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)

The literature on regional agglomeration suggests that local economic revitalisation is likely to involve a rise in local wages. In the context of urban regeneration, community-oriented policy envisages to improve prosperity among the residential population of deprived neighbourhoods. Yet, due to an ever-increasing preference of households to reside at central locations this policy may spur gentrification if outsiders are attracted to new jobs and upgraded housing environments. Apart from facing difficulties in gaining access to suitable data with neighbourhood reference, evaluation studies are confronted with conceptual challenges, since the empirical framework of this research relates to larger territories. The study utilises basic assumptions from the literature on regional economic growth, which apply to the neighbourhood level. Using Germany as a case study, the analysis explores whether local economies have received a boost that may have affected household sorting and local household income during the past two decades. The study reveals no considerable shift in sorting that would indicate gentrification. With a view to income over the past decade local households with a middle or higher income in programme areas have kept up with overall income growth and low-income households have experienced zero growth but appear to have thereby performed slightly better than their counterparts elsewhere. Moderate funding of urban regeneration in combination with support to local communities is not capable of providing a remarkable boost, but it may bring about improvements for the residential population without accelerating gentrification.

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

Italy’s National Recovery and Resilience Plan (NRRP) combines structural reforms and investments aimed at supporting the green and digital transition and strengthening long-term growth. Beyond structural effects, NRRP interventions generate short-term demand stimulus. However, the territories hosting projects do not necessarily coincide with those where implementing firms are located, potentially generating territorial spillovers.

This study quantifies these spillovers by mapping NRRP public works along two dimensions: project location (“origin”) and firm location (“destination”), both identified at the level of Local Labour Systems (LLSs). LLSs are functional labor market areas characterized by strong internal commuting flows.

Out of €90.4 billion in awarded infrastructure projects, 72% of total value is implemented by non-resident firms, indicating substantial interterritorial linkages. The interregional origin–destination matrix highlights strong concentration patterns: regions such as Lazio and Lombardy emerge as major “exporters” of construction services, while Sicily, Campania, and Lombardy account for large volumes of originating resources. Diagonal entries reveal that a significant share of funds remains within regional boundaries, though cross-regional flows are substantial.

Based on this framework, we construct synthetic indicators at the LLS level, including a normalized trade balance index (net inflows over total flows) and an internal demand coverage index (share of intra-LLS allocations).

To preliminarily explore their determinants, we estimate OLS models focusing on a construction sector stress indicator capturing demand pressure relative to productive capacity. The indicator is negatively and significantly associated with both domestic demand and the normalized trade balance. Income per capita and population show positive and significant effects, while institutional quality (MAQI) is weakly significant.

Overall, the findings suggest that local productive capacity constraints play a key role in shaping territorial spillovers generated by NRRP infrastructure investments.