To Privatize or to Centralize? An Empirical Analysis of Subnational Tax Collection Strategies

Subnational governments collect a non-trivial share of tax revenue, but the organization of that collection — kept in-house, contracted to private concessionaires, or centralized at the national level — varies sharply across Italian comuni and is poorly understood. To Privatize or to Centralize? compiles a panel of collection-organization choices for Italian municipalities and matches them to outcomes on revenue, enforcement effort, and compliance. The paper asks which arrangements deliver more revenue per euro of administrative cost and where the political-economy logic of each choice plays out.