Administrative capacity and speed of public spending

Sara Moccia (Federico II)
Alfredo Del Monte (Federico II)
Alessandro De Iudicibus (University of Campania Luigi Vanvitelli)
Luca Pennacchio (Parthenope University)

Abstract

Local institutions are crucial in fostering economic progress. This article assesses the impact of administrative capacity on the speed of public spending at several levels of government. Administrative capacity serves as a foundation for institutional quality and plays a critical role in enhancing the efficiency of local institutions in providing public services and managing finances. Using a sample of about 60,000 public projects co-funded by European funds in the period 2010-2019, the empirical analysis considers ‘internal’ and ‘external’ administrative factors contributing to spending speed. Project duration is used as an inverse proxy for spending speed. Preliminary results highlight the fundamental role of administrative capacity and institutional quality in shaping spending speed, with administrative capacity mediating the impact of institutional quality.

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