long-run effects of radical institutional change
Federico Asta (Author), Lela Mélon (Author), Rok Spruk (Author)

Abstract

We examine the effect radical institutional change on long-run growth through the case of the partition of Friuli Venezia Giulia in 1947 between Italy and Yugoslavia and the subsequent integration in two distinct institutional regimes. Friuli Venezia Giulia's long-run development trajectory is matched through a novel dataset with other countries on pre-1947 growth and development characteristics, producing a plausibly exogenous source of variation in the absence of the unification. By using the long- run growth and development paths of other countries for the period 1871-2016, we construct a plausible counterfactual scenario, showing pervasive and substantial long-run growth benefits of Italian unification. In the absence of unification, Friuli Venezia Giulia's per capita income would be 41 percent lower and Yugoslav-controlled Littoral would have 32 percent higher per capita income if it had joined Italy. A battery of large- sample placebo distributions and permutation tests confirm the significance of the 1947 border partition for long-run economic growth.

Keywords

long-run development;institutional change;synthetic control method;Italy;

Data

Language: English
Year of publishing:
Typology: 1.01 - Original Scientific Article
Organization: UL EF - Faculty of Economics
UDC: 321
COBISS: 69518851 Link will open in a new window
ISSN: 2667-3193
Views: 319
Downloads: 92
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Other data

Secondary language: English
Type (COBISS): Article
Pages: 20 str.
Volume: ǂVol. ǂ2
Issue: ǂart. ǂ100008
Chronology: Summer 2021
DOI: 10.1016/j.jge.2021.100008
ID: 13140570
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