Enlightenment And The Long-Term Persistence Of The Habsburg Administrative Tradition

We study the long-term, persistent effects of the Enlightenment-inspired administrative reform introduced by the Habsburg Monarchy in 1755 to analyze current administrative efficiency differentials in Northern Italy. We exploit exogeneity in the frontier established in 1748 by the Treaty of Aix-la-Chapelle between the Habsburg-ruled Duchy of Milan and the neighboring territories ruled by the Savoy House. The Habsburgs extended to all land taxpayers—through the Convocato institute—the right of nominating local civil servants and deciding on taxation and public spending, while maintaining the external control through a state representative. By contrast, the municipalities ruled by the Savoy House were subject to a highly centralized system in which local civil servants were nominated by—and were under the control of—the Intendente, who was appointed directly by the King. Using spatial regression discontinuity and employing an original dataset combining current and historical municipality-level data, we find a persistent positive effect of the Habsburg reform on current administrative efficiency. Our evidence shows that Habsburg- ruled municipalities provide more public goods and services while spending as much as Savoy House-ruled ones. We interpret our results through a model of persistence of an administrative tradition driven by a within-institution “bureaucracy enculturation” mechanism. We model the transmission over time of administrative values, norms, and practices within an institution without the need of differences in cultural values within the underlying population.