Fiscal federalism in Italy twenty years after the constitutional reform: an appraisal

One of the pillars of the reform of Title V of the Italian Constitution has been the implementation of fiscal federalism via the devolution of taxation from the centre to the regions and local governments. By conducting a statistical analysis of revenues and financial resources transfer by central government to support regional spending (central government transfer), we demonstrate that despite twenty years having elapsed since the reform the regions are yet to acquire real financial autonomy. The ratio for central government transfers to the regions is analysed here, assessing revenues between 2008- 2020 in conjunction with an evaluation of the trend in these same aggregates during the pandemic period. The re-centralization process during the pandemic emergency increased the reliance of the regional system on transfer of finance from central government. Thus, inadequate regional fiscal autonomy is reflected in the ongoing dependence on central government funds. The dependence of regional budgets on central government transfers did not reduce over the period examined, but rather tended to increase from 2008 onwards, especially in the case of the southern Regions. Over this period this led to decreased regional financial autonomy. The data correlates with a process of re-centralization of legislative spaces and financial autonomy to address, the financial crisis of 2009 and the sovereign debt crisis in Europe in 2011, causing the pendulum of regionalism to swing towards the State.