Vilfredo Pareto and the methodology of the Italian tradition in public finance

In the last decade of the nineteenth century, Italian scholars started using a scientific methodology to tackle public finance problems. Their studies are now referred to as the Italian tradition in public finance, whose origin is considered to lie with De Viti de Marco (1888). Shortly before his death in 1950, Fasiani, the last scholar of the Italian tradition, published an important article, in which he showed that, even if Pareto never worked in public finance, he had some influence on the Italian public finance scholars. This paper aims to draw scholarly attention to the above article and to direct new light onto Pareto’s methodological influence on the Italian tradition. Firstly it is pointed out that the Paretian idea of science deeply influenced the late scholars of the Italian tradition. Secondly, it is shown that Paretian sociology was less important than his economic methodology. Thirdly, it is argued that it is necessary to distinguish the problems concerning the explanation of public choices, from the problems of the economic effects of public policies; then, in a generalized Paretian approach, most public policies may be studied under economic hypothesis. It follows that much of the Italian tradition may be taken back to a Paretian approach, even if it remains true that, in the latter, public choices may be explained by sociological reasoning only.