Abstract
This paper investigates the fiscal consequences of EU-funded waste management
projects on local taxation in Italian municipalities. Using a matched difference-indifferences
approach on panel data from 2007 to 2023, we find that municipalities
receiving EU cohesion funds experienced a increase in per-capita waste taxes, driven
by rising service costs. A decomposition of these costs reveals that while separate
waste collection expanded, the associated logistical and operational expenses increased
sharply. Conversely, although the volume of unsorted waste declined, disposal
costs rose, consistent with the interpretation that residual fractions are more
complex and costly to process. To assess whether cost increases reflected inefficiency
or technological progress, we estimate a non-parametric Malmquist index.
The results indicate substantial productivity gains in sorted waste management,
mostly from technological advancement, but also suggest transitional inefficiencies.
Our findings highlight the need for more integrated investment strategies to balance
environmental goals with fiscal sustainability.
projects on local taxation in Italian municipalities. Using a matched difference-indifferences
approach on panel data from 2007 to 2023, we find that municipalities
receiving EU cohesion funds experienced a increase in per-capita waste taxes, driven
by rising service costs. A decomposition of these costs reveals that while separate
waste collection expanded, the associated logistical and operational expenses increased
sharply. Conversely, although the volume of unsorted waste declined, disposal
costs rose, consistent with the interpretation that residual fractions are more
complex and costly to process. To assess whether cost increases reflected inefficiency
or technological progress, we estimate a non-parametric Malmquist index.
The results indicate substantial productivity gains in sorted waste management,
mostly from technological advancement, but also suggest transitional inefficiencies.
Our findings highlight the need for more integrated investment strategies to balance
environmental goals with fiscal sustainability.