In this paper, I assess the existence of a political connection premium for Italian municipalities during the so-called “Second Republic” (1991–2011). The early 1990s witnessed a seminal event in Italian political history with the “Mani Pulite” (“Clean Hands”) investigation following the fall of the Berlin Wall. Subsequently, major political parties dissolved, culminating in a bipolar political landscape characterized by cyclical alternation between center-right and center-left factions (extending until at least 2011). Exploiting population data on small and medium-sized Italian municipalities between 1991 and 2011, I found that “politically connected” municipalities showed a population premium of about 2.5% compared to “non-politically connected” ones. The results are robust to NUTS-3 fixed effects, to a comprehensive set of controls, and to a full set of robustness checks. The relationship is confirmed using aggregate municipal income data as an additional proxy of local economic growth. Over and above this, social capital and the quality of local institutions seem to play a pivotal role in enabling the political connection. Election-related checks suggest the connection as two-way: using municipal data from the 2013 and 2018 general elections, I found that the treated municipalities depicted a higher turnout and fewer populist votes.

Following the seminal paper from Ostrom et al. (1961) , there is a large theoretical and empirical literature on polycentrism versus consolidation -sometimes called "the reform tradition" or "gargantua" -in economics, public administration, and regional science. The reform tradition or gargantuan tradition emphasizes economies of scale and enhanced coordination through the simplification of collective action. The polycentrist tradition tends to emphasize the use of local knowledge, experimentation, and the opportunities for self-governance that come from decentralization and competition. Research on polycentrism vs. gargantua largely focuses on efficiency, with a smaller number of papers focusing on equity. In the aftermath of Hurricane Katrina, a growing literature on how metropolitan communities rebound from crises arose. While this literature utilizes insights from the polycentrism vs. gargantua literature, its primary focus is on case studies of individual communities embedded in a larger metropolitan area. There is very little in the post-disaster recovery literature on the role of municipal governance structure on community rebound and resiliency. These aspects of crises and community resilience make the topic an excellent fit for Economics of Governance, which motivates this special issue on Crises and Community Resilience. The special issue contains four papers addressing a number of interesting governance issues on crises and community resilience. Two articles study the effects of

This paper aims at contributing to a better understanding of the conditions of self-enforcing democracy by analyzing the recent wave of autocratic transitions. Based on a game-theoretic framework, we work out the conditions under which governments may induce the diverse public authorities to coordinate on extra-constitutional activities, eventually transforming the politico-institutional setting into one of autocratic rule. We find three empirically testable characteristics that promote this coordination process, namely: populism and public support, corruption, and a lack in the separation of powers. By contrast, low degrees of corruption and strongly separated powers can be viewed as prerequisites to self-enforcing democracy.

The Covid-19 pandemic is one of the most powerful examples of negative externalities in local communities, entire countries and across the globe, calling for the coordination of policies at all levels. We focus on the role played by institutions at the country level in fighting the spread of Covid-19 by making policy coordination more difficult or, on the contrary, more effective. Specifically, we consider the type of political regimes, political fragmentation, and decentralization settings, after controlling for several non-institutional factors. We assemble several data sources with the most recent available information on Covid-19 performance for up to 113 countries around the world. Our main results, which are robust to alternative specifications, show that having either democracies or autocracies does not represent a crucial issue for successfully addressing the pandemic. Most significantly, we find that countries with centralized political parties, which fundamentally allow for better coordination at the national level, perform significantly better than those with decentralized political parties. Although federal countries do appear to have had consistently greater difficulties than unitary countries, a finding that fits well with the role of coordination, overall, the role played by fiscal and administrative decentralization is not robust, but this latter is a result conditioned by the lack of data availability.

Among the determinants of economic freedom, the presence of different ethnic groups within a country has sometimes been explored by the empirical literature, without conclusive evidence on the sign of the relation, its drivers, and the conditions under which it holds. This paper offers new evidence by empirically modelling how ethnic fragmentation is related to economic freedom, as measured by the Economic Freedom Index and by each of its numerous areas, components and sub-components. The results provide insights on the components driving the effect and, interestingly, detect notable differences between developed and developing countries.

Ensuring compliance with the tax laws is an enduring challenge for all governments. However, the methods by which governments enforce the tax laws, and by which individuals and firms evade their taxes, change over time, due at least in part to changing technology. In this paper I examine how changing technology, especially changes driven by the transformation of information into digital formats for use by computers, seems likely to affect tax evasion in the years ahead. I argue that many of these changes in technology will improve the ability of governments to decrease tax evasion, mainly by increasing the flow of information to governments. However, I also argue that these changes in technology will open up new avenues by which some individuals and some firms can evade (and avoid) taxes. At this point it is unclear which trend will dominate, so that the effects of technology on the overall level of tax evasion are uncertain. Even so, I believe that the distributional effects of these technological changes are more predictable, given the differential effects of technology on the abilities of individuals of different levels and types of income to evade their taxes. Indeed, I argue that changing technology will make evasion increasingly difficult for most taxpayers, especially those subject to employer withholding and third party information reporting, but that evasion will be increasingly viable for a small number of taxpayers, especially very high income taxpayers. Regardless of the overall impact of technology on the level of tax evasion, I conclude that the effects of technology will likely increase economic inequality.

How society should deal with the self-strengthening Tech Giants is a much-discussed issue. We suggest to democratize them by giving users a say in their decisions. With newly-developed collective decision rules and user councils, democratization of Tech Giants becomes feasible and complements, e.g., competition and basic data protection laws.