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Hooked on a subsidy: transfers and preferences for State intervention

Author

Listed:
  • Giuseppe Albanese

    (Banca d'Italia)

  • Guido DeBlasio

    (Banca d'Italia)

  • Lorenzo Incoronato

    (University College London)

Abstract
Residents of areas that benefit from outside assistance may develop preferences towards more state intervention and distrust of the market economy. The paper focuses on the backward territories of the Centre and South of Italy, where a massive place-based policy (extraordinary intervention in the Mezzogiorno) was implemented over the second half of the twentieth century (from 1950 to 1992). We leverage quasi-experimental variation in public transfers to show that people’s attitudes towards state intervention have been shaped permanently in the subsidized areas. We also document that these preferences do not depend on the long-term economic impact of the policy, which was very small, and are empirically well distinguishable from other attitudes in favor of populist instances.

Suggested Citation

  • Giuseppe Albanese & Guido DeBlasio & Lorenzo Incoronato, 2021. "Hooked on a subsidy: transfers and preferences for State intervention," Discussion Paper series in Regional Science & Economic Geography 2021-02, Gran Sasso Science Institute, Social Sciences, revised Feb 2021.
    • Handle: RePEc:ahy:wpaper:wp13
    as

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    References listed on IDEAS

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    Cited by:

    1. Tancredi Buscemi & Giulia Romani, 2022. "Allocation of authority and tactical redistribution of public investments: A historical quasi-experiment," Working Papers 2022:18, Department of Economics, University of Venice "Ca' Foscari", revised 2024.
    2. Antonio Accetturo & Guido de Blasio, 2022. "History and regional policy: some reflections on Italy’s Cassa per il Mezzogiorno," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 42(3), pages 269-277, December.

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    More about this item

    Keywords

    Preferences for state intervention; transfers; place-based policies;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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