Congressional earmarks have a multiplier of 1.2-1.4

A study of well matched fiscal shocks to Italians provinces (counties) was accomplished in a paper that has been floating around that one can read here.  Krugman refers to it.

The economists looked a fiscal shocks that happen to Italian provinces when the Italian central government takes over from corrupt officials.  When the central government investigator has evidence of mafia corruption in an Italian provincial government, the central government will take over the local government, shut down all local government investment, then restart the investment again only as the mafiaoso are run out of town.

So far so good, the researchers have clear instances of a negative fiscal shock in isolated Italian provinces.  They can answer the question, what happens to general private sector activity when local government goes through a sudden shutdown.  I bring up earmarks because the study most closely resembles the shutting down of Congressional earmarks going directly to a Congressional districts.

Good work actually.  What do I take away?  Local governments are well instrumented to manage local projects with local direct management (even if they are corrupt) .  Earmarks to Congressional districts are likely to have good multipliers.