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The Pandemic in Italy and Spain Italy and Spain share common institutional backgrounds (e.g. decentralized healthcare systems), but adopted a different model of governance during the first wave of the COVID-19 pandemic ([5]). Comparing the reactions to the pandemic in two countries (Italy and Spain) allows us to study whether hierarchical centralization in Spain fared better than informal decentralized coordination implemented in Italy. Nonetheless, the institutional design of the health system to address the needs of the COVID-19 pandemic was corrected in the second wave of the pandemic, when Spain followed Italy's lead and kept the pandemic governance decentralized. Results (not reported here for brevity) confirm a higher concentration of the COVID-19 pandemic in Italy than in Spain, which implies that centralized governance allows for more homogeneous outcomes across regions, while a decentralized solution allows to identify best practices from those regions that have adopted unsuccessful choices. [Extracted from the article]

Although preferences for redistribution have been widely studied in the economic literature, their relationship with risk preferences has received only marginal attention so far. The aim of this work is to provide evidence on this topic using a between-subject laboratory experiment and a fine grid to measure individual risk attitudes. Our findings suggest that the more the people are risk averse, the more they are in favor of redistribution across members of a society that allows upward social mobility, but it is also characterized by uncertainty about the final position in the income ladder. Our interpretation is that individuals exploit redistributive taxation as a form of insurance against uncertainty in the outcome of their effort. (JEL codes: C91, D81, H24, H30) [ABSTRACT FROM AUTHOR]

We exploit variation across Italian regions in the implementation of region-specific tariffs within a prospective pay system for hospitals based on diagnosis-related groups to assess their effect on health and on the use of healthcare services. We consider survey data for the years 1993-2007 with information on both individuals' perceived health and their utilization of healthcare services. The results suggest that the introduction of market incentives via a fixed price payment system did not lead to worse health perceptions. Instead, it marked a moderate decrease in hospitalization coupled with a clearer decrease in the utilization of emergency services. We also find mild evidence of reduced satisfaction with healthcare services among hospital patients. These effects were stronger for adoptions occurring when also the national government supported the market-based approach. Results are robust to sensitivity checks. [ABSTRACT FROM AUTHOR]

We study the institutional solutions needed in a decentralized framework to cope with the potential adverse welfare effects caused by localized negative shocks, that impact on the provision of public services and that can be limited by precautionary investments. We consider first a public relief fund to cover these ‘collective risks’. We analyse the underinvestment problem stemming from the moral hazard of Local administrations, when investments are defined at the local level and are not observable by the Central government that manages the relief fund. We then examine the potential role of private insurers in solving the underinvestment problem. Our analysis shows that the public fund is almost always a better institutional arrangement with respect to the private insurance solution, but competitive private insurers can improve social welfare in the presence of Central government’s soft budget constraints problems, especially when the number of Local administrations is large. (JEL codes: H23, H77, G22). [ABSTRACT FROM AUTHOR]

The presence of extensive housing subsidies characterizes the current Italian tax system as inefficient. In this article, we study whether inefficiency is the price to be paid to improve equity, by assessing the distributive impact of housing taxation on households’ well-being. We concentrate on the Personal Income Tax (PIT) on the main residence, and compare current provisions of the Tax Code with alternative approaches which consider the imputed rent (IR) from owner-occupied dwellings, and would make the tax system neutral with respect to the allocation of wealth among different assets. Holding revenues constant at the current level, we assess the distributional consequences of the IR approach in terms of several alternative scenarios. Our results suggest that the current tax system is as inefficient as it is inequitable. In particular, by including IR from owner-occupied dwellings as a component of the PIT gross income, we find that overall, inequality is reduced, while contemporaneously increasing efficiency in the allocation of wealth. Moreover, considering changes in tax liabilities for individual taxpayers, we show that taxing IRs will favour the young and penalize the elderly. (JEL Codes: H24, D31) [ABSTRACT FROM PUBLISHER]