Regional income redistribution and risk sharing: how does Italy compare in Europe?

This paper investigates income redistribution and risk sharing and the underlying public policy in Italy, a country marked by stark regional economic contrasts. Unlike previous works, this study also assesses the roles of public consumption, investment, and welfare assistance in kind. The findings suggest that Italy's fiscal system provides redistribution at 25-35% and risk sharing at 10-15% of GDP, with public consumption playing a large role. Compared with results in the literature for other countries, there appears to be less redistribution and risk sharing through Italy's welfare and tax systems because of their different structures. (C) 2002 Elsevier Science B.V. All rights reserved.