Abstract
This short essay looks at the interactions between history and economic development mediated by regional policy. We focus on Italy and present case studies based on the Cassa per il Mezzogiorno, a major intervention aimed at developing Italy’s South that was implemented over the second half of the twentieth century. We argue that historically-driven differences in local institutions were able to explain a large portion of the heterogeneous effects of the program. We also show that Cassa per il Mezzogiorno was able to permanently change the citizens’ preferences for redistribution and state interventions.
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Notes
Similarly, Giuliano and Spilimbergo (2014) underscore the importance of the historical macroeconomic environment: those who experienced a recession when young tend to believe that economic success depends more on luck than effort and support redistribution more.
Since 1994, the European Union devotes at least 17 billion euros per year to policies aimed at fostering convergence by lagging regions (Becker et al. 2010); interregional transfers in Italy are roughly 4 per cent of aggregate GDP, a figure that is in line with other countries characterized by large internal disparities (Spain, Germany).
In a cross-European regions exercise, Accetturo et al. (2014) provide evidence that EU transfers, namely structural funds targeted to underdeveloped regions, might have impacted negatively on the endowments of trust and cooperation of the receiving areas; the effect is entirely driven by regions characterized by low quality of government as measured by the Goteborg index (Charron et al. 2014).
In per capita terms, CasMez expenses amounted to roughly 200 real euros (2011 prices) yearly. They compare well with other very generous regional policies, such as the EU Structural Funds Program (1989-current; Becker et al. 2010) and the German Zonenrandgebiet (1971–1990; von Ehrlich and Seidel 2018).
See Law n. 634/1957 and Law n. 555/1959.
See Law n. 717/1965 and Law n. 853/1971.
The CasMez was formally dismantled in 1984 and replaced by another state-owned agency called AgenSud (Agenzia per la promozione e lo sviluppo del Mezzogiorno), which remained in place until the termination of the program in 1992.
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We thank two anonymous referees for very helpful comments. The views and the opinions expressed in this paper are those of the authors and do not necessarily reflect those of the institution with which they are affiliated.
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Accetturo, A., de Blasio, G. History and regional policy: some reflections on Italy’s Cassa per il Mezzogiorno. Rev Reg Res 42, 269–277 (2022). https://doi.org/10.1007/s10037-022-00173-2
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DOI: https://doi.org/10.1007/s10037-022-00173-2