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The relationship between income inequality and polarization is an empirical fact: a change in equality might occur together with a change in polarization. At the same time, polarization might emerge while inequality remains constant. The outcome of this process entails relevant information about the evolution of the income distribution. We exploit the LIS micro-data to perform a relative distribution analysis for six European countries. Our aim is describing how both the market and the disposable income distributions evolved over time. The results indicate that polarization increased in all the considered countries, being the largest in the United Kingdom and the smallest in Italy. At the beginning of the period the relative polarization of disposable income is lower than the one for market income. In time, however, this pattern is reversed. This evidence does not unambiguously suggest an increasing effectiveness of the equalizing role of the welfare state. Nonetheless, in all the countries downgrading prevails over upgrading: the relevance of the middle-class getting poorer is larger than the one of the middle-class getting richer.

This paper adopts an instrumental variable approach to uncover the impact of variations in minimum temperature on emergence and severity of actual violence through the effect on food availability, captured by rice crops per capita. The link between increase in minimum temperature and rice crops is suggested by natural science literature. We use Indonesia as a case study over the period 1990-2003. Results show that an increase of the minimum temperature during the core month of the wet planting season', i.e. December, determines an increase in violence fuelled by the reduction in future rice production per capita.

We present an analysis of the share of public ownership in the product market in the OECD countries from 1974 to 2007. Despite much has been said on the broad topic of reforms and regulation, a sector-specific insight is missing. We replicate the analysis of Galasso (2014) by sector of activity accounting both for the dynamic bias of the lagged public ownership and the degree of state ownership at the beginning of the period. At the aggregate level both persistence and initial conditions play a major role, together with the European Single Market Program membership. Specifically, EMU members have a smaller share of public ownership in the electricity sector, while SMP members have less privatized telecommunications. Looking at the sub-sample of years when a change in the share of public ownership occurred, we find a composition effect of SMP: it has a negative impact on public ownership in telecommunications, but a positive one in the rail sector. Overall, we find that the countries in our sample tend to privatize mainly when decision taken at the supranational level (the EU for European countries) push towards this policy.

We empirically investigate the existence of spatial autocorrelation between military dictatorships in Sub-Saharan Africa from 1977 through 2007. We apply a Bayesian SAR probit regression, extended to a pooled model. We find a robust and positive spatial autocorrelation coefficient, which shows a spatial concentration of military autocracies. In particular, in the aftermath of Cold War military regimes cluster in the central region. Among covariates, interestingly, foreign aid shows a positive association with military regimes during the Cold War while it turns to exhibit a negative association after 1989. With regard to other economic covariates, we find that: a) there is a negative association between GDP per capita and the existence of a military autocracy; b) a larger manufacturing sector is associated with a smaller probability of a military rule; c) a larger mining sector is associated with a higher likelihood of military rules; d) trade openness reduces the likelihood of militarization.

We show the existence of a diffusion process of military dictatorships in Sub-Saharan Africa from 1972 through 2007, using panel data probit estimation and a Markov chain transition model. This process is shortly-lived, since we observe an overall trend that reduces the number of military regimes. With regard to economic correlates, we also find that Manufacturing share of GDP, Primary share of GDP positively affect the probability of military dictatorship, and Openness to trade, whereas the British colonial origin are negatively associated.

We claim that a sequential mechanism linking history to development exists: first, history defines the quality of social capital; then, social capital determines the level of corruption; finally, corruption affects economic performance. We test this hypothesis on a dataset of Italian provinces, and address the possible endogeneity of corruption by applying an IV model. We use three sets of historical instruments for corruption: 1) foreign dominations in 16th-17th century, 2) autocracy/autonomous rule in the 14th century, and 3) an index of social capital between in the 19th-20th century. The results indicate a significant impact of historically-driven corruption on development.

This study consists of three essays on electoral accountability and local public finance. ‘A comprehensive test of Yardstick Competition in the Italian Municipalities’ tests the Yardstick Competition hypotheses on a dataset of Italian Municipalities during the period 1995-2004, focusing on the local property tax rate on the main dwelling (ICI abitazione principale). First, a vote popularity equation is estimated with instrumental variables, including an original measure of inter-jurisdictional comparison between the domestic tax rate and the average neighbors’ tax rate. The findings verify popularity concerns of the incumbent, robust to alternative definitions of popularity. Then, we estimate a spatial tax setting equation detecting interactions driven by the positive spatial lag coefficient. Given these evidence, we conclude that Yardstick Competition is present in the dataset. ‘The time dynamics of Yardstick Competition in the Italian Municipalities’ investigates the pattern of strategic interaction from 1995 to 2004. The literature identifies Yardstick Competition with the average interaction in time; we move forward, by estimating the spatial tax setting equation on subsequent time subsamples of the dataset to capture the variation of the interaction due to the introduction of a marginal year. The results show a converging trend towards the lowest level of spatial correlation. This pattern is especially evident in those Regions with a higher density of municipalities, where there are more opportunities to make inter-jurisdictional comparisons. This evidence suggests that the informational spillover generating Yardstick Competition, contrary to the assumption in the literature, changes over time. ‘Do voters learn from past experience? Yardstick Competition and political selection’ extends the model of Yardstick Competition by assuming that the stock of information available to voters accumulates over time. The theoretical results show that when past mimicking is observed there is a range of values of the weight attached to past experience for which the less competent incumbent would not be re-elected. If voters do not observe past mimicking, however, successful mimicking is always feasible. The predictions of the model are tested on an electoral cohort of Italian Municipalities by estimating a probit regression where the dependent variable is the dummy for reelection of the incumbent and the variables of interest are the voters’ beliefs on the tax rate computed through dynamic Bayesian updating. The results, however, fail to verify the predictions of the model as the coefficient associated to the updated belief is never statistically significant. ‘Asymmetric information and Political Budget Cycles: the effect of the local diffusion of newspapers’ examines the expenditure cycles in the Italian Regions from 1984 to 2008 and their nexus with voters’ awareness, proxied with the local diffusion of newspapers. We estimate a dynamic expenditure equation with Least Squares Dummy Variable Corrected (Bruno, 2005) accounting for the small size of the dataset. The results, robust to different specifications of the econometric model, find cycles in total expenditure and in capital expenditure before the electoral and fiscal reforms in the mid-90s. During this period the diffusion of newspapers constrains the electoral expenditure of those same items; the diffusion of generic newspapers is associated to a larger effect than the diffusion of economic newspapers, suggesting stronger popularity concerns towards the newly informed voters. The analyses does not detect neither expenditure cycles nor any effect of the diffusion of newspapers after 1995, indicating a possible shift from a cycle in the size of expenditure to a less visible type of signaling, the cycle in the composition of expenditure.