The Financial Collapse of Local Bodies: the Case of the Municipality of Taranto

Abstract

The present work aims to offer a contribute for the evaluation of the opportunity to adopt strategies based on state support or, alternatively, on the managerial autonomy of local bodies in financial trouble. The research, after analyzing the main guidelines at European level and mentioning possible solutions currently laid down in Italian legislation, presents the results of an empirical investigation on the economic effects produced on the local economy by the collapse of the Municipality of Taranto. The choice of the city of Taranto is due both to the significant magnitude of the ascertained debt, which was one of the highest in the history of Italy, and to the considerable economic effects caused by the recovery procedure. Specifically, have been firstly examined the reasons which led to the collapse of the local public authority and the main aspects characterizing the administrative management of the passive mass besides the possible solutions for the definitive implementation of the recovery plan.