A govemment report reveals that in Italy in 1999 there were 92 laws and measures regarding subsidies granted by central government and 373 by regions. In 2000, when the transfer of administrative functions from Central Government to regions really took effect, state subsidy measures and laws went down to 51, while regional subsidy measures went up by 18 to 391. This growth is considered risky for firms encouraging entrepreneurs to ignore market "siglals". When the subsidy system is not supported by good selection process, it becomes both inefficient and ineffective. Promoting the start up of firms and temporary employment in the short term, the subsidy system fails to strengthen firms in the medium-long term, like the following survey of 18 firms in the region of Apulia, Southern ltaly, subsidised by law 488/92,is going to demonstrate. While increasing subsidies may be profitable and effective from a macro point of view, the problem is to achieve efficiency targets from a micro point of view. The paper analyzes the conditions that may allow to achive these different goals.
Italian System of Subsidies to Firms' Investment: Between Targets of Efficiency and Effectiveness
LOSURDO, Francesco
2004-01-01
Abstract
A govemment report reveals that in Italy in 1999 there were 92 laws and measures regarding subsidies granted by central government and 373 by regions. In 2000, when the transfer of administrative functions from Central Government to regions really took effect, state subsidy measures and laws went down to 51, while regional subsidy measures went up by 18 to 391. This growth is considered risky for firms encouraging entrepreneurs to ignore market "siglals". When the subsidy system is not supported by good selection process, it becomes both inefficient and ineffective. Promoting the start up of firms and temporary employment in the short term, the subsidy system fails to strengthen firms in the medium-long term, like the following survey of 18 firms in the region of Apulia, Southern ltaly, subsidised by law 488/92,is going to demonstrate. While increasing subsidies may be profitable and effective from a macro point of view, the problem is to achieve efficiency targets from a micro point of view. The paper analyzes the conditions that may allow to achive these different goals.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
