Work in Progress

Electricity and the Geography of Industrial Development in a latecomer country: Italy, 1901-1911

with Roberto Ricciuti

Italy is one of the best candidates for studying the effects of electrification between the 19th and 20th centuries. A latecomer country to industrialization, it faced the hurdles of lacking coal in the age of steam. Thus, when the technology for long-distance electricity transmission became available, it invested heavily in hydropower. By 1911, 42.7% of Italy's installed industrial power came from hydroelectricity. Using methodologies rooted in new economic geography (NEG) and factor endowment theories, we analyze the location of industrial activity across Italian provinces during the census years 1901 and 1911. Our approach incorporates new data on provincial GDP, literacy, and energy stocks, enabling a fine-grained analysis at the NUTS-3 level. We evaluate the influence of electric power as a distinct factor alongside traditional determinants such as market potential, human capital, and energy intensity. Dependent variables include provincial shares of industrial employment and GDP, regressed on interactions between industrial and provincial characteristics. Findings highlight electricity as a decisive determinant of industrial location, with its influence growing markedly between 1901 and 1911. Alternative specifications and instrumental variable techniques confirm these results, underscoring electricity's transformative role in reducing Italy's dependence on water-powered manufacturing. These findings align with broader interpretations of electrification's role in enabling industrial diversification and regional economic development during the Second Industrial Revolution.

Please find the latest version of this paper here.

Feather-Handed Fascists: Surveillance as a Signal of Bureaucratic Loyalty

with Pau Grau-Vilalta and Lorenzo Vicari

How do authoritarian rulers enforce compliance amongst bureaucrats appointed by previous regimes?  Most explanations relate bureaucratic output to ideological alignment or expertise. This paper argues that it can be mainly driven by bureaucrats who need to signal their loyalty to the regime. We compile a province–year dataset for Fascist Italy (1922–40), originally digitising biographies and appointments of all 415 provincial prefects. We then link them to the universe of about 100,000 individual state surveillance dossiers. We exploit prefect mobility to estimate a staggered Difference-in-Differences design, with prefects that voluntarily joined the Fascist Party, particularly before it seized power, as treatment. The bureaucrats with this credible loyalty marker opened about 20 per cent fewer dossiers than career-appointed counterparts. After testing multiple alternative explanations, including competence and preferential deployment, we highlight that bureaucrats who were able to signal loyalty through party membership achieved comparable job security with lower surveillance and focused less on ``usual suspects", relative to career-appointed colleagues. The pattern aligns with loyalty-signalling motives: careerists, starting from lower loyalty priors, must work harder to secure their positions. These findings provide rare systematic evidence of authoritarian surveillance and show how career concerns, rather than ideology or competence alone, can be powerful drivers of coercive behaviour.

The Local Taxes on Consumption in Liberal Italy’s Municipalities, 1858-1900

Between 1864 and 1930, Italian municipalities were, on the one hand, responsible for the provision of basic public services such as primary education, healthcare, and infrastructure maintenance. On the other, they draw the vast majority of their revenues from taxes on consumption - the dazio consumo - and surcharges. This work extends the analysis to the fiscal policy mix: first, it proves that the collection methods for local excises depend, for a significant portion of municipalities, on local decisions. Second, local excises played an extremely relevant role in revenue formation for large, walled municipalities, in line with contemporary regulation. Third, it documents that old fiscal traditions dating to the Napoleonic period still played a role in forming fiscal revenues up to the turn of the century.

Draft available upon request

Italian Municipalities, Fiscal Capacity and the 1902 Reform of the Dazio Consumo

Between 1864 and 1930, Italian municipalities relied heavily on consumption duties to generate income. The largest municipalities collected these duties as tariffs at local customs borders, and this paper argues that high reliance on such duties, similar to high reliance on trade tariffs, indicates low fiscal capacity. Reducing reliance on consumption taxes by removing local customs borders can, therefore, be taken as a sign of future fiscal capacity building.  This study exploits a quasi-exogenous source of variation - the 1902 reform of the Dazio consumo in Italy - to investigate the long-term effects of a shock in fiscal capacity at the municipality level. Drawing on a novel dataset on municipal revenues and expenses focusing on ``closed'' municipalities (330 units) across six different years between 1884 and 1925, this paper finds that the reform, instead of prompting municipalities to build fiscal capacity, exposed those that had little ability to build it up in the first place.  To the author's knowledge, this is the first study of fiscal capacity that conducts a municipality-level analysis in a within-country setting.

Draft available upon request