Can Local Policies Reduce the Gap between ‘Centers’ and ‘Inner Areas’? The Case of Italian Municipalities’ Expenditure

Abstract

This study analyzes the links between Italian inner area municipalities’ expenditure and per capita incomes, considered as a proxy of well-being. Inner areas are territorial contexts characterized by a significant distance from the centers, the main supply poles of essential services. Following a top-down approach, the paper at first demonstrates the existence of a global convergence process in per capita incomes, with a faster rate of convergence in inner areas with respect to centers; then, attention is focused on local administrations’ policies and their impact on incomes in Italian inner areas. The paper gives a twofold contribution to the debate about the implementation of territorial cohesion policies: (a) on one side, public expenditure data are considered for the first time in an econometric model regarding Italian inner areas; (b) on the other side, the reference territorial subdivision is the lowest possible, giving the opportunity to investigate the changes in well-being at the finest scale.

Keywords

• local public expenditures
• per capita incomes
• Italian inner areas
• spatial error model
• panel regression model