Buratti C. (2001).

I fabbisogni di spesa degli enti locali. Le stime effettuate dal Ministero dell’Interno in applicazione delle legge n. 133/1999. Economia pubblica, n. 6, pp. 5-32.

Abstract:

Act n. 133/1999 delegated the Government to reform the system of grants to Local Governments. A Governmental Commission has been working in Rome in the late months of 1999 to produce an appropriation formula which met the requirements of the delegation Act. Among other things, the Commission produced estimates of Local Governments’ needs based on data of all Municipalities and Provinces but those of the three Regions having special autonomy statutes and direct responsibility for Local Finances. Needs were estimated by multiple regression technique separately for Municipalities and Provinces, for both basic services («servizi indispensabili») and the overall bundle of services. Regressors were a bundle of demographic, socio-economic and territorial variables thought to influence need. Results were analysed for a sample of 515 Municipalities and all Provinces and show large residuals for a high number of Governments which might make difficult to implement the grant reform without additional resources; e.g. Campania and Basilicata have a large proportion of Municipalities with standard expenditure below actual expenditure. The paper addresses attention to a number of technical points, as the circularity problem which is often deemed to negatively affect estimates, and distortions generated by specific grants, later consolidated in general grants, which benefited Local Governments within certain areas. The paper also thoroughly analyses per capita expenditure for basic services, basic and widespread services and all services, questioning the opportunity of basing the equalisation process on basic services only.