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After the reform of local government organisation and finance following Act 142/1990, Reforming local autonomy, Italian councils can exercise considerably more discretion in setting their expenditure and taxation levels; in this paper a model in the microeconomic tradition is developed to predict the likely changes in these councils' behaviour. The model is based on the assumption that local governments behave as if they were maximising a nested Stone—Geary utility function; at the first stage of the utility-maximisation process, they set up the overall level of taxation, and at the second level they decide how to allocate expenditure among the different services. The results suggest that in the first years after the reform a utility-based incremental budgeting model could explain the determination of expenditure and its composition. Although the model has strong microeconomic foundations, the interpretation of the results may need to be tentative because the data used in the estimation procedure are for a transition year from the old to the new system. The results of the estimated econometric model were then used to predict the likely changes in expenditure which will be brought about by the introduction to the system of a locally managed property tax.

The antithesis between autonomy, equity, and efficiency are central elements in fiscal federalism. The literature argues that the existence of lower tiers depends on their ability at being better informed than the centre on local preferences and suggests that central government should exercise its control mainly through the grant allocated to each tier. However, setting up an efficient system requires the knowledge of nonobservable local parameters, and this creates an asymmetry-of-information problem that the literature on grants-in-aid has not recognized so far. This paper is an attempt to fill this gap. An optimal grant system that central government could use to reach an efficient allocation of resources within an intertemporal model characterized by asymmetry of information is described. The optimal grant formula is set in a dynamic framework by using an approach taken by Harris and Townsend in 1981. The formula obtained is very general and can be applied to many other situations involving delegated choices.

Since the formulation of the well-known law of the 'displacement effect' there has been a relative concentration on public consumption expenditure as a determinant of public-sector spending. However, in the last few years transfers toward the personal sector have been the most dynamic item and could effectively have caused the observed fluctuations in government expenditure. A causal analysis approach is used to suggest a method for explaining their dynamics in the period 1960–88.

Background: In Italy, copayment has changed its nature and it can no longer be simply considered a system to curb inappropriate expenditure. It has become an important form of revenue for public health care provision, but it might also become a source of distortions in income and health benefits redistribution. Methods: We use a rich administrative dataset gathering information on patients demand (whose records have been matched to income declared for tax purposes) to study the effects of an additional copayment (the so called "superticket" introduced by the Italian government in 2012) in Lombardy, the biggest Italian Region whose socio-economic dimension is comparable to that of many European countries (e.g., the Netherlands, Switzerland, etc.). Results: Our analysis shows that at the aggregate level the non-uniform superticket schedule adopted in Lombardy is slightly pro-poor, but this result coexists with evidences pointing towards possible cases of restriction to access caused by the additional copayment. Conclusions: The introduction of the superticket and the ensuing increase in the out-of pocket payment for health care raises questions about the distribution of the burden among patients, and the sustainability of the extra revenue through time. This issue needs to be further investigated by combining health status data with the information in this dataset.

TWO OF THE MOST WIDELY REFERRED TO MODELS OF LOCAL (OR STATE) BUDGETARY BEHAVIOR ARE DEVELOPED AND TESTED. THE MODELS CONSIDERED ARE A VARIANT OF THE FLYPAPER MODEL (SEE, FOR EXAMPLE, COURANT ET AL., 1979 AND OATES, 1979) AND A CONVENTIONAL MODEL WHICH BUILDS ON THE SEMINAL WORK OF WILDE (1969, 1971). THE MODELS ARE DEVELOPED IN A MANNER WHICH ALLOWS THEM TO BE TESTED EMPIRICALLY USING DATA FOR ENGLISH LOCAL GOVERNMENTS. TWO TYPES OF TEST ARE EMPLOYED: THE ABILITY OF THE TWO MODELS TO EXPLAIN THE VARIATIONS IN EXPENDITURE LEVELS ACROSS LOCAL GOVERNMENTS WITHIN ANY GIVEN FISCAL YEAR; THE ABILITY OF THE MODELS TO PREDICT FUTURE LEVELS OF EXPENDITURE GIVEN CHANGES TO LOCAL GOVERNMENT BUDGET CONSTRAINTS (AS BROUGHT ABOUT, FOR EXAMPLE, BY CHANGES IN GRANTS-IN-AID FROM CENTRAL GOVERNMENT).

In this paper, it is shown that the institutional context within which lump-sum grants are given can be an important determinant of local (or state) government expenditure responses to such grants. By using the system of local government finance that operated in England until 1990 as a case study, it was shown that the two lump-sum components of the grant system can be predicted to stimulate substantially different expenditure effects. And this is so despite the fact that both of the grants are unconditional lump-sum grants. A model was developed and tested in which the differential expenditure effects are explicitly taken into account and this modelling exercise stands up well when tested against the empirical evidence.

Uses the needs indicators developed by the government to allocate grants-in-aid to determine whether it is possible to build satisfactory models of local authority behaviour based on the suggested performance indicators. The findings are positive, and afford the opportunity to explore the nature of the impact of political control on local authority behaviour. (Abstract amended)

Objectives: We assess the individual willingness to pay for diseases arising from risky lifestyles and investigate the personal factors that influence such willingness. Study design: We conducted an online survey with 821 respondents in Italy. The questionnaire was distributed via Facebook® in July and August 2016. The questionnaire covered sociodemographic characteristics, health status, behaviour and psychological attitudes, economic status, and opinion about covering the healthcare costs related to overeating, unhealthy diet, sedentary lifestyles, alcohol abuse, tobacco smoking, driving under the influence of alcohol, and illegal drug use by. Methods: We performed the following: (1) the study of the patterns in the dependent variables by principal component analysis; (2) analysis of the determinants by Holdout Variable Importance measure obtained in Random Forest; and (3) we used ordered logit models. Results: Participants agreed with the idea that public health care should be provided for problems arising from bad eating habits and sedentary lifestyle (50.4%), whereas the health care consequences of the other risky behaviours should not be publicly financed by the Italian National Health Service. Conclusions: Our study gives an overview of the willingness to pay of a population living in a country where financing of the Health Service is based on general taxation. So, these results may be generalized, with due caution, to all the countries where the Health Service offers universal coverage and is operated by the government, but of course not to scenarios related to market-based or social health insurance systems.