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Interest Groups and Government Spending in Italy, 1876-1913

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  • Nadia Fiorino
  • Roberto Ricciuti

Abstract

In the last two decades of the XIX century Italy became an industrial country. Historians maintain that this process was affected by the action of some interest groups that pursued both state protection from competition and specific public expenditure programs. Starting from the economic literature of interest groups, this paper attempts to empirically investigate the role of the interest groups in public expenditure decisions in Italy from 1876 to 1913. We argue that a proper indicator of the role of interest groups is their output. The analysis suggests that government spending was sensitive to the preferences of heavy industry rather then those of textile and cereal cultivators. We therefore highlight the role of the political process in setting economic policy at the early stages of Italian development.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2722.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2722

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Keywords: special interest groups; public expenditure; Italian economic history;

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References

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  1. Potters, J.J.M. & Sloof, R., 1996. "Interest groups: A survey of empirical models that try to assess their influence," Open Access publications from Tilburg University urn:nbn:nl:ui:12-73373, Tilburg University.
  2. Federico, Giovanni & Tena, Antonio, 1998. "Was Italy a protectionist country?," European Review of Economic History, Cambridge University Press, Cambridge University Press, vol. 2(01), pages 73-97, April.
  3. Becker, Gary S, 1983. "A Theory of Competition among Pressure Groups for Political Influence," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 98(3), pages 371-400, August.
  4. Meltzer, Allan H & Richard, Scott F, 1981. "A Rational Theory of the Size of Government," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 89(5), pages 914-27, October.
  5. Michele Fratianni & Franco Spinelli, 1982. "The growth of government in Italy: Evidence from 1861 to 1979," Public Choice, Springer, Springer, vol. 39(2), pages 221-243, January.
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  7. Aidt, T.S. & Dutta, Jayasri & Loukoianova, Elena, 2006. "Democracy comes to Europe: Franchise extension and fiscal outcomes 1830-1938," European Economic Review, Elsevier, Elsevier, vol. 50(2), pages 249-283, February.
  8. Gardner, Bruce L, 1987. "Causes of U.S. Farm Commodity Programs," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 95(2), pages 290-310, April.
  9. Potters, J.J.M. & Winden, F.A.A.M. van, 1996. "Models of interest groups: Four different approaches," Open Access publications from Tilburg University urn:nbn:nl:ui:12-73372, Tilburg University.
  10. Giovanni Federico & Antonio Tena Junguito, 1998. "Did trade policy foster Italian industrialization evidences from the effective production rates 1870-1930," Working Papers in Economic History wh985504, Universidad Carlos III, Departamento de Historia Económica e Instituciones.
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  12. Federico, G. & O'Rourke, K.H., 1999. "Much Ado About Nothing? Italian Trade Policy in the late 19th Century," Papers, College Dublin, Department of Political Economy- 99/18, College Dublin, Department of Political Economy-.
  13. Federico Giovanni, 2003. "Le nuove stime della produzione agricola italiana, 1860-1910: primi risultati e implicazioni," Rivista di storia economica, Società editrice il Mulino, Società editrice il Mulino, issue 3, pages 359-382.
  14. Shyam Kamath, 1989. "Concealed takings: Capture and rent-seeking in the Indian Sugar Industry," Public Choice, Springer, Springer, vol. 62(2), pages 119-138, August.
  15. van Winden, Frans, 1999. " On the Economic Theory of Interest Groups: Towards a Group Frame of Reference in Political Economics," Public Choice, Springer, Springer, vol. 100(1-2), pages 1-29, July.
  16. Congleton, Roger D & Shughart, William F, II, 1990. "The Growth of Social Security: Electoral Push or Political Pull?," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 28(1), pages 109-32, January.
  17. Guttman, Joel M, 1978. "Interest Groups and the Demand for Agricultural Research," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 86(3), pages 467-84, June.
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