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The economic impact of the Friuli-Venezia Giulia autonomy: a synthetic control analysis of asymmetric Italian federalism

Abstract

This article illustrates a case study on the economic impact of autonomy of one of the five Italian special-statute regions, namely Friuli-Venezia Giulia. This region had, and continues to have, legislative, administrative and financial prerogatives in areas of public intervention that are the duty of the central government in the 15 Italian ordinary regions. Accordingly, Friuli-Venezia Giulia could have year by year exploited such prerogatives to achieve an economic development higher than that attainable in the absence of its autonomy. In other words, Friuli-Venezia Giulia long-run economic growth would have been less than that actually experienced if the region had been an ordinary one. To test this hypothesis, the synthetic control method has been adopted. A suitable synthetic Friuli-Venezia Giulia has been constructed to contrast the evolution of regional real per capita GDP, observed over the post-autonomy-policy period, with the corresponding evolution of the same aggregate for the synthetic counterpart. This comparison reveals that if Friuli-Venezia Giulia were not an autonomous region, its per capita GDP would be significantly lower than that effectively observed.

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Notes

  1. 1.

    The term ’subnational’ collectively stands for levels of government below the national government: both lower-level governments (municipalities, communes or local councils) and intermediate tiers (regions, states, provinces, counties, territories or districts).

  2. 2.

    Asymmetric federalism is properly related to a federation or confederation, although many unitary states have a structure of government that resembles that found in an asymmetric federation (e.g., Italy, Spain, and UK).

  3. 3.

    Since in this exercise the outcome variable is the same as used in other synthetic control analyses, the selected predictors have been chosen by referring to the same literature, and they are very similar to those used in those works (Abadie and Gardeazabal 2003; Abadie et al. 2015; Barone and Mocetti 2014).

  4. 4.

    Specifically, GDP, population, and units of labor are available for 1951–1993 period, while the series of value added for the four main economic sectors (agriculture, industry, private and public services) are available for the period 1960–1993.

  5. 5.

    The fact that the donor pool contains, in this case, only four regions should not be seen as a problem. As Abadie et al. (2010: 497) argue, the synthetic control method does not require a large number of comparison units in the donor pool.

  6. 6.

    If all the non-autonomous regions are considered, the gap is 1.2 million lire.

  7. 7.

    The 1986 gap in real GDP, shown in Fig. 4, has been converted into current values in order to make it comparable with central government figures.

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Acknowledgments

I would like to thank the following for helpful suggestions and research assistance: Davide Azzolini, Erich Battistin, Gianfranco Cerea, Manuela Cumerlotti, Claudio Gianesin, Samuele Poy, Enrico Rettore, and Livio Romano.

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Correspondence to Federico Podestà.

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Podestà, F. The economic impact of the Friuli-Venezia Giulia autonomy: a synthetic control analysis of asymmetric Italian federalism. Ann Reg Sci 58, 21–37 (2017). https://doi.org/10.1007/s00168-016-0779-0

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JEL Classification

  • R110
  • H770
  • D78