Yardstick competition in Italian waste legislation targets: How much does the type of neighbour matter?

Italian environmental laws set targets for separate waste collection (SWC) in a top-down public decision-making approach. This study uses quarterly data (2002Q1-2019Q1) on the 103 Italian provinces to investigate whether the targets activate a yardstick competition (YC) mechanism in SWC. Applying a two-regime spatial Durbin model, this study demonstrates that YC emerges in the sub-periods defined by target levels (35%, 45% and 65%) when using an inverse geographical distance matrix. Conversely, YC does not arise when proximity is defined in economic and institutional quality terms. Finally, the study proposes policy implications.