Edited by Edoardo Ongaro, Andrew Massey, Marc Holzer and Ellen Wayenberg
Chapter 20: From Interpersonal to Interregional Redistribution: The Case of Social Policies in Italy
Caterina Ferrario and Alberto Zanardi1 INTRODUCTION The public budget transfers resources among different areas of the same country through policies and programmes specifically designed for that purpose, such as interregional equalization schemes. Territorial redistribution may also be the by-product of tax and benefit measures more generally targeting individuals/households rather than areas, which therefore redistribute on the basis of individual characteristics (income, age, state of health, and so forth). These measures have an interregional redistributive impact to the extent that the population is heterogeneously distributed across territories with regard to the relevant criteria for tax-benefit policies. Income redistribution through the public budget among different areas is of particular significance in countries with pronounced regional differences. This is the case in Italy, where regions differ enormously in terms of surface area, size of population, demographic structure and level of economic activity, with a distinctive North-South disparity. A recent body of literature has developed estimation methods to measure the extent of redistribution across regions brought about by the overall public budget (Sala-i-Martin and Sachs 1992; Italianer and PisaniFerry 1992; Von Hagen 1992; Bayoumi and Masson 1995; Obstfeld and Peri 1998; Decressin 2002; Mélitz and Zumer 2002; Padovano, 2007). This work develops upon the existing results to analyse the interregional redistributive properties of a specific subset of public intervention, that is social policies. These policies are designed to redistribute income among citizens according to their individual characteristics (conditions of needs and/ or insufficient economic means). However, they may have interregional redistributive effects: for...
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