the italian way to fiscal federalism carlo buratti, university of padua, italy financing devolved...

The Italian Way to Fiscal Federalism

Carlo Buratti, University of Padua, Italy

Financing Devolved Government:The Principles and Practicalities of Reform

Cardiff, 21 January 2011

A caveat

Four months before the dead line set by the delegation law n. 42/2009

the structure of fiscal federalism in Italy is still largely undefined.

Only 3 decrees out of 7 or more decrees necessary to implement the

delegation law have been issued.

Further draft decrees now under examination by Parliament and

Regional and Local Governments raise great discontent.

There is a lack of data on the effects of the reform.

A caveat

Therefore I am forced to deals more with politics then with

economics.

I will try to explain what is really going on, which diverges

somewhat (and sometimes sharply) from official declarations.

It is useful to start from the last decade.

The claim for federalism

Italian Regions differ widely in income, employment, social behaviour,

administrative skills of regional and local governments, efficiency of public

bodies, quality of public services, etc.

For decades the Northern regions have been the locomotive which pulls the train

of slow-growth regions, mainly located in the South of the country.

Tab. 1 shows the fiscal residua of Italian regions in 1996-2002, i.e. the

differences between tax paid by each region and public expenditure in the same

region, net of interest payments on public debt (pure territorial criterion; per

capita data).

6 regions out of 20 have a positive residuum, i.e they pay taxes higher than

public expenditure they receive. The resource transfer is huge.

Tab. 1- Fiscal residua(1996-2002)euros percapita. Tax payments – Expenditures net of interest payments*

PiemonteValle d’AostaLombardiaVenetoTrentino-Alto AdigeFriuli V.G.LiguriaEmilia RomagnaToscanaUmbriaMarcheLazioAbruzzoMoliseCampaniaPugliaBasilicataCalabriaSiciliaSardegna

2.286-3.456 5.095 3.095

-558 311- 862

3.2771.111-602844

-206-616

-2.429-1.575-1.469-2.745-3.191-2.360-2.642

* Based on CPT expenditure data

Ministry of Econ. Dev

Tab. 2 - Fiscal residua. Comparison of 2 estimates(euros percapita).

Different methodologies to impute

revenues and expenditures to

regions give different residua, but

the main results do not change.

Tab. 2 compares two different

approaches: pure territorial criterion

(column 1 and tab. 1) and a mix of

territorial and benfit criteria

(column 2).

Only 1 region (Lazio) shifts from

losers to gainers, following the

application of the percapita

distribution to genaral

administration expenditures.

RegionsTerritorialcriterion

1996-2002

Territorial and benefit

Criteria2004-06


(1)2.286

-3.456 5.095 3.095

-558 311- 862

3.2771.111-602844

-206-616

-2.429-1.575-1.469-2.745-3.191-2.360-2.642

(2)1.370

-3.5954.6012.179

-1.435109

-9142.5161.105

-1.517363

2.470-1.173-3.657-2.376-2.294-3.953-4.079-3.013-2.936

(1) CPT; (2) Staderini, Vadalà (2009)


The Bank of Italy estimates that the transfer of resources towards Southern

Regions amounts to 13% of GDP of the same regions or to 3% of national GDP.

Tables 1 and 2 show per capita data, so they gives no immediate idea of the

size orf the resource transfer betweeen Regions.

Table 3 shows estimates (Ricolfi 2010) of the fiscal residua excluding interests,

pensions (financed by social contributes), military expenditures and sales of

services (data in million euros).

Lombardy contributes to 50% of total transfer to less developed regions. The

share of Lombardy, Veneto and Emilia-Romagna reaches 85%.

Tab. 3 - Fiscal residua(2006) millions euros. Tax payments - net expenditures*


4.708-474

24.8928.759-876

-62-6

7.9942.371-728726

-3.523-1.278

-763-10.840

-6.698-1.335-4.757

-13.876-4235

* Expenditures net of interests, pensions, defence expenditures and sales


The increased economic competition due to globalization is generating

problems even in the most developed Regions. The rate of growth is

declining even in the more developed Northern Regions.

Thus the latter ones claim more resources for themselves both for a

matter of equity and to sustain growth, with a general advantage for

the whole Country.

This is the starting point of the federalizing process in Italy. Further

developments do not meet claims of the Northern regions and are

turning the federalist reform in something else.

The 2001 Constitutional reform – art. 117

The 2001 reform re-writes art. 117 of Constitution, which sets the roles

of the State and Regions. Regions get all the functions not specifically

reserved to the State or shared by State and Regions.

Full implementation of art. 117 Const. will imply a huge devolution of

functions and resources to Regions. ISAE (2004) estimates in 61,000

million Euros, i.e. 5% of GDP, the cost of additional functions to be

devolved to Regions. Further round of devolution has occurred in last

decades.

However art. 117 Const. has not been implemented so far, nor will be

implemented in the next future.


Implementation of the revised version of art. 117 Const. would

imply a large fiscal equalization fund, since most of the

devolved expenditure relies to Southern Regions while

devolvable tax revenues are concentrated in the North.


Art. 116 Cost. confirms the wider functions and the specific financial

arrangements of 5 autonomous Regions and 2 autonomous Provinces, most of

them created by the 1948 Constitution or by a previous Act (Sicily got the

special statute in 1946).

Art. 116-3 allows all other Regions to get more functions reducing the scope for

State policies on their territories. The 2001 Constitution, thus, like the Spanish

Constitution, allows for asymmetric federalism.

Two Regions (Lombardy and Veneto) have submitted to Parliamnet in the last

legislature two bills for getting wider functions and more resources. The same

bills were re-presented in the present legislature. However the bills have not

been discussed in the Parliament. Seemingly, there is no political will to

implement art. 116-3 Const.

AutonomousRegions andProvinces

Valle d’Aosta Trentino - Alto Adige* Friuli - Venezia Giulia Sicilia Sardegna

*split into 2 Autonomous Provinces(Trento and Bolzano)

Puglia

Bolzano


The 2001 constitutional reform radically changed art. 119 which sets the

principles which must inform regions and local governments’ finances.

The re-written art. 119 suppresses all central grants to both Regions and Local

Governments apart from the fiscal equalization fund and specific grants to single

sub-national governments “to prompt economic development, cohesion and

social solidarity, remove social and economic differences, make effective all

personal rights, or to cope with tasks different from normal functions”.

The Constitution warrants the integral financing of “essential” (minimum?) and

“fundamental” levels of service respectively for regions and local governments.

The implementation of art. 119 Cost.

The delegation law 42/2009

Art. 119 is the only part of the 2001 constitutional reform being implemented.

Delegation law 42/2009

Then a number of government decrees have been issued or are being issued to

implement the delegation.

All the decrees must be issued by may 2011, but strong opposition to some parts

of the decrees is slowing down the issueing of the decrees themselves. Also, a

political game is now being played around fiscal federalism, involving the sort of

the Government. Therefore, one cannot easily forecast the final outcome of the

federalist reform (I will discuss this topic later).

The implementation of art. 119 Cost. –

The delegation law 42/2009

Act 42/2009 exacerbates some prescriptions of the constitutional legislator with

unsatisfactory results.

Act 42/2009 extends the label of “essential” services (of regions) and of

“fundamental” services (of local governments) to broadly 80% of their respective

budgets.

Since tax revenues are fully equalized with respect to need both for essential and

fundamental services, the equalization fund will be large and many regional and

local governments will still get a large share of their revenues from State grants

(though their amounts will be defined in a more rational way than now).

Accountability will be reduced by large grants from the fiscal equalization fund.

The implementation of art. 119 Cost. – The delegation law 42/2009

To increase accountability, essential and fundamental services will be fully

financed according to standard costs (for regions) and standard expenditure, i.e.

need (for local governments).

A complex system of measures to drive regional and local governments to

efficiency is drawn by law 42/2009. The central Government sets the levels of

service for all main services, and their standard costs and standard expenditures

and periodically checks the real levels of service and real costs and expenditures

for each sub-national government.

Tough sanctions are introduced to enforce efficiency rules. Sanction are

committed to the administration which do not meet the Internal Stability Pact

targets as well as to the one which do not supply the standard level of essential

services or greatly exceed standard costs or standard expenditure.

The implementation of art. 119 Cost. – The delegation law 42/2009

When the inefficiency are great, sanctions are extended to

administrators who may not be re-elected and appointed in

public bodies.

Inconsistency and paradoxes

The way to fiscal federalism in Italy is a good example of a

bizanthine policy where everything and its opposite cohexist

with no scandal of anybody apart from a few scholars who still

beleive that legislation should have internal consistency.


Paradox n.° 1

After the 2001 constitutional reform the Government policy has consisted in

limiting regional and local governments’ autonomy. Official justification was

“waiting for fiscal federalism….”

Since 2003 (with the exception of 2007 and the first 5 months 2008) the local

and regional surtaxes on personal income tax has been locked (no increase in tax

rates was allowed). Also the increase of rates of the regional tax on business

activities (IRAP) was forbidden since 2003, apart from Regions having Health

Service deficits. Since may 2008 rates of all taxes devolved to municipalities

were locked (apart the tax on refuse collection and disposal).


In 2007 the municipal property tax on houses directly occupied by owners was

gretaly reduced by law by the left wing Parliamentary majority. In 2008 the right

wing Parliamentary majority exempted houses occupied by their owners from the

municipal property tax.

Occasionally, as a matter of industrial and environmental policy the national law

exempts any subject buying a new car from the payment of the “registration tax”

due to Provinces. The provincial budget is restored (later) by State grants.

As a consequence of the quoted policies, fiscal autonomy of Local Governments

(especially Municipalities) fell dramatically. For Municipalities the index of fiscal

autonomy was 50,3% in 2003, only 36,8% in 2008.


The Internal Stability Pact has repeatedly imposed very tight limits to Local

Governments’ expenditures, including limits to specific expenditures (for salaries,

consultancies, travels, etc.)

The Consitutional Court repeatedly condemned the limits imposed to specific

expenditures, but the Government attitude towards Local Government has not

changed.

Also, Regions with large Health Service deficits were forced to rise tax rates to

the top and to implement rationalization plans – In this case, justifiable

measures, as they were necessary to internalize the huge spillovers of some

Regions’ mis-behaviour.


Since turning Italy in a federal (or quasi-federal) State became an

accepted target, the central policy as to Regions and Local

Governments has been to reduce their expenditures (and inefficiency).

This purpose was pursued by reducing autonomy.


Paradox n.° 2

The delegation law n. 42/2009 designes a very solidaristic type of federalism,

which aims to provide the same level of service for all main regional and local

functions all over the country.

The target of equal levels of service in all regions has been repeatedly stated by

both left-wing and right-wing ministers and political leaders

Thus, the federalizing process is expected to produce greater equality in public

services while the present insitutional asset (which reserves wide powers to the

State) failed to get it!!!

Accent on uniformity will prevent gains from institutional competition.


Paradox n° 3

Art. 119 Const. and Act. 42/2009 design a very co-operative federalism,

but art. 116-3 Const. allows for wide differences allowing regions to ask

for a wider set of functions and greater resources.

Two different models of federalism co-exist.

Further paradoxes and inconsistency may be found in the Government

decrees for the implementation of the delegation law.


Inconsistency and paradoxes are partially the result of bargaining between

Government, political parties, regional and local Governments. Bargaining

accompanied the 2001 constitutional reform, the drafting of delegation law

42/2009 and are accompanying the drafting of decrees on fiscal federalism.

The leading financial newspaper “Sole-24 ore” (12 January 2011) commented the

last developments on fiscal federalism as follows:

“In Italy we never do anything serious because we do not want to discontent

anybody. Every good project becomes object of bargaining: we smooth it, we

retouch it, we change it, so that everybody will find in it something he likes; no

matter if the project does not stand any longer… No matter if the mountain

generated a mouce” And concludes: Is it really worthwhile?

The Government decreesImplementation of the delegation law 42/2009

In the following slides I report the contents of Governments

decrees and draft decrees, warning that the latter ones are

changing almost day by day.

Additional Regional tax revenue

All State grants must be suppresed, apart from fiscal equalization grants and specific grants to single regional authorities according to art. 119-5 Const.

The Joint Commssion supporting the Government in the implementation of the delegation law estimates grants to be suppressed in 7.485 million euros including autonomous regions. The figure excludes 5.449 million euros of State grants to the (regional) Health Service and other grants by questionable reasons.

Anyway small figures as compared with total budget 250.000 million euros.

The exact amount of State transfers to be suppressed has not yet been agreed between State and Regions.Thus the amount of additional regional tax revenue (including tax sharing) is still undefined.

Current revenues of 15 “ordinary” Regions - 2008 (Autonomous Regions and Provinces are not considered)

millions of euro and % distribution

Irap (Tax on business)Surtax on Income taxMotor taxesOther own taxes and surtaxesTotal own taxes and surtaxes (1)

Tax sharing of VATOther tax sharing Total tax sharing revenue (2)

Total (1) + (2)

Grants from State, EU, others (for curernt expenditures only)

Sales etc.

34.1846.9985.1711.723

48.076

46.3583.258

49.616

97.692

16.737

2.202

71,1%14,6%10,8%3,6%

100,0%

93,4%6,6%

100,0%

49,2%

50,8%

100,0%

The Government decrees.Regional taxes

The tax system of Regions will not substantially change. Regions

maintain most of the present sources of revenue (though their

structures are modified):

- IRAP (a tax on business);

- A surtax on the personal income tax;

- Revenue sharing of VAT;

- A series of benefit taxes.

Regions lose revenue sharing of the excise on fuel (gasoline)

Regional benefit taxes become optional;

The Government decrees.

Regional taxes

Regions get greater powers on setting rates, deductions and exemptions of the

businsess tax (IRAP);

The surtax on the personal income tax will give a much higher revenue, as it will

substitute for the revenue sharing of the fuel tax and for State grants abolished.

Regions get the power of modifying rates and deductions of the surtax;

Regional shares of VAT are redefined to make them closer to the effective burden

on local consumers.

Substantially a good reform which grants more fiscal autonomy to Regions with

some useless complication.

Regional taxesIRAP (business tax)

Now

Taxable base = salaries, interests on loans etc., profits

Rate = 3, 9% on business activities; higher rate for banks; reduced rate for

agriculture (1,9%); 8,5% on civil servant wages

Regions may vary the standard rate up to +0,92% (No longer after 2008)

Deduction proportional to the number of workers. Further deductions for new

employees.

Regions may decide further deductions for specific business or purposes.

After the reform

Regions may reduce the standard rate to zero to support development. No State

grants to cover the missing revenue.

No rate reduction if surtax on the personal income tax is above 0.5%

Projects to substitute IRAP with other revenues.

Regional taxesSurtax on the Personal income tax

Now Basic rate (compulsory): 0.9% Regions may increase the surtax up to 1.4% Some Regions have introduced progressive surtaxes

After the reform Higher basic rate still to be defined (1.5% or more) Regions may increase the basic surtax rate by 2.1% since 2015 (1.1%

in 2014, 0.5% in 2013). On the first 2 income brackets max + 0,5%. The surtax may be progressive but income brackets are the same of

the State income tax Regions may introduce tax benefits for families and for social services

bought on the market Still far away from the Income Tax of the Spanish Comunidades

Autonomas

The Government decrees.Local Governments’ taxes

Provinces

Provinces get, and will get after the reform, most of their revenue from motor

taxation. The Government decree increases the flexibility of motor taxes.

Provinces will be allowed to change the rate of the tax on car insurance +2.5%,

till now a pure devolution of revenue (fixed rate 12.5%).

Provinces get also a share of the State income tax (instead of the excise on fuel

as in a previosus draft of the decree).

They lose the surtax on the excise on electric energy consumption.

Provinces as well as Regions get more tax flexibility, i.e. a greater power to

define the structures of their revenues.

Current revenues of Provinces (excluded Trento, Bolzano and Provinces of region Fiuli V.G.) - 2008

millions of euro and % distribution

Tax on car insuranceTax on registration of motorvehiclesSurtax on electric energy exciseOther taxesTotal tax revenue

State grantsOther grants (from regions, EU, etc.)Total current grants

Sales, income from real property, profits

Total current revenue

2.0411.184

909712

4.846

1.0213.2274.248

747

9.841

42,1%24,4%18,8%14,7%

100,0%

24,0%76%

100,0%

49,2%

43,2%

7,6%

100,0%

Additional municipal taxes

State grants to be cancelled and subsituted with local taxes and tax sharing.

About 13.000 million euros (municipalities in “ordinary”Regions). Total

municipal budget 75.266 million euros.

Immediate substitution of taxes for grants only for Municipalities located in

“ordinary” Regions. For Autonomous Regions and Provinces negotiated

procedure. Autonomous Regions and Provinces but Sicily and Sardegna are

resposible for local public finance and finance directly their local governments.

Regional grants to municipalities must be suppressed as well. They amount to

6.313 million euros for “ordinary” Regions and to 3.894 million euros for

Autonomous Regions and Provinces as against total budgets equal to

respectively 75.266 and 15.989 million euros. A cospicuous amount but some

regional grants are financed by State grants which are redistributed to Local

Governments by Regions – possible double counting.

Additional municipal taxes

In the following slides I will deal with substitution of State grants only.

Regional grants to Local Governments must be substituted with regional tax sharing and/or new local taxes introduced by regional legislation.

Municipalities (all regions)Municipal current revenues and detail of main tax revenues

2008 - milllion of euros and % values

Property taxSurtax on Income taxTax on refuse collection and disposalSurtax on the excise on electric energyOther taxesTotal Tax revenue

State Grants Regional grantsOther grantsTotal current grants

Sales of public servicesOther own revenuesTotal revenues for sales etc.

Total current revenues

9.7892.7974.728

7072.405

20.426

15.0055.868

83521.708

6.1587.871

14.029

56.163

47,9%13,7%23,1%3,5%

11,8%100,0% 36,4%

38,6%

25,0%

100,0%


Local Governments’ taxesMunicipalities

The draft decree now under examination by the Parliamentary Commission on

Fiscal Federalism deeply reforms municipal finances.

Revenues are mainly based on the taxation of real estates and of house rents.

Municipalities maintain the current property tax on buildings (which exempts

houses occupied by owners) with minor changes and a different name; now rates

between 0.4% and 0.7%. Reduced rates and higher rates for incentives purposes.

Basic rates after reform still unknown, but Municipalities may vary them up to

0,3%

They also get taxes on transactions of real properties (so far State taxes); rates

2%-8%. Municipalities may change the standard rate 8% up to + 2%.


Local Governments’ taxes

They may cancel a number of benefit taxes (first of all the tax for

refuse collection and disposal) and levy a new (optional) tax which

encompasses them.

All the quoted new revenues are formally a unique tax called IMU

(municipal tax).

Municipalities get also a flat rate tax on real incomes from rented

houses which substitute for the State income tax and some minor taxes

on rent contracts. A low rate (20%) should reduce tax evasion on house

rents, which is presently very high.


Paradox n.° 4

While a main target of the on going reform is to increase accountability of local

governments, the proposed tax system of municipalities gets the opposite result.

The property tax exepmts those who live in their own houses (75% of all

citizens). The tax burden is on tax payers which do not vote in the jurisdiction.

The tax on real estate transanctions are paid by citizens once or twice in their

life. Somebody will never pays the tax.

The tax on house rents will be paid by a restricted number of citizens.



The proposed tax system for municipalities yields a very uneven distribution of

income which greatly advantages the main cities and the holiday resorts.

It also gives very unstable revenues in small towns, where real estate

transactions are sporadic.

Inclusion of the charge for refuse collection and disposal in the Unique municipal

tax (IMU) will reduce accountability and contrasts with the environmental policy.

The proposed municipal tax system is presently subject to strong criticism by the

Parliamentary Commission on fiscal federalism. Substitution of IMU with a

Service Tax appliable also to houses occupied by owners has been proposed by

the main left wing party (the Democratic Party).


A first simulation of the effects of the

proposed new taxes on

Municipalities’ revenues shows

wide deviations from present

revenues from State grants

(Source: Sen. M. Stradiotto).

Revenues will be equalized and the

equalization fund will be large.

Municipality

% Deviation from present revenues (grants)

TorinoImperia GenovaFirenzeRomaOlbiaMilanoVeneziaPadovaParmaBolognaL’AquilaPotenzaNapoliPalermoCatanzaro

-9+122

-22+33-10

+180+34+26+76

+105+40-66-56-61-55-46



Pressed by the Municipalities and by political opposition, the Government on

January 18 has submitted to the Parliamentary Commission a new proposal:

Taxes on transactions of real estate remain state revenues. Municipalities get a

share of the same revenue (1,000 million euros)

Municipalities also get a share of the income tax (4,000 euros).

The tax on house rents becomes a State revenue entirely devolved to

Municipalities. Should the revenue be lower than forecast, the Government will

cover the gap.

A solution which improves some features of the draft decree but worsen others.

Tax sharing becomes prevalent and accountability becomes a chimera.

The Government decrees.Standard costs, standard expenditures and

resource equalization

Regions’ “essential” levels of service and local governments’ standard

expenditures (need) have not yet been quantified.

Indeed, what does mean “essential service” has not yet been specified, apart

from health service where they have been roughly set by the Government some

years ago.

A provisional list of local governments’ “fundamental services” has been drawn

by the delegation law.

The implementation of the complex architecture of Act. 42/2009 is encountering

great obstacles. For the time being the Government is focusing on standard costs

and expenditures ignoring “essential” levels of service.

The Government decrees. Regions

Standard costs and resource equalization

A draft decree sets the way to measure standard costs of Regions’ “essential

services”. For each “essential service” standard cost is assumed as the weighted

average of per capita costs in 3 Regions (1 of which must be in the Northern Italy,

1 in Central Italy, 1 in the South; moreover 1 Region must be a small one). The 3

Regions are selected by the Conference of Regions (a co-ordination body) out of

5 Regions which meet some specific efficiency criteria.

The conditions set by the draft decree are inefficient since they can define an

empty set.

The Government proposed considering the 3 most effcient Regions. Regions

prefer to expand the number of reference Regions and to introduce conditions

which lowers the target.



The lower the target the easier is to get it for inefficient Governments

and the greater the financial premium for the most efficient ones.

Regions will get resources which equal standard costs of “essential

services”. Thus, if the standard is set as the average of the 3 most

efficient regions, only 1 (Lombardy) will get more resources than now.

All other ones lose resources. Benefits of cost cuts accrue to the

Treasury.

Thus the real Government target is to spoil Regions of “excessive”

reosurces, not to redistribute resources from inefficient governments to

efficient ones; i.e. fiscal federalism is a way to carry on the last decade

policy as to sub-national governments.



Regions are bargaining to get softer targets. This is in the interest of

both the rich northern regions (generally efficient ones) and of the poor

southern regions (generally inefficient ones).

*

According to the delegation law, resource equalization for “non-

essential services” means pure fiscal capacity equalization plus a

corrective factor to take account of small dimensions.

This point has not yet been tackled by Government decrees.

The Government decrees

Local Governments Standard expenditures and resource equalization

The delegation law sets a criterion for resource equalization for

fundamental services which much resembles international experiences.

The equalization fund fills the gap between need (estimated with the

usual statistical tools) and standard revenue. The equalization fund is

financed by Local governments having standard revenues above need

(a pure redistribution between “rich” and “poor” administrations).

A very lose interpretation of the delegation by the Government has lead

to a different and innovative way of estimating need, based on cluster

analysis – a methodology used by the financial administration to

estimate “normal” incomes for small business and professionals.



Estimated need will take account of the usual socio-economic,

territorial, demographic and economic factors, but also of other factors

(number of employees, quality of services, efficiency and effectiveness

in the supplying of public services) which will reduce deviations of real

expenditures from estimated need.

Every 3 years estimated need for 1/3 of total expenditure are re-

estimated in such a way that estimates become closer and closer to

efficient expenditure for all fundamental services (in a non-specified

number of years).



This methodology has some shortcomings:

Yardstick competition is not allowed (there is no common target for

Local Governments);

There is no guarantee that surpluses of standard revenues over

need in the “rich” Regions will equal deficits in the “poor” regions;

Since Local Governments receive an amount of resources equal to

need, the closer estimated need is to the efficiency expenditure the

more the Central Government gains from efficiency increases.



Thus, while the delegation law leads to a redistribution of

resources within Local Authorities, the Government decree

shifts resources from Local Governments to Central

Government.

A good reform?

The judgment on the reform is straightforward if the following points are considered.

Fiscal autonomy is somewhat increased, but

The overall autonomy of Regions and, above all, Local Governments will be

subject to severe constraints

Accountability do not rely on a wide fiscal autonomy, maximum transparency of

the local fiscal system, a no bail out clause and control by the citizens/electors

Accountability relies upon a set of (severe) sanctions and (small) prizes

Gains from reducing present costs to standard costs will accrue to Central

Government! Regions and Local Governments will get tiny benefits from their

efforts to increase efficiency.

A good reform? The main target of the reform is to reduce inefficiency and the level of

expenditure of both Regions and Local Governments in order to reduce

pressure on the central budget.

Many rules introduced by Act. 42/2009 and by the Government decrees

would fit well in a decetralization context. They are less coherent with a

federalist structure of the State.

The reform does not meet the claims of the more developed Northern

Regions. They expect from federalism a greater share of the tax yield

and greater powers to manage public functions. Neither target is

achieved.

The Italian Way to Fiscal Federalism

Thanks for your attention

the italian way to fiscal federalism carlo buratti, university of padua, italy financing devolved...

Documents

growth regions

developed regions

southern regions

regions territorial

federalism italian regions

developed northern regions

sales slide

dev slide