget constraints (financial assistance) leads to low tax autonomy of territories and limited liability of regional and municipal authorities for the results of their financial policy. As a research hypothesis, we put forward the thesis that it is necessary to create conditions for encouraging subnational authorities to support the territorial economy by granting them the possibility to use part of the taxes collected in the respective territories. The implementation of this thesis has given rise to the problem of quantifying decisions made regarding the establishment of standards for the distribution of tax revenues between budgets of different levels of the hierarchy of the country’s budget system. In terms of solving this problem, the author has constructed mathematical models based on the use of synthesis of mathematical apparatus of the theory of stochastic automata, fuzzy algebra, and simulation. In terms of solving this problem, the author proposed the use of mathematical modeling methods. The article presents the results of constructing economic and mathematical models to support decision-making in the vertical distribution of tax revenues between budgets. The models include stochastic automata, as mathematical abstractions, describing the expedient behavior of an economic agent when choosing management alternatives for territories of different levels of economic development. The transition functions of automaton models are formally described on the basis of the synthesis of mathematical apparatus of the theories of stochastic automata operating in random environments and fuzzy sets. The expediency property of the behavior of automaton models is justified by proving the corresponding theorems. The random environment in which stochastic automata are immersed is formed by a simulation model. The article demonstrates the results of experiments carried out on models, as well as a conceptual scheme of interaction between the automaton and simulation models.

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“…The transformation of municipal finances into the basis for "state-population" political exchange leads therefore to the fact that the development strategy of municipalities moves to the sphere of interests of the central government in terms of decentralization, division of power. Ultimately, according to the study carried out by the authors and publications by other analytical scientists, it contributes to a more effective political exchange, stability of the financial system and the country as a whole [14,15]. The data presented in Fig.…”

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confidence: 97%

Transformation of municipal Finance in the context of globalization

2021

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Research background: In the context of globalization, a steady trend towards the formation of “open” economies in the context of the international division of labor, the idea of states defending their national economic interests as the basis for their economic and political independence becomes particularly important. The basis for strengthening the economic base seems to be the formation of sustainable finances at all levels of government, especially at the municipal level, which is directly close to the needs of the population, as well as the active involvement of civil society in ensuring the independent and comprehensive development of territories. Purpose of the article: To study the transformation of municipal finances, turning them into the economic basis of “state-population” political exchange Methods: The research is based on J. Buchanan’s theory of constitutional economics about the “state-population” political exchange as a condition of social development. Findings & Value added: The research conducted by the authors allows them to conclude that due to the constitutional and legal status of the municipality, local government is the level where the real and most effective “state-population” political exchange takes place, acting as a driver of socio-economic transformations. Because of this, municipal finance becomes the economic basis for such an exchange and an indispensable condition for the harmonious sustainable development of territories, which gives special importance to the issues of their formation and evaluation of the effectiveness of public participation in the organization of their functioning.

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The unintended composition effect of the subnational government fiscal rules: The case of Italian municipalities

Cited by 11 publications

References 35 publications

Do Fiscal Rules Undermine Public Investments? A Review of Empirical Evidence

Do Fiscal Rules Undermine Public Investments? A Review of Empirical Evidence

Fuzzy Stochastic Automation Model for Decision Support in the Process Inter-Budgetary Regulation

Transformation of municipal Finance in the context of globalization

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