Partisanship, social capital, and fiscal federalism in the Italian regions

In this paper we analyze the determinants of fiscal performance in the regions of Italy, a country that has taken significant steps towards federalism in the past ten years. We test several hypotheses on the impact of financial autonomy, the electoral cycle, partisanship and social capital on the fiscal performance of sub-national units. We also assess the determinants of transfers from the central government to the regions. We find that lobbying on the part of regional governments increases the amounts of transfers received, as does sharing the same partisan composition as the central government, in particular in proximity of regional elections