Local Public Spending and Urban Sprawl : Analysis of This Relationship in the Veneto Region of Italy

This paper describes and analyzes an Italian case of urban sprawl in the central area of the Veneto Region, which covers about 3,700 square km and 145 municipalities. The main aim of this paper is to find out if urban sprawl influences local public spending. Data for the economic analysis came from the local balance sheets of the 145 municipalities for the year 2007. In particular, the costs of the main public services sustained by the municipalities such as public transport, road and street maintenance, waste management, and water and sewer services were analyzed. This paper estimates the impact of urban sprawl, measured, for example, as total urban density or urban fragmentation, on a variety of current expenditures using the method of instrumental variables (IV); and, specifically, two-stage least squares (2SLS) analysis. The results show that discontinuous and fragmented development patterns, calculated as the number of urbanized polygons in each municipality, are, in general, more expensive. The same results were found when were separately estimated specific expenditure functions such as the costs for providing road and transport services and environmental services such as waste collection and water services. A larger urbanized territory, combined with a discontinuous development, implies higher per capita infrastructure and environmental expenditures.