Declining Free Lunch: State Capacity and Foregone Public Spending
Sarah Fritz, Lorenzo Incoronato, Catherine van der List
RFBerlin Discussion Paper,
No. 67,
2025
Abstract
This paper documents substantial fiscal waste in the context of one the world’s largest regional development programs – the EU Cohesion Policy. We study Italy, and find that 20% of funding commitments are never paid out and funneled into unfinished or never-started projects. In our setting, this happens for reasons unrelated to fiscal constraints – municipalities appear to simply leave money on the table. Foregone spending is more prevalent in Southern regions, but there is also stark variation across municipalities within regions. We show that such under-utilization of available funds is strongly associated with limited administrative capacity of local governments.
Read article
Understanding CSR Champions: A Machine Learning Approach
Alona Bilokha, Mingying Cheng, Mengchuan Fu, Iftekhar Hasan
Annals of Operations Research,
Vol. 347 (April),
2025
Abstract
In this paper, we study champions of corporate social responsibility (CSR) performance among the U.S. publicly traded firms and their common characteristics by utilizing machine learning algorithms to identify predictors of firms’ CSR activity. We contribute to the CSR and leadership determinants literature by introducing the first comprehensive framework for analyzing the factors associated with corporate engagement with socially responsible behaviors by grouping all relevant predictors into four broad categories: corporate governance, managerial incentives, leadership, and firm characteristics. We find that strong corporate governance characteristics, as manifested in board member heterogeneity and managerial incentives, are the top predictors of CSR performance. Our results suggest policy implications for providing incentives and fostering characteristics conducive to firms “doing good.”
Read article
Media Response
Media Response February 2026 IWH: »Rosenkrieg« ums Arbeitszeugnis (Bericht mit Bezug auf IWH-Insolvenztrend) in: Guter Rat, 12.02.2026 IWH: WIRTSCHAFT (Meldung mit Bezug auf…
See page
Halle Institute for Economic Research
Labour Markets: Sharpened Focus With the new name, the Department places its research focus on labour economics at the centre. Core topics remain structural change, wages,…
See page
Research Articles
Research Articles Explore cutting-edge research based on CompNet’s micro-aggregated firm-level data and related analytical tools. These articles cover empirical and theoretical…
See page
Alumni
IWH Alumni The IWH maintains contact with its former employees worldwide. We involve our alumni in our work and keep them informed, for example, with a newsletter. We also plan…
See page
Macroeconomic Reports
Macroeconomic Reports Local and global: IWH regularly provides current economic data – be it about the state of the East German economy, the macroeconomic development in Germany…
See page
East Germany
The Nasty Gap 30 years after unification: Why East Germany is still 20% poorer than the West Dossier In a nutshell The East German economic convergence process is hardly…
See page
Supervision and Research
Supervision and Research Research A dissertation is, of course, first and foremost an individual endeavour which, in addition to the purely intellectual demands, also requires a…
See page
Alumni
Alumni IWH provides guidance and support in job placement after graduation, including letters of recommendation and career advice. Graduates have found placements in academia…
See page
