Mezzogiorno: Public Finances and the Quality of Public Services

The paper examines the redistribution of public resources induced by general government across Italian regions and the gaps in the quality of public services across the country. It shows that redistribution in favour of Southern regions primarily reflects differences in income levels. It also shows that the quality of the public services in the South is systematically worse than in the other regions, even in sectors in which per capita spending is not lower than in these regions. It is important that the undergoing decentralisation process contributes to the improvement of the efficiency of the public sector in the South.