Dr. Jhorland Ayala-García (p), Dr. Jaime Bonet-Morón, Mr. Jorge Guerra-España

In various regions around the world territorial reorganizations have been promoted through the division and creation of administrative units as mechanisms to improve local development and political representation. This study evaluates the long-term consequences of regional separations in Colombia by comparing municipalities that remained in their original regions with those that joined newly created ones. Using historical data on territorial divisions throughout the twentieth century, we implement a geographic regression discontinuity design that uses each municipality’s distance to the separation boundary as the assignment variable, and construct instrumental variables based on the arbitrary and short-lived variation introduced by the redefinition of departmental capitals in 1908. This approach allows us to estimate the impact of administrative separation on current development indicators such as multidimensional poverty and unmet basic needs. The results show no significant long-term effects of separation on municipal development.

Dr. Uwe Neumann (p)

In the context of urban regeneration, it is one of the key goals of community-oriented policy to improve prosperity among the residents of deprived neighbourhoods. Initiatives are designed to raise both labour demand (e.g. by fostering entrepreneurship) and supply (e.g. by supporting job search and training). The literature on neighbourhood sorting has demonstrated that upgrading of deprived areas may spur gentrification. Evidence on the outcomes of community-oriented policy with respect to employment and income among households already resident in programme areas, however, is scarce. The study evaluates the German “Social City” programme regarding its contribution to raising local household income. The empirical strategy draws on a wage equation deriving from the current literature on regional agglomeration, which incorporates local market potentials among the determinants. In a sequence of difference-in-differences estimations with neighbourhoods and households as observational unit the analysis reveals no policy impact with a view to residents with a middle or higher income among around 950 neighbourhoods that have participated in the programme since 1999. The programme has begun, however, to improve the income opportunities of households with a low income to some extent in the past decade.

Mr Iván Medrano-Escalada, Mr Marcos Sanso-Navarro (p)

This paper examines regional fiscal multipliers in Spain at the NUTS2 level over the period 1980–2019, combining a local projection approach with a dynamic CCE estimator that accounts for weakly exogenous regressors. The results indicate that government consumption generates positive and persistent effects on output and employment, whereas its influence on labor productivity is comparatively limited. Correlations between the estimated fiscal multipliers and potential determinants suggest that larger, denser, and more open regions display stronger employment responses. Moreover, promoting financial deepening and reducing public indebtedness appear to be alternative ways to enhance the positive effects of public expenditure shocks over time. From a policy perspective, these findings highlight that government spending shocks do not affect all regions uniformly. Consequently, countercyclical fiscal policies should incorporate regional asymmetries in both the magnitude and persistence of fiscal multipliers – an aspect particularly relevant for the design and implementation of EU Cohesion Policy. Although this paper has focused on the estimation of public consumption multipliers, those associated with other categories of government expenditure – such as public investment, education, health, or defense – are essential for designing more targeted and effective fiscal interventions. The lack of sufficiently long and consistent regional data currently constrains this degree of disaggregation, but extending the analysis in this direction represents a promising avenue for future research. Progress along this dimension would also contribute to the development of fiscal frameworks that better align national objectives with regional capacities, thereby enhancing the long-term effectiveness of public spending.

Prof. Riccardo Secomandi (p), Prof. Alberto Zanardi

The Italian National Recovery and Resilience Plan (NRRP) is expected to generate both long-term structural effects and short-term demand stimuli through public investment. However, the location of NRRP interventions—and therefore the territories expected to benefit from their long-term structural effects—does not necessarily correspond to the location of the firms involved in their implementation and, consequently, to the territories where their short-term economic effects arise. This paper investigates the magnitude and determinants of the cross-territorial effects generated by NRRP-funded public works. Using data from the REGIS and INPS databases, projects are mapped according to both their location and the location of contractors’ operational units at the level of Local Labour Market Areas (LLMs). Of the €100.4 billion in infrastructure projects awarded up to February 2026, 72% were assigned to firms located outside the LLM in which the project is implemented, highlighting substantial cross-territorial effects. Multivariate regression models, including aggregate and gravity specifications, are then used to identify the main determinants of these effects. The results indicate that territories with stronger construction-sector capacity retain a larger share of procurement activity and compete more successfully outside their borders, while large tenders and local market stress increase reliance on non-local firms. Gravity-model estimates further show that procurement interactions decline significantly with geographical distance and are stronger between territories with similar socioeconomic and construction-sector characteristics.