Abstract

The essay analyses the evolution of the principal magnitueds in the activities of local authorities. The model examines (i) the determinants of investments and the choices associated with them, and (ii) the management of local services with reference to the resources involved and the capacity to plan and manage local taxation (considered to be a simple adjustment variable). The study raises an original analytical challenge, in that estimation of the econometric model pre-supposes that local authorities decide their strategies according to the evolution of the overall socio-economic context and the availabiliy of resources, and not according to directives issued by the central administration, as happens in the case of state policy. The usefulness of the study will grow more and more evident as local financial autonomy increases.