Giulia Valeria Sonzogno (p), Mara Giua, Francesca Micocci

Alessandro Cusimano

The Next Generation EU program (NGEU) mobilises an unprecedented amount of resources to foster resilience and economic recovery. However, the scientific debate on how to successfully use these resources is still limited. This paper wants to inform and guide the implementation of NGEU for the successful use of these resources by identifying which difficulties might hamper the implementation and results and how they can be mitigated. Given the similarities between Cohesion Policy and Next Generation EU in terms of aim, governance and territory of intervention, we leverage the long experience of the Cohesion Policy as a laboratory to collect evidence on what types of intervention work in practice, in which composition and for whom, and with which governance models. With particular reference to the Italian case, we employ Machine Learning algorithms for policy-oriented predictive analysis, utilizing granular data on all individual projects funded by the EU Cohesion Policy for the 2014-2020 programming period in Italy, together with relevant location-specific covariates. The granularity and extent of such data will maximise the predictive power of Machine Learning routines and their comparative advantage over traditional methods, allowing us to forecast project success - defined as the achievement of project targets, and project delay - while identifying key territorial factors and project-specific characteristics that explain outcome heterogeneity. To account for non-linearities in the data, we employ both linear and tree-based models. The comprehensive nature of the data enables the identification of heterogeneity sources across project and municipality types, providing policymakers with evidence-based guidance to refine resource allocation, and shed light on selection criteria for targeting rules.

Alessandro Cusimano (p), Federico Fantechi, Fabio Mazzola

Giuseppe Maggio

The Circular Economy (CE) revolution aims to reshape the European production structure through the strategic use of EU public funds (ERDF, Cohesion, etc.) within the broader framework of enhancing regional and territorial competitiveness. Unlike many green policies and programs that primarily focus on reducing environmental impact—often at the expense of economic growth—CE initiatives are designed to mitigate environmental harm while simultaneously restructuring the economic landscape for positive medium- to long-term outcomes. This dual approach is expected to foster territorial growth in employment, competitiveness, and GDP.

This study hypothesizes that the positive impacts of CE initiatives may be contingent upon specific regional and territorial characteristics and endowments. To test this hypothesis, we leverage a comprehensive multilevel dataset. This dataset includes microdata on economic actors, providing detailed information on firm performance, investment behaviours, and innovation activities. Additionally, we incorporate georeferenced information on various infrastructures such as waste management facilities, power plants, recycling centres, and transportation networks. These geospatial data allow us to analyse the heterogeneity of territories exploiting the spatial distribution and accessibility of critical infrastructure that supports CE activities.

Moreover, we integrate data on local labour markets, including employment rates, skill levels, and workforce demographics, to understand how human capital influences the effectiveness of CE policies. Regional characteristics such as GDP per capita, industrial composition, and environmental quality indicators are also included to capture the broader economic and ecological context. By combining these diverse data sources, we create a robust analytical framework to assess the heterogeneity of CE policy impacts across different territories.

Our analysis employs a counterfactual design supported by Machine Learning tools to evaluate the differential impacts of public investments in CE programs (sourced from OpenCoesione) on the performance of beneficiary firms. This approach allows us to isolate the causal effects of CE initiatives and identify the conditions under which they are most effective. We find significant variation in the impacts of CE policies, highlighting the importance of tailored territorial strategies to maximize the benefits of the CE revolution.

Our findings underscore the need for relevant policy measures and investments at the territorial level to exploit the potential of CE revolution fully. By understanding the specific regional and territorial factors that influence the success of CE programs, policymakers can design more effective interventions that promote sustainable economic growth and environmental sustainability across diverse regions.

Giuseppe Maggio (p)

Gabriele Musacchia

This article investigates the unintended consequences of land use right restrictions on deforestation in Vietnam, shedding light on a crucial yet underexplored aspect of land tenure rights that applies to several contexts. While an extensive literature studies the economic and environmental impacts of tenure security and transfer rights, limited attention has been given to government-imposed restrictions on land use rights. The objective of this study is to understand how land use right restrictions affect the
opportunity cost of forest clearing. The study focuses on Vietnam, where a significant portion of agricultural land is compulsorily dedicated to rice cultivation under the Rice Land Designation Policy (RLDP). This policy, enforced at the local level, sets specific targets for rice cultivation, effectively restricting land use rights. The analysis takes advantage of a unique two-wave panel dataset on land use at the commune level, obtained by merging two Vietnam rural censuses covering 56 million individuals with geospatial information on tree cover loss, and geospatial information on the exact land designed to be cultivated under rice according to the RLDP. Our findings reveal a strong nexus between cropland expansion and tree cover loss, with the relationship being more pronounced in communes subject to land use constraints imposed by RLDP. When cropland expansion occurs in areas with land use restrictions, the impact on tree cover loss is significantly higher. Access to markets appears to mitigate the detrimental effect of cropland expansion under these restrictions, suggesting that economic opportunities in urban areas may deter farmers from expanding cropland at the expense of forests. With
Vietnam experiencing substantial deforestation, this research provides insights that can inform policies aimed at reducing deforestation levels.

Gabriele Musacchia (p), Giuseppe Maggio

Giulia Valeria Sonzogno

In this research, we investigate whether members of the Italian cabinet exert influence during the drafting of the budget law by allocating tax transfers to municipalities near their hometowns. This phenomenon, widely debated in the literature, is referred to using the Latin expression Cicero Pro Domo Sua Premium. Unlike previous studies on the subject, we focus on the role of government members in a parliamentary system such as Italy’s. Our aim is to understand how the increasing prominence of the executive in the legislative process—particularly in discussions surrounding the state budget—affects the distribution of resources to municipalities represented within the government. To address this question, we constructed a detailed dataset covering government members from 1995 to 2023. Leveraging comprehensive data on state transfers to municipalities, we built a panel dataset with 209,496 observations on municipal transfers from 1996 to 2023. We further explore the heterogeneity of this dataset by examining the effects of fiscal federalism reforms, different electoral laws, various roles within the executive, and the presence of technocrats in political executives. Additionally, we distinguish between technical and political governments. Using a fixed-effects panel regression, we find a positive and robust relationship between a government member’s geographical origin and the allocation of resources to nearby municipalities. However, this relationship is not statistically significant when the government members are technocrats. Finally, we argue that this positive relationship could stem from an electoral credibility mechanism: government members may channel resources to their hometown areas to maintain political support. Failure to do so could undermine their standing within their own party and among other politicians, particularly if they lose support from their local constituency despite holding an influential position.