Working Paper
Who do you Blame in Local Finance? An Analysis of Municipal Financing in Italy
Massimo Bordignon, Santino Piazza
CESifo, Munich, 2010
CESifo Working Paper No. 3100
CESifo, Munich, 2010
CESifo Working Paper No. 3100
A 1999 reform allowed Italian Mayors to partially substitute a more accountable source of tax revenue (the property tax) with a less transparent one (a surcharge on the personal income tax). Theoretical analysis suggests this should give incompetent Mayors a less costly way to hide themselves, so allowing them to be more easily re-elected. An empirical analysis on Piedmont municipalities confirms these hypotheses.
CESifo Category
Public Finance
Public Finance
Keywords: partial decentralization, fiscal federalism, transparency, political behavior
JEL Classification: D780,H710,H770