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Public Spending in Italy: Policies to Enhance Its Effectiveness

Author

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  • Alexandra Bibbee
  • Alessandro Goglio

Abstract

This paper aims to identify structural reforms for better public spending management in Italy –in turn a critical need in view of the country's high debt and tax burdens, notwithstanding significant progress in the past decade. The analysis proceeds on two distinct levels. At the central government level, a misallocation of public resources is suggested by excessive pension spending against inadequate spending in infrastructure, labour market and human capital areas, as well as by high and inefficient government employment. These problems can be traced in large part to the incentive structures built into the public institutions charged with the planning, implementation, and control of spending policies. The main recommended policy actions are to pursue further pension reform while strengthening other income transfers, make the budget process more transparent and accountable, undertake deeper reform of the public administration, and to make greater use of market instruments in areas ... Les dépenses publiques en Italie : Mesures pour renforcer leur efficacité L’objet de ce document est d’identifier les réformes structurelles de nature à améliorer la gestion des dépenses publiques en Italie – amélioration essentielle en raison de l'ampleur de la dette et du poids de la charge fiscale du pays, malgré les sensibles progrès réalisés au cours de la dernière décennie. L'analyse se situe à deux niveaux. Au niveau de l'administration centrale, l'affectation des ressources publiques laisse à désirer, comme en témoignent les dépenses excessives au titre des pensions comparativement à l'insuffisance des dépenses consacrées aux infrastructures, au marché du travail et à la formation du capital humain, ainsi que l'ampleur et l'inefficience des effectifs du secteur public. Ces problèmes résultent pour une large part de la structure des incitations inhérentes aux institutions publiques chargées de la planification, de la mise en oeuvre et du contrôle des politiques en matière de dépenses. Les principales mesures recommandées visent à poursuivre la réforme des pensions tout en renforçant les autres transferts de revenu, améliorer la transparence du processus budgétaire, entreprendre une réforme en profondeur de l'administration de l'Etat, et faire plus largement appel aux mécanismes du marché, par exemple dans le domaine des investissements publics. Au niveau des administrations locales, un fédéralisme budgétaire caractérisé par une décentralisation insuffisante des responsabilités en matière de dépenses et de financement a fait naître des incitations perverses. Il en est résulté un manque d'efficience, notamment dans le secteur de la santé où les dépenses ont très fortement augmenté ces dernières années. La principale action recommandée est la réalisation d'une profonde réforme du système de soins, fondée sur un durcissement des contraintes budgétaires et l'octroi aux régions d'une plus grande autonomie sur le plan des dépenses.

Suggested Citation

  • Alexandra Bibbee & Alessandro Goglio, 2002. "Public Spending in Italy: Policies to Enhance Its Effectiveness," OECD Economics Department Working Papers 324, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:324-en
    DOI: 10.1787/028561670507
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    Citations

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    Cited by:

    1. Julia Darby & Anton Muscatelli & Graeme Roy, 2002. "Fiscal federalism and Fiscal Autonomy: Lessons for the UK from other Industrialised Countries," Working Papers 2002_12, Business School - Economics, University of Glasgow.
    2. Lkhagvadorj, Ariunaa, 2010. "Fiscal Federalism and Decentralization in Mongolia," MPRA Paper 28758, University Library of Munich, Germany, revised Mar 2010.
    3. Cellini, Roberto & Prezzavento, Luca C, 2016. "Interest payment on government debt and public spending in Italy: An empirical analysis," MPRA Paper 78066, University Library of Munich, Germany, revised 31 Mar 2017.

    More about this item

    Keywords

    dépenses publiques; gouvernement local; government expenditure; health; Italie; Italy; local government; programmes sociaux; public economics; santé; structure and scope of government; structure et compétences du gouvernement; welfare programmes; économies publiques;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H74 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Borrowing
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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