Effectiveness and efficiency of European Regional Development Fund on separate waste collection: evidence from Italian regions by a stochastic frontier approach

The purpose of the present paper is to analyze the results of the impact of European Regional Development Fund (ERDF) in Convergence regions over the 2007–2013 on separate collection rate of Italian regions. The aim is twofold: propose a groundbreaking analysis that allows us to control both for the effectiveness of the Regulation (EC) No. 1080/2006, by a Difference in differences equation (DID), and the Regions’ efficiency in the separate collection process, by a stochastic frontier analysis (SFA). Specifically, the SFA allows us to model the DID equation in order to take account the regions’ efficiency in the separate collection process in terms of institutional quality. In particular, we use a panel with two dimensions: temporal—9 yearly observations from 2004 to 2012; and cross-sectional—20 regions. The estimates suggest that ERDF have not contributed to reducing the structural divide in Italy and its managerial slack has triggered in the failure of the convergence objective. Policy implications are discussed.