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 the level of economic development, infrastructural endowments, economic structure and morphological conditions ("territorial" programmes). These programmes may have interregional redistributive effects, either on purpose, as 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 seeks 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 to redistribution across territories. We estimate the regional distribution of public expenditure for Italy in 1999-2010, holding that it was driven exclusively by personal factors, and territorial factors were negligible. Results show that, when the distribution of public expenditure across regions is exclusively driven by personal criteria, public programmes still produce a significant level of territorial redistribution, although for most public programmes, interregional redistribution falls slightly compared to the one generated by the observed distribution of public expenditure.