No. 708 - Weaknesses and perspectives of municipal finance in southern Italy on the eve of Covid-19

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by Alfredo Bardozzetti, Paolo Chiades, Anna Laura Mancini, Vanni Mengotto and Giacomo ZiglioJuly 2022

The aim of the paper is to analyse the economic and financial conditions of Southern Italian municipalities, as compared with the rest of the country. The paper also looks at their future prospects in the aftermath of Covid-19 and at the rebooting of the equalization system.

Over the last decade the southern municipalities have suffered from structural weaknesses that have worsened their financial condition. Therefore, they have been less able, with respect to the rest of the country, to provide public services and to invest. Looking ahead, the difficulties facing southern municipalities can be overcome through the completion of the federalist reform (equalization system and essential level of public services), better enforcement of tax collection and more efficient spending procedures.

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