From persons to places: interregional redistribution by personal public expenditure programmes

Abstract

Public expenditure programmes may allocate resources among beneficiaries primarily on the basis of socio-demographic features of individuals or households, such as age, state of health, economic well-being or employment status (“personal†programmes), or of characteristics of territories such as level of economic development, infrastructural endowments, economic structure and morphological conditions (“territorial†programmes). Moreover, any such programmes may lead to the redistribution of resources across territories. These redistributive effects may be explicitly pursued, and this is often the case for “territorial†programmes (e.g. equalising schemes), but redistribution may also be an unintended by-product of policies pursuing other objectives (public provisions, social security). This paper aims to measure the interregional redistribution produced by personal programmes as defined above and to develop a better understanding of how personal criteria driving the allocation of public expenditure programmes contribute towards the interregional redistribution of resources. This issue is tackled by estimating a distribution of public expenditure across regions as if the allocation of their benefits were driven exclusively by personal factors, and as if territorial factors were negligible. This approach is then applied to analyse public expenditure in Italy during the period 1999-2010. Results show that overall interregional redistribution falls slightly when we shift from the actual distribution of public expenditure across regions, to the distribution driven exclusively by personal criteria, and this result holds for most public programmes. However, even if resources are distributed on the basis of personal criteria only, public programmes still produce a significant level of territorial redistribution.