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Additionality and regional public finance – Evidence from Italy

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  • Chiara F Del Bo
  • Emanuela Sirtori

Abstract

To what extent do EU Structural Funds complement or substitute domestic public funds? The intended and unintended effects of the transfer of additional funds on recipients' domestic public expenditure structures are considered and their existence is empirically evaluated. After reviewing the literature on the complementarity, substitutability and displacement effects of additional funds on national and regional public expenditures, we empirically assess these effects in relation to EU funds in Italy. The empirical analysis is based on data on the allocation of EU Structural Funds from 1996 to 2010 with a regional and thematic breakdown and on the Italian Regional Public Accounts. The aim is to develop a useful framework, which can aid in effectively assessing to what extent Structural Funds, or other supranational funds, complement domestic public investments. In light of empirical results, the current verification mechanism in force in the EU is examined, stressing potential weaknesses and proposing possible solutions.

Suggested Citation

  • Chiara F Del Bo & Emanuela Sirtori, 2016. "Additionality and regional public finance – Evidence from Italy," Environment and Planning C, , vol. 34(5), pages 855-878, August.
    • Handle: RePEc:sae:envirc:v:34:y:2016:i:5:p:855-878
    DOI: 10.1177/0263774X15614682
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    2. Ugo Fratesi & Fiona G. Wishlade, 2017. "The impact of European Cohesion Policy in different contexts," Regional Studies, Taylor & Francis Journals, vol. 51(6), pages 817-821, June.
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    4. Gianluigi Coppola & Sergio Destefanis & Giorgia Marinuzzi & Walter Tortorella, 2021. "Regional policies and sectoral outputs in the Italian regions. A multi-input multi-output counterfactual approach," Discussion Paper series in Regional Science & Economic Geography 2021-08, Gran Sasso Science Institute, Social Sciences, revised May 2021.

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