Regional Net Fiscal Balances in Italy at the Time of Enhanced Differentiated Autonomy

This paper provides new evidence on regional and macro-regional Net Fiscal Balances (nfbs) in Italy and offers an assessment of the interregional redistributive action carried out by the public sector over the period 2000-2021. We find that the South and Islands regions exhibit substantial, persistent, and structural negative nfbs, while the North-West regions persistently display large positive nfbs. The North-East and Central regions occupy an intermediate position. Regional surpluses and deficits narrow during the financial and pandemic crises, possibly indicating reduced interregional redistribution during difficult times. Furthermore, a decreasing trend in the deficits of Southern regions emerges, possibly due to a declining progressivity of the Italian tax system and a persisting expenditure gap. Regarding redistribution intensity, public policies carry out a limited action, with a slight tendency toward a reduction of redistribution over time.