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Trento Festival – Italian nepotism: a family member in politics is worth 500 euros more a year

Festival of Economics in Trento - A research on Italian nepotism by Manacorda and Gagliarducci documents that the presence of a family member in politics is good for the salary and is worth at least 500 euros more a year - In the second term of the politician, the benefit rises to a thousand euro – North beats South

Trento Festival – Italian nepotism: a family member in politics is worth 500 euros more a year

Family nepotism is not just an Italian prerogative. The chronicles have offered us numerous ideas also abroad. However, it is true that in Italy family ties play a particularly important role: the intensity of family ties, according to OECD data, is the highest among European countries. It is no coincidence that there is a widespread feeling that having a family member in politics can lead to some positive repercussions.

Now a study by two economists, previewed at the Trento Festival of Economics, for the first time in Italy tries to move from suspicion, from journalistic investigation, to research conducted in an objective, scientific way and on highly consistent. With the aim of demonstrating how "worth" having a relative in politics.

Marco Manacorda, professor of Economics at Queen Mary University of London and Research Associate at the CEP at the London School of Economics, and Stefano Gagliarducci, associate professor at the Department of Economics and Finance at the University of Rome Tor Vergata, collected the data (surnames , tax codes and municipality) of 550 politicians and 800 employees, discovering that having a family member in politics is worth an average of 500 euros more a year.

"The data are clear and evident - said Manacorda - even if from our point of view, as researchers, there is no direct evidence that these returns are the result of an implicit or explicit exchange between politicians and private companies".

IF 500 EUROS SEEMS FEW TO YOU
IN THE NORTH THE ADVANTAGE IS MORE EVIDENT

The study investigated what happens in terms of remuneration five years before and five years after a family member first enters politics. “Until time zero, that is, before entering politics – underlined Manacorda – salaries do not differ much from those of other individuals with similar characteristics.

Starting from time zero, the increase in returns is gradual and this effect seems to flatten out towards the third year, to then return to the previous situation after leaving the family policy”. Five hundred euros gross is the average value of the benefit obtained by each family member "connected" to the "neo-politician". It starts from zero in the first year and then grows until it even exceeds 2.000 euros. 

"It seems to us that we are talking about a considerable phenomenon - explained Gagliarducci - especially when compared with the return of education in Italy". For comparison, according to OECD data, an additional year of education generates a return of 6%. 

Not only. If the politician is in his second mandate, the average rises to 1.000 euros a year and reaches up to 1.700 euros a year if the politician has been in office for more than two mandates. The maximum benefit, just over 1.000 euros a year, is recorded in family members between 36 and 45 years of age, while it decreases as age increases. 

What surprises the two economists, compared to the initial hypotheses, is the geographical breakdown that emerges from the study. In this sense, North "beats" South. A family member in the municipal council seems to bring more benefit in the regions of Northern Italy. "Contrary to our initial hypotheses - highlighted Manacorda and Gagliarducci - the effect seems to be stronger in the Centre-North than in the South".

And the advantage is most evident in cities where there is a courthouse, probably because in these cases nepotism functions as a substitute for pure corruption. “It could mean – observed Manacorda – that where there is more control, the cases of corruption and embezzlement are less frequent and therefore substitute mechanisms come into play such as that of nepotism linked to political offices”.

RESEARCH, SURNAMES AND TAX CODES
97% OF POLITICIANS BELONG TO THE MUNICIPAL COUNCIL 

The research is ongoing and the full data report will be available in about a month. The analysis starts from 1985, before "Mani Pulite" and goes up to 2011. Twenty-seven years in which two distinct databases were connected: one on politicians (550, source Ministry of the Interior) for 97% belonging to councils municipal authorities and one on employees in the private sector (800, source INPS). These two samples were then connected through the first three digits of the tax code (part of the surname) and the city of birth.

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