Speed of spending and government decentralization: evidence from Italy

This paper investigates whether government decentralization affects the duration of public projects in Italy. Considering a large sample of 415,378 projects managed by different levels of government and co-funded by European funds within the 2007-13 programming period, we found strong differences between areas. In the South and in some Central regions, project duration was higher for the lowest level of government and lower at more centralized levels. This suggests that decentralization there reduced the speed of public spending and therefore spending efficiency. In the North and in most Central regions, the results were mixed. These regional differences were driven by the quality of local institutions.