Siting Public Facilities: A Theoretical and Empirical Analysis of the Nimby Syndrome in Italy

The paper discusses the economic problem and the institutional features underlying the Nimby syndrome, and illustrates preliminary empirical evidence for Italy. It argues that siting procedures taking local preferences into account should be preferred when the heterogeneity in preferences across communities is greater than the heterogeneity in constructing and operating costs across sites. The elicitation of preferences is better pursued through auction-like mechanisms rather than multilateral negotiations if: the characteristics of the facility and the institutional context are such that credible information about the risks associated with the facility are available; conflicting preferences at the local level can be preliminarily aggregated; and compensations are mainly monetary. Empirical results suggest that the intensity of local opposition is greater when the perceived risk associated with the facility is higher and more concentrated, and the communication between different levels of government poor. The conflict between highly centralized siting procedures and highly decentralized administrative institutions, the difficulty of providing credible information about the risks associated with the facility, and low political commitment are identified as the critical points.