From persons to places: interregional redistribution by personal public expenditure programmes

Public expenditure programmes allocate resources among beneficiaries on the basis of socio-demographic features of individuals or households, such as age, state of health, economic well-being or employment status (“personal” programmes), or of characteristics of territories such as level of economic development, infrastructural endowments, economic structure and morphological conditions (“territorial” programmes). These programmes may have redistributive effects across territories, either on purpose, this often happens for “territorial” programmes (e.g. equalising schemes), or as an unintended by-product of policies pursuing other objectives (public provisions, social security). This paper aims to measure the interregional redistribution by personal programmes and to develop a better understanding of how personal criteria driving the allocation of public expenditure programmes contribute towards the interregional redistribution of resources. We estimate the regional distribution of public expenditure as if it was driven exclusively by personal factors, and as if territorial factors were negligible, for Italy in 1999-2010. Results show that, for most public programmes, interregional redistribution falls slightly when shifting from the actual distribution of public expenditure across regions, to the distribution driven exclusively by personal criteria. However, even if resources are distributed on the basis of personal criteria only, public programmes still produce a significant level of territorial redistribution.