arbiter
JournalsAccount

Does fiscal autonomy increase local income? Evidence from Italy

Massimiliano Ferraresi et al.

European Journal of Political Economy2026https://doi.org/10.1016/j.ejpoleco.2026.102816article
AJG 2ABDC A
Weight
0.50

Abstract

Can fiscal autonomy affect per capita income levels? We empirically investigate the impact of fiscal autonomy on per capita income through the proper use of local financial resources. Exploiting a natural experiment in Italy, we compare municipalities in the Autonomous Provinces of Trento and Bolzano, which retain and manage almost all their tax revenues, with neighbouring municipalities in Lombardy and Veneto, where only a small fraction of revenues is autonomously managed. Using a spatial fuzzy regression discontinuity design, we estimate the effect of financial fiscal autonomy on per capita income. We address the potential endogeneity of financial fiscal autonomy with a dummy variable identifying municipalities that manage almost all their tax revenues. Our findings show that higher levels of local financial fiscal autonomy increase per capita income: a one percentage point rise in the financial fiscal autonomy raises per capita income by 0.2–0.7%. This effect is largely driven by higher municipal-level administrative quality in municipalities with stronger fiscal autonomy. The results highlight that granting fiscal autonomy can enhance local economic performance.

Open via your library →

Cite this paper

https://doi.org/https://doi.org/10.1016/j.ejpoleco.2026.102816

Or copy a formatted citation

@article{massimiliano2026,
  title        = {{Does fiscal autonomy increase local income? Evidence from Italy}},
  author       = {Massimiliano Ferraresi et al.},
  journal      = {European Journal of Political Economy},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.ejpoleco.2026.102816},
}

Paste directly into BibTeX, Zotero, or your reference manager.

Flag this paper

Does fiscal autonomy increase local income? Evidence from Italy

Flags are reviewed by the Arbiter methodology team within 5 business days.

Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.