Patrizio Lecca (p), Francesca Crucitti, Philippe Monfort, Simone Salotti

Reinhold Kosfeld

EU cohesion policy is implemented within a multi-annual financial framework where resources are allocated to each region with different purposes. Furthermore, the cohesion policy is by nature temporary, as programmes have a clear start and end date. Therefore, assumptions about agent’s expectations play an important role for the sign and magnitude of the policy impact. The use of an intertemporal model that accommodates rational expectations seems well suited to the analysis of such a policy package. In this paper, we therefore develop a spatial intertemporal dynamic general equilibrium model covering 89 NUTS 1 regions of the EU and the UK to analyse the macroeconomic impact of investments financed by the ERDF and the CF over the period 2014-2020. To shed light on the role of agent’s expectations, we compare the results obtained under the assumption of forward-looking agents with perfect foresight with an alternative version in which agents form expectations based only on the current and past state of the economy, therefore making economic agents myopic. The influence of expectations on outcomes is a priori unknown. On the one hand, myopic agents react to the policy only when it is actually implemented, while on the other hand, forward-looking agents anticipate future interventions. This would lead to the impact of the policy being front-loaded in the response function of the forward-looking agents compared to that of the myopic agents. The difference between the two settings is therefore likely to depend on the parameters influencing expectations, the size and nature of the policy shock, and the time at which the impact of the policy is analysed. The model includes sector-to-sector input-output linkages both within and across regions. We calibrate the model to data on bilateral final and intermediate goods trade flows for 89 regions and a composite exogenous rest of the world region and simulate model responses to cohesion investments, assessing the short-run and long-run effects.
We show the importance of agents’ expectations when assessing the impact of the interventions supported by the funds. A model with perfect foresight tends to predict smaller impacts than a model with myopic agents would imply. The regional distribution of the differences in GDP impact between the two variants of the model suggests that, the largest deviations are recorded for net beneficiary regions, with interesting implications for perceived policy persistence, the nature of interventions, and their long-term effects.

David Swan (p), Laurent Carnis, Anais Gautier, Tommaso Giuriati, Anne Kletzen, Océane Perrona

Patrizio Lecca

Reducing both mortality and morbidity from road traffic accidents remains a major objective of public policy across both high- and low-income countries. The social cost of these accidents continues to receive great attention, suggesting that significant resources must be committed to reducing this phenomenon. Achieving such objectives can be done in two ways: better prevention of such accidents, or better response when they occur. This paper will focus on the latter, looking at the role of emergency services in the response provided to road-traffic accidents and their approach to post-crash interventions.

In order to understand how these services are provided to a population, we will look to provide the building blocks to a simple supply-demand model of these emergency services. We will do so using two sets of data from France. The first covers all interventions by fire and rescue services for road-traffic accidents, notably giving access to all inputs used as well as performance measures. The second covers official data on road-traffic accidents collected by police forces. This data gives more details on the profile of victims and in particular their health state post-accident. Our analysis will focus on two sources of variation, the most notable of which will be at county-level. We will also use data from three different periods (2002,2012,2022) to analyse variation over a long timeframe.

The first analyses performed show that there is a clear heterogeneity in the supply of rescue services across France. We will look to comment on what could explain the fact that smaller counties may have insufficient supply of rescue services, all other things being equal. Several variables could explain such a phenomenon, such as the proportion of operations dedicated to road-traffic accidents, or the proportion of volunteer personnel compared to full-time personnel. This work will contribute to a better understanding of how the emergency response to road-traffic accidents can be organised when different counties have heterogeneous characteristics.

Gianluca Monturano (p), Giuliano Resce, Giulia Sonzogno

David Swan

This work offers a novel contribution on the relationship between economic policy interventions and electoral outcomes and on how economic policies can shape the political landscape. By leveraging a counterfactual approach and a unique dataset, this work investigates the causal link between a large income support measure introduced in Italy (i.e. Italian Citizenship Income) and votes for the incumbent party, taking into account geographical and institutional factors. Our results show that the introduction of an income support program does not affect citizens' voting behavior in favor of the ruling party. What drives the consensus are local socio-economic conditions in which the measure is implemented vis-à-vis the measure per se on the pocketbook.

Reinhold Kosfeld (p), Ivo Bischoff, Sourav Das

Gianluca Monturano

We ask whether inter-municipal cooperation serve as a platform by which municipalities coor-dinate tax policies and reduce the intensity of tax competition. Specifically, we focus on inter-municipal cooperation in form of inter-local industrial parks. We apply the case study-oriented synthetic control method (SCM) to analyze the causal impact of 12 inter-local industrial parks on municipal tax-setting behavior using data on municipalities from West-German states of Hesse and North Rhine Westphalia between 2000 and 2018. We find significant overall effects of inter-local industrial parks on local tax-setting behavior in the majority of the cases. An ex post analysis suggests that tax coordination only takes place in specific political constellations.