Decentralization and Duration of Public Projects in Italy

This paper investigates whether the speed of public spending varies with the level of government and geographic macro-area in Italy. The empirical analysis considered a large sample of 415,378 public projects managed by different levels of government and co-funded by European funds within the 2007-2013 programming period. The duration of the projects was used as an inverse proxy for the speed of spending. The results vary by macro-area and types of projects: in the North and Centre, central government had a higher speed of spending for projects on education, culture and tourism, and research and innovation. Local governments were faster in the domains of environment and digital agenda. In the South, local governments generally had a slower speed of spending than central government. These results suggests that decentralization reduced the speed of spending in the South, but had a mixed impact in other areas of the country. The quality of local institutions increased the speed of public spending in all macro-areas and in almost all types of projects.