The Historical Roots of Corruption and Economic Development in Italy
AbstractWe claim that a sequential mechanism linking history to development exists: first, history defines the quality of social capital; then, social capital determines the level of corruption; finally, corruption affects economic performance. We test this hypothesis on a dataset of Italian provinces, and address the possible endogeneity of corruption by applying an IV model. We use three sets of historical instruments for corruption: 1) foreign dominations in 16th-17th century, 2) autocracy/autonomous rule in the 14th century, and 3) an index of social capital between in the 19th-20th century. The results indicate a significant impact of historically-driven corruption on development.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4212.
Date of creation: 2013
Date of revision:
corruption; economic development; institutions; social capital; history;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O43 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
- C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation
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