Other publications
Journal publications
Delays in Public Investment Projects
International Economics, 172: 297-310, 2022, with R. Espinoza
The returns from public investment, especially during periods of scaling up, are often lower than expected. To understand the mechanisms behind this regularity we exploit original information on investment projects obtained from World Bank project reports to document the extent and the drivers of time delays in project implementation. We find that almost 60 percent of investment projects are delayed by at least one year. Time overruns are common across sectors and countries. A sound planning and preparation matter for the timing of project execution. Country characteristics also play a role, as projects undertaken in countries with weaker institutions and in periods of public investment scaling up are completed with longer delays.Trends and Challenges in Infrastructure Investment in Developing Countries
International Development Policy, 10(1): 1-30, with D. Gurara, N. Mwase and V. Klyuev.
This paper examines trends in infrastructure investment and financing in low-income developing countries (LIDCs). Following an acceleration of public investment over the last 15 years, the stock of infrastructure assets increased in LIDCs, even though large gaps remain compared to emerging markets. Infrastructure in LIDCs is largely provided by the public sector; private participation is mostly channelled through Public-Private Partnerships. Grants and concessional loans are an essential source of infrastructure funding in LIDCs, while the complementary role of bank lending is still limited to a few countries. Bridging infrastructure gaps would require a broad set of actions to improve the efficiency of public spending, mobilise domestic resources and support from development partners, and crowding in private investment.Economic Notes, 45(3): 445-472, 2016, with R. Rabellotti.
Due to deregulation and financial liberalization, Latin America countries have recently undertaken bank restructuring and consolidation processes. This paper investigates firm access to credit in the region, focusing on the role of the credit market structure. Through an empirical investigation based on the World Bank Enterprise Survey, we find that access to bank credit is very heterogeneous. On average, smaller and less productive firms are less likely to apply for credit and more likely to be financially constrained. Besides, a high degree of bank penetration and competition is significantly correlated with a lower probability that borrowers are financially constrained. Finally, foreign banks penetration has a negative effect on access to credit particularly in less developed and more concentrated markets, while it has a positive influence in more competitive and financially developed markets.Sovereign bonds by developing countries: drivers of issuance and spreads
Review of Development Finance, 6(1): 1-15, 2015, with D. Ghura, L. Njie and O. Adedeji.
In the last decade there has been a new wave of sovereign bond issuances in Africa. What determines the ability of developing countries to issue bonds in international capital and what explains the spreads on these bonds? This paper examines these questions using a dataset that includes 105 developing countries during the period 1995‑2014. We find that a country is more likely to issue a bond when, in comparison with non-issuing peers, it is larger in economic size, has higher per capita GDP, a lower public debt, and a more effective government. Spreads on sovereign bonds are lower for countries with strong external and fiscal positions, as well as robust economic growth and government effectiveness. We also find that primary spreads for the average Sub-Saharan African issuer are higher than in other regions. With regard to global factors, our results confirm the existing evidence that issuances are more likely during periods of global liquidity and high commodity prices, especially for Sub-Saharan African countries, and spreads are higher in periods of higher market volatility.Is labor flexibility a substitute to offshoring? Evidence from Italian manufacturing
International Economics, 142: 81-93, 2015, with M. Richiardi and A. Amighini.
We test whether labor flexibility acts as a substitute to delocalization. Using Italian survey data, we show that a higher share of temporary workers appears to reduce the likelihood of future offshoring. However, once reverse causality and spurious correlation are controlled for with IV techniques, the relationship vanishes. This finding suggests that the threat of delocalization to win support for further labor market reforms is probably misplaced.Domestic public debt in low-income countries: trends and structure
Review of Development Finance, 4(1): 1-19, 2014, with G. Bua and J. Pradelli.
This paper introduces a new dataset on the stock and structure of domestic debt in 36 Low-Income Countries over the period 1971-2011. We characterize the recent trends regarding LICs domestic public debt and explore the relevance of different arguments put forward on the benefits and costs of government borrowing in local public debt markets. The main stylized fact emerging from the data is the increase in domestic government debt since 1996. We also observe that poor countries have been able to increase the share of long-term instruments over time and that the maturity lengthening went together with a decrease in borrowing costs. However, the concentration of the investor base, mainly dominated by commercial banks and the Central Bank, may crowd out lending to the private sector.Saving Strategies: Evidence from Bangladesh
Rivista Italiana degli Economisti - The Journal of the Italian Economic Association, XVIII(3): 319-344, 2013, with M. Marinangeli.
Microsavings contribute to smooth consumption, cope with emergencies and increase the welfare of poor households. We use data from an original survey administered to a sample of Bangladeshi women, all members of a small microfinance institution (MFI), to analyze the individual socio-economic characteristics associated with microsavings. The data show that the poor are financially sophisticated and use several different (formal and informal) savings devices. We also highlight a positive association between the length of the relationship with the MFI and the propensity to save, especially with formal and semi-formal devices. While we cannot identify a causal effect of MFI membership, the descriptive evidence is consistent with the hypothesis that microfinance may contribute to the awareness of the potential benefits of savings and expand access to alternative formal savings devices.Determinants of international migrations to Italian provinces
Economics Bulletin, 32(2): 1604-1617, 2012, with Gabriele Morettini and Massimo Tamberi.
International migration flows constitute one of the most policy-relevant elements of modern economies. The Italian experience is a case of particular interest given the rapid growth of immigration flows, the large number of countries of origin involved, and regional economic heterogeneity. This paper analyses the bilateral stocks of migrants coming from 142 countries and living in 103 Italian provinces to ascertain what characteristics of home countries and destination provinces are associated with international migrations. The results of the estimation of a gravity model on the stock of migrants show that economic, demographic and institutional variables are correlated with migration patterns. In light of the recent Arab Spring, it is interesting to note that migrants come to Italy predominantly from geographically close, democratic and middle-income countries.Domestic Debt in Low-Income Countries
Economics Bulletin, 32(2): 1099-1112, 2012
The potential consequences of the development of domestic debt markets in Low-Income Countries (LICs) are extremely relevant for policy-makers and international financial institutions, especially in light of a scaling-up of public investment in infrastructures. This paper introduces a new dataset on the stock of domestic debt in LICs over the period 1970-2010. With respect to the existing dataset, this one expands the country and time coverage, devotes a careful attention to the problem of the zeros and addresses some inconsistencies between the existing datasets. The descriptive analysis of the evolution of domestic debt in LICs, especially over the last two decades, points out some interesting patterns. The reliance on internal financing has partially offset the reduction in external debt granted by bilateral and multilateral debt relief initiatives. Domestic debt increased at a lower and less volatile pace in countries with better policies and institutions. This pattern is mirrored by a greater capital accumulation, a faster financial development, and a stronger output growth. This descriptive evidence supports the hypothesis that the development of the domestic debt market can bring benefits only in presence of a stable macroeconomic environment, lack of political uncertainty and a developed financial system.Individual Earnings, International Outsourcing and Technological Change. Evidence from Italy
International Economic Journal, 25(1): 29-46, 2011, with C. Broccolini, A. Lo Turco and S. Staffolani
The aim of this paper is to empirically evaluate the relative effects of international outsourcing of materials and services and of ICT capital deepening on wage inequality between blue and white collars in the Italian manufacturing industry during the period 1985-1999. We merge an administrative data set on workers' wages and individual characteristics with data on imported inputs from Italian input-output tables and other sector-level variables. Our results confirm that both material and service outsourcing widen the skilled/unskilled wage gap while ICT capital deepening positively affects real wages regardless of the worker's status. However, important differences emerge when the overall sample is split between traditional and innovative sectors.The 2008-2009 Financial Crisis and the HIPCs: Another Debt Crisis?
Rivista Bancaria - Minerva Bancaria, 5-6: 35-64, 2009.
Dealing with one exogenous adverse external shock at a time is generally a difficult challenge for heavily indebted poor countries, because of limited fiscal space, few policy options and scarce debt management capacity. The current financial crisis, because of its unprecedented severity and global scale, forces poor countries to deal with multiple exogenous shocks simultaneously: mitigating the effects of a reduction in trade, capital inflows and foreign assistance is going to be a very hard task and to require a massive intervention by donors and by the International Financial Institutions, in order to avoid to jeopardize the progresses done so far by debt relief initiatives. The paper tries to spell out the way in which the global economic-financial crisis has affected and still weighs on Low-Income Countries, focusing on overall debt sustainability.External Debt Sustainability and Domestic Debt in Heavily Indebted Poor Countries
Rivista Internazionale di Scienze Sociali, 2: 187-213, 2007, with M. Arnone.
In this paper, we broaden the standard debt sustainability framework used in the IMF-WB Heavily Indebted Poor Countries (HIPC) Initiative to include the analysis of domestic public debt and other feedback effects into the usual debt sustainability analysis (DSA). The latter does not take into account the fully-fledged government budget constraint and the feedback effects of the fiscal and monetary adjustment required by multilateral programs. This work focuses on the evaluation of total public debt sustainability in a simple accounting framework that includes exchange rate effects. We use new data on domestic public debt and show how the switch from foreign to domestic borrowing, and rising domestic real interest rates are likely to undermine the overall sustainability and the success of debt relief programs.The Debt-Growth Nexus: a Dynamic Panel Data Estimation
Rivista Italiana degli Economisti, 11(3): 417-461, 2006.
This paper investigates the relationship between external debt and economic growth in developing countries. Notwithstanding a general agreement on theory, empirical evidence is not conclusive and lacks of robustness. This contribution aims to shed more light on the relationship between external debt and economic growth and to draw some policy implication for debt relief. This work highlights the critical role of econometric and methodological issues. The results for a panel of 69 developing countries over the period 1977-2002 support a negative linear relationship between external debt and economic growth, and between debt service and investment. These effects seem to be stronger in the Low-Income Countries than in the overall sample, raising concern about the dramatic effect that debt has on economic performance in the world’s poorest countries. Eventually, external debt impairs economic growth through the liquidity constraint, the creation of macroeconomic instability, a reduced total factor productivity, and its effect on macroeconomic policies and institutional development.Books, special issues, and reviews
Geoeconomic Fragmentation: The Economic Risks From a Fractured World Economy, CEPR Press, with S. Aiyar and M. Ruta (eds.)
Companion VoxEU column introducing the book, with S. Aiyar, P.O. Gourinchas and M. RutaDebt Relief Initiatives: Policy Design and Outcomes, Global Finance Series, Ashgate Publishing, 2010, with Marco Arnone. Foreword by Nancy Birdsall; Preface by Ugo Panizza; Afterword by Aart Kraay.
Best Book in Economics "Gozzo d'Argento" International Award, Santa Margherita Ligure, 2011.Flyer: Download - Cover: DownloadFinancing for development: editors' introduction
Oxford Review of Economic Policy, 31(3-4): 259-267, with C. Adam, U. Panizza and D. Vines.
Review of Economics and Institutions, Vol. 5, No. 2, with Stelios Michalopoulos.
Abstract: The importance of history, culture, and biogeography in shaping current institutions and the long-run process of economic development is the subject of an important and growing field of research, attracting prominent scholars from different backgrounds. This special issue brings together contributions that investigate both theoretically and empirically the potential mechanisms that mediate the link between institutional and economic development.Book Review: In the wake of the crisis. Leading economists reassess economic policy, O. Blanchard, D. Romer, M. Spence and J. Stiglitz (eds)
Journal of Economics, Vol. 107, No. 3, pp. 287-290.
Chapters in books
Fiscal space: Asian fiscal safety net has shrunk, in B. Ferrarini, M. Giugale and J. Pradelli (eds.) The Sustainability of Asia's Debt, Edward Elgar, 2022.
The Motives to Borrow, in S. Abbas, A. Pienkowski and K. Rogoff (eds.) Sovereign Debt: A Guide to Economists and Practitioners, OUP, 2019, with A. Fatas, A. Ghosh and U. Panizza.
Governments issue debt for good and bad reasons. While the good reasons—intertemporal tax-smoothing, fiscal stimulus, and asset management—can explain some of the increases in public debt in recent years, they cannot account for all of the observed changes. Bad reasons for borrowing are driven by political failures associated with intergenerational transfers, strategic manipulation, and common pool problems. These political failures are a major cause of overborrowing though budgetary institutions and fiscal rules can play a role in mitigating governments’ tendencies to overborrow. While it is difficult to establish a clear causal link from high public debt to low output growth, it is likely that some countries pay a price—in terms of lower growth and greater output volatility—for excessive debt accumulation.Aid Effectiveness in Fragile States, in R. Chami, R. Espinoza and P. Montiel (eds.) Macroeconomic Policy in Fragile States, OUP, 2020, with F. Caselli.
Fragile states are highly dependent on foreign aid and are characterized by several features that impair their economic and social performance. After reviewing the literature on aid effectiveness, we present several stylized facts on aid flows to fragile states and exploits detailed project-level data to provide novel evidence on aid effectiveness in fragile states. Comparing project success rate across fragile and other developing countries confirms that aid given to fragile states is less likely to be effective than elsewhere. Focusing on the conflict dimension of fragility, we extend our analysis to the subnational level to strengthen the identification of the effect of fragility on the likelihood of project success. Our results indicate that a project implemented in a fragile state is about 8 percentage points less likely to be successful than a similar project financed in another developing country. Our analysis does not imply that aid to fragile states should be reduced across the board, but points to several factors that could hamper the growth dividend of aid.The Gender Gap in the Caribbean: The Performance of Women-Led Firms, in S. Dohnert, G. Crespi and A. Maffioli (ed.) Exploring Firm-Level Innovation and Productivity in Developing Countries: The Perspective of Caribbean Small States, Inter-American Development Bank, 2017, with W. Moore and R. Rabellotti.
Credit Access in Latin American Enterprises, in C. Pietrobelli, M. Grazzi and G. Crespi (ed.) Determinants of Firm Performance in LAC: What Does the Micro Evidence Tell Us?, Inter-American Development Bank, 2015, with R. Rabellotti.
Geographical Organization of Banking Systems and Innovation Diffusion, in P. Alessandrini, M. Fratianni and A. Zazzaro (ed.) The Changing Geography of Banking and Finance, Springer, 2009, with P. Alessandrini and A. Zazzaro.
The Global Crisis in Low- and Middle-Income Countries: How the IMF Responded, in E. Brancaccio and G. Fontana (ed.) The Global Economic Crisis: New Perspectives on the Critique of Economic Theory and Policy, Routledge, with A. Zazzaro.