Italy: toward a growth-friendly fiscal reform

Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balance by 2020, although concrete, high-quality measures to meet the target are yet to be specified. This paper seeks to contribute to the discussion by (1) assessing spending patterns to identify areas for savin...

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Bibliographic Details
Published in:Economia politica (Bologna, Italy) Italy), 2021, Vol.38 (1), p.385-420
Main Authors: Andrle, Michal, Hebous, Shafik, Kangur, Alvar, Raissi, Mehdi
Format: Article
Language:English
Subjects:
Economic Policy
Economic recovery
Economic theory
Economics
Economics and Finance
Fiscal policy
International Political Economy
Original Paper
Political economy
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Summary:Published in late 2017, the Italian medium-term fiscal plan aims to achieve structural balance by 2020, although concrete, high-quality measures to meet the target are yet to be specified. This paper seeks to contribute to the discussion by (1) assessing spending patterns to identify areas for savings; (2) evaluating the pension system; (3) analyzing the scope for revenue rebalancing; and (4) putting forward a package of spending cuts and tax rebalancing that is growth friendly and inclusive, could have limited near-term output costs, and would achieve a notable reduction in public debt over the medium term. Such a package could help the authorities balance the need to bring down public debt and, thus, reduce vulnerabilities while supporting the economic recovery.
ISSN:1120-2890
1973-820X
DOI:10.1007/s40888-020-00198-1