‘Persistent Specialization and Growth: The Italian Land Reform’ with Riccardo Bianchi-Vimercati, and Giampaolo Lecce
Current Version:
Land distribution has ambiguous effects on structural transformation: large landowners can slow industrialization by limiting education provision, but larger scale and local market power might accelerate the mechanization of production. We examine the effects of redistribution from large to smaller landowners following the Italian 1950 land reform by exploiting novel fine-grained data and find that it reduced industrialization. Agglomeration forces emerge as a key driver, while education doesn’t appear as a likely channel. We show that agricultural specialization persisted for at least 50 years, and expropriated areas had lower income growth during 1970-2000.