Research

Published papers

Abstract. We explore how electoral rules and the degree of civicness of the voters interact in shaping elected officials' behaviour. We examine the expenditure proposals sponsored by Italian Senators from 1994 to 2013 and exploit the 2005 electoral reform that transformed a mainly majoritarian system into a mainly proportional one. First, we find that legislators elected in first-past-the-post districts are more likely to sponsor pork-barrel bills and to put effort into legislative activity than those elected with a closed-list proportional system. Second, more importantly, we show that the effects of the electoral rules are muted in areas with high civicness.

Featured in LaVoce. Previous version on Bank of Italy Woking Papers n. 1135


Abstract. The unchecked build-up of imbalances during the 2000s exposed the euro area to the risk of sudden stops. Such risk materialized in 2009-10 and its consequences were amplified by the absence of adequate institutions. Europe embarked on a thorough process of reforming its economic governance. We review the measures taken concerning sovereigns and banks since 2010 and discuss possible ways forward on both fronts. We argue that, while significant progress has been achieved, a lot of ground remains to be covered. In general, reforms have favoured risk reduction over risk sharing. As a result, in the face of exceptional circumstances, the euro area is not equipped with the fiscal tools necessary for macroeconomic stabilization; moreover, banking union lacks common financial backstops. Only further risk (and sovereignty) sharing can avoid harmful pro-cyclical excesses.


Chapter in books

Economic governance in the euro area: balancing risk reduction and risk sharing, with F. Balassone, S. Cecchetti, M. Cecioni, F. Corneli, G. Semeraro, in Debt Default and Democracy (2018), edited by G. Eusepi and R. Wagner, Edward Elgar Publishing, pp. 124-154.


Working papers


Abstract. The paper analyses the creation of a European Redemption Fund, that would mutualize a sizeable fraction of euro-area countries' national public debts. The authors discuss the potential benefits in terms of lower systemic risks in the Euro area and outline what the Fund should be like in order to avoid ex ante cross-country transfers and ensure a relevant debt reduction in the medium term. The paper argues that, if each country transfers a sizeable share of debt to the fund, financial stability of the euro area could be enhanced. At the same time, a yearly contribution linked to the amount of transferred debt and national GDP could be designed in such a way to ensure a relevant lowering of the debt over the medium term with no ex-ante cross-country redistribution. Incentives to fiscal discipline at the margin would not be weakened.

Featured in Voxeu


Abstract.

The paper presents BIMic, a static and non-behavioural microsimulation model developed at the Bank of Italy. BIMic reproduces the main features of the Italian tax and benefit system, such as social security contributions, personal income tax, property taxes, family allowances and some other social benefits. It aims to evaluate the budgetary impact and distributive effects of tax-benefit programmes. Such programmes may be actually operating at a given point in time or may be a co unterfactual set. To illustrate a potential use of BIMic, this paper discusses the distributive impact of a recently approved legislative innovation regarding the additional transfer to pensioners (known as the quattordicesima ai pensionati).


Abstract. We study the magnitude, the determinants and the electoral consequences of pre-electoral fiscal manipulation by incumbent politicians. To this aim, we build a dataset covering all the Italian municipalities. We document several facts. First, there is a clear political cycle in the path of expenditures, driven by capital outlays. Second, only mayors not affiliated to a national political party induce an election-driven expenditure cycle. Third, pre-electoral expenditure boosts increase re-election prospects of the incumbent only if she is not affiliated to a party. These results are consistent with the hypothesis that national parties have both the incentives and the resources to curb the pre-electoral profligacy of party-affiliated mayors. We also consider the impact of formal institutions. In particular, we find that budget rules reduce the effects of the political cycle, whereas binding term limits seem to be ineffective.


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