Is the Italian public debt a particular channel of regional redistribution? A pilot study based on the transfer approach

VERONICA POLIN - FRANCESCA TARTAMELLA In this paper, we examine the regional redistribution of public expenditures on interest in Italy over a long period of time (2000-2015). To perform this analysis, we consider, from the payer side, the financial resources levied at the regional level to finance the annual cost of public debt (both external and domestic) and, from the recipient side, the transfers received by each region based on the holders of domestic Italian public debt. We evaluate the regional impact of interest flows by measuring the regional redistribution carried out within institutional sectors. Finally we focus on households resident in each region because for this type of domestic investor in government securities, the role of taxpayer and of beneficiary overlap. According to our findings, the financing burden is borne by all regions and, for most regions, the enjoyed benefits, as government securities holders, are not sufficient to offset the amount paid through taxes. Furthermore, the monetary losses are not homogeneously distributed at regional level: Southern regions and some of the centre show a greater financial disadvantage.