We study the political economy of transport infrastructure placement and its long-term impact, exploiting quasi-random variation in political factors. Using unique data from XIX-century Italy and deploying a regression discontinuity design, we focus on close races to show that towns in marginal districts supporting winning candidates were more likely to be reached by a railway. Using political alignment as a natural instrument for infrastructure placement, we then show that over the following century, services - rather than manufacturing - grew faster in connected municipalities. Our results also indicate that railways reached towns with lower growth prospects.
Pork, Infrastructure and Growth: Evidence from the Italian Railway Expansion
Bonfatti R.;
In corso di stampa
Abstract
We study the political economy of transport infrastructure placement and its long-term impact, exploiting quasi-random variation in political factors. Using unique data from XIX-century Italy and deploying a regression discontinuity design, we focus on close races to show that towns in marginal districts supporting winning candidates were more likely to be reached by a railway. Using political alignment as a natural instrument for infrastructure placement, we then show that over the following century, services - rather than manufacturing - grew faster in connected municipalities. Our results also indicate that railways reached towns with lower growth prospects.
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