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.

Gentle Loyalists and Harsh Professionals: Repression as a Signal of Alignment 

with Pau Grau-Vilalta and Lorenzo Vicari

While significant progress has been made in understanding democratic consolidation and backsliding, the dynamics of autocratic consolidation remain less explored. Central to this process is the autocrat’s control over bureaucratic institutions, most importantly the policing apparatus. As theory suggests, autocrats face a trade-off between appointing competent officials and ensuring ideological loyalty, while bureaucrats must signal sufficient alignment to retain their positions. This paper examines this trade-off empirically in the context of Italy’s Fascist regime by leveraging individual-level data on people under police surveillance and a newly compiled dataset of historical chiefs of police (prefects). We find that prefects affiliated with the Fascist party engaged in less political repression than career-appointed prefects, suggesting that party membership reduced their need to signal loyalty through repressive actions. Further, we document the relationship between repression practices and prefects’ career trajectories, we characterise the individuals targeted for repression based on political leanings and profession, and we gauge how discriminate policing was by proxying the number of convictions. Our findings provide new empirical insights into a renewed debate on state capture by perspective rulers in nascent autocracies, suggesting that regime supporters might be less ruthless than their career-track counterparts.

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