Institutional Shocks and Proximate Causes of Growth: Evidence From the Era of French Rule in Italy

This paper examines the effect of French political control during the Napoleonic period on proximate causes of growth across nineteenth-century Italy, finding a strong association between the intensity of French reforms and the accumulation of both social and human capital. We demonstrate that the effect induced by the French control is robust to geographical factors, to pre-French characteristics, and to the economic growth of Italian provinces during the nineteenth century. Then, we use exogenous variation in the provincial distance to Paris, from which French local armies received military and intelligence support to acquire and maintain control over conquered territories, turning correlations into causal relations. Our contribution unveils the existence of an institutional mechanism behind the differences in some important drivers of economic growth across Italian provinces prior to Unification.