Inter-municipal cooperation (IMC) offers the scale economies of larger jurisdictions while preserving local political autonomy, yet the literature has assessed it almost entirely through expenditure efficiency, overlooking state capacity and tax enforcement. We investigate whether pooling administrative functions through IMC reduces the municipal property tax gap in Italy. Using official tax gap estimates and an Inverse Probability Weighting (IPW) approach, we find significant heterogeneity. In the Center-South, where administrative capacity is lower, cooperation on core fiscal-administrative functions is associated with an approximately 6.3 percentage-point reduction in the tax gap, consistent with a catch-up mechanism. Conversely, the marginal effect in the more compliant North is statistically zero. A counterfactual simulation estimates that extending cooperation to untreated municipalities in the Center-South could recover approximately 290 million EUR annually. These findings highlight the value of targeted incentives aimed at low-capacity jurisdictions, where the potential to strengthen enforcement and maximize revenue recovery is highest.

This study evaluates whether asymmetric fiscal decentralization improves local revenue management in Korea. Jeju Special Self-Governing Province gained enhanced authority over local taxation under the Jeju Special Act in 2006. Using panel data for Korea’s upper-tier local governments (1996–2023), we apply the synthetic control method to estimate causal effects on the local tax ratio, tax collection rate, and accumulated arrears-to-total revenue ratio. The local tax ratio falls in 2006–2012 but rises thereafter, increasing by about 4.6 percentage points on average in 2013–2023 and significant at the 10% level. In contrast, collection and arrears indicators show no statistically significant improvement. Revenue autonomy can raise own-source revenue capacity, but improvements in revenue administration appear to require complementary accountability mechanisms.

Governments channel substantial fiscal policy through tax expenditures rather than through visible public spending, despite the well-known inefficiencies of tax expenditures. We argue that the politically relevant margin is not aggregate fiscal cost, but fragmentation into numerous legally distinct provisions, which reduces salience and weakens budget scrutiny. We develop a political-economy model with a rent-seeking firm, a vote-maximising politician, and a Treasury with enforcement capacity, micro-founding structural opacity as a function of the number of provisions. The model predicts that stronger Treasury enforcement unambiguously reduces fragmentation, while its effect on aggregate revenue foregone is theoretically ambiguous. Using a cross-country panel dataset from the Global Tax Expenditures Database and an instrumental-variables strategy based on the cultural substitution between exclusive family ties and generalised trust, we find that higher social capital significantly reduces the number of provisions but has no systematic effect on aggregate revenue foregone.

We study whether the effects of public demand depend on recipient firms' fundamentals. Using quasi-random variation in Italian public works allocation, we compare firms receiving similar public resources but differing in cost efficiency. More cost-efficient recipients experience about 70 percent higher productivity growth over three years, with stronger effects for smaller firms, larger awards, and local or lower-screening public bodies. Gains operate through business expansion: private revenues rise by 74 percent more, with no clear effects on borrowing, long-term debt, fixed investment, or future public activity. Simulations imply productivity gains of about 5 percent in the construction sector.