Political favouritism and inefficient management: Policy-makers’ birth town bias in EU quality certifications

Abstract

In the current era of EU-driven strategies for sustainable local development, the EU Commission has designated the geographical indication (GI) policy as a flagship initiative in 2024. The certification procedure has been simplified, with increased involvement from national and local authorities. This study explores the potential impact of reforms on GIs in Italy, focusing on whether the birthplaces of regional council members receive preferential acknowledgment. Analysing municipal-level data, we employ a Difference in Differences approach and machine learning for counterfactual analysis. Results indicate a higher likelihood of GIs for councillors' birth municipalities, particularly in areas with lower ex-ante institutional quality. These findings underscore the potential consequences of EU reform, warning against political favouritism and inefficient policy management.