Riccardo Faini CEIS Seminars

Hooked on a Subsidy: Transfers and Preferences for State Intervention
March, 05th 2021 (16:00-17:00)
TEAMS Webinar – Registration required

Lorenzo Incoronato (University College London)

Riccardo Faini CEIS Webinars

Registration form - no later than Thursday

joint with G. Albanese and G. de Blasio

Residents of areas that benefit from outside assistance may develop preferences towards more state intervention and distrust of the market economy. The paper focuses on the backward territories of the Centre and South of Italy, where a massive place-based policy (extraordinary intervention in the Mezzogiorno) was implemented over the second half of the twentieth century (from 1950 to 1992). We leverage quasi-experimental variation in public transfers to show that people’s attitudes towards state intervention have been shaped permanently in the subsidized areas. We also document that these preferences do not depend on the long-term economic impact of the policy, which was very small, and are empirically well distinguishable from other attitudes in favor of populist instances.