Conference Agenda

Italy is highly exposed to hydrogeological risks, with floods and landslides affecting a large share of municipalities and imposing substantial fiscal costs on public authorities. This paper investigates whether political alignment between municipal governments and the central government influences the allocation of intergovernmental transfers following hydrogeological shocks. Using a panel of Italian municipalities from 2013 to 2022, we combine detailed data on weather-related disasters, emergency-related fund requests and disbursements, political affiliations of local and national officials, and socioeconomic controls. We estimate fixed-effects models to assess the relationship between political alignment, disaster occurrence, and public transfers. While political alignment alone does not appear to increase routine intergovernmental transfers, weather shocks are associated with a significant rise in transfers, averaging about 1.6 percent. Crucially, this effect is heterogeneous: municipalities politically aligned with the central government receive substantially higher transfers when hit by a hydrogeological event. Interaction estimates indicate that aligned municipalities obtain approximately 23–25 percent more transfers following a shock. Further analysis focusing on disaster-specific funding shows that politically connected municipalities receive significantly higher amounts of emergency funds and experience a markedly larger gap between funds received and funds requested—on the order of 33 percent. These findings suggest that political favoritism plays a significant role in the allocation of post-disaster public resources in Italy, amplifying fiscal disparities across municipalities in the aftermath of natural disasters.