Bono malum superate : long-run effects of radical institutional change

Asta, Federico (author), Mélon, Lela (author), Spruk, Rok (author)

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.

• Language: English
• Keywords: long-run development, institutional change, synthetic control method, Italy
• Work type: Article
• Typology: 1.01 - Original Scientific Article
• Organization: EF - School of Economics and Business
• Publication status: Published
• Publication version: Version of Record
• Year: 2021
• Number of pages: 20 str.
• Numbering: Vol. 2, art. 100008
• PID: 20.500.12556/RUL-128503
• UDC: 321
• ISSN on article: 2667-3193
• DOI: 10.1016/j.jge.2021.100008
• COBISS.SI-ID: 69518851
• Publication date in RUL: 15.07.2021

Record is a part of a journal

• Title: Journal of government and economics
• Publisher: Elsevier
• ISSN: 2667-3193
• COBISS.SI-ID: 69503235

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• License: CC BY-NC-ND 4.0, Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International
• Link: http://creativecommons.org/licenses/by-nc-nd/4.0/
• Description: The most restrictive Creative Commons license. This only allows people to download and share the work for no commercial gain and for no other purposes.
• Licensing start date: 03.07.2021