ITALY’S NORTH-SOUTH DIVIDE: Patterns and drivers of regional income inequality, 1871-2001

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28 Mar 2015

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New research presents the first reliable estimates of Italy’s regional GDP over the past century and more. Among the findings of the study by Emanuele Felice, presented at the Economic History Society’s 2015 annual conference, is that in the second half of the twentieth century, the North-East and the centre of the country converged towards the North-West, while Southern Italy lagged behind. As a consequence, Italy is now divided into two halves: the Centre-North and the South.

Italy’s regional disparities are renowned throughout the world, in academia and beyond. In 1861, the unification of the peninsula was an event of paramount importance for the history of nineteenth century Europe. Southern Italy was the most backward part of the country and has remained so until the present day. What strikes the observer, however, is that it has gained a firm position as a paradigmatic case of a backward society − and there is probably no other part of the Western world that can boast such dubious fame.

Before unification, in 1851, William Gladstone had famously defined the southern kingdom as ‘the negation of God erected into a system of government’. Following unification, Alexander Dumas, one of the greatest novelists of his time, established himself in Naples and his regular reports helped to create the image of a savage south that was prey to organised crime, where ‘murder is just a gesture’.

Soon after, Italian scholars also began to discuss the questione meridionale (the problem of the South) − Benedetto Croce and Antonio Gramsci are some of the names who took part in the debate. This has continued up to the present day, and has spread to popular culture as well, including cinema and novels; prominent international scholars, from Edward Banfield to Robert Putnam, also delivered important works on the Italian North-South divide.

Up to recent years, however, such a remarkable interest contrasted with the lack of reliable information about the evolution of regional disparities − at least for what concerns the most important economic indicator, GDP (that is, income) per person.

By making profit of several and recent step forwards in this direction, this study for the first time presents reliable estimates of Italy’s regional GDP (at the NUTS II level), from 1871 to 2001. It also proposes a new interpretative hypothesis for the persisting North-South divide, which is based on long-lasting socio-institutional differences.

At a time when all of Italy was a poor country, regional differences in GDP were relatively mild. Since the late nineteenth century, they have increased, first at a slower pace and then, in the interwar years, with greater speed.

By the time regional inequality reached its peak, around 1951, Italy appeared to be divided into three thirds: the industrialised North-West, the regions of the North-East and Centre close to the Italian average, and the backward South.

In the second half of the twentieth century, the North-East and the Centre converged towards the North-West, while Southern Italy lagged behind: as a consequence, Italy is now parted into two halves, the Centre-North and the South.

The timing and modality of these patterns suggest that geographical factors and the market size played a minor role: for instance, the worst-performing Italian region is Campania, by far the most favoured in the South in terms of geographical position and market size.

Rather, the gradual converging of regional GDPs towards two equilibria seems to follow the social and institutional imbalances of pre-unification Italy: by 1861, there was a socio-institutional divide − in the levels of human and social capital as well as in the nature and functioning of the political and economic institutions − which was transferred to the new state, in different forms, and since then it has not been overcome (indeed, it has even been reinforced).

The paramount examples are organised crime in some southern regions regarding economic institutions, and the widespread cronyism in the south concerning the working of political institutions; both go along with the renowned differences in social capital. This socio-institutional divide appears to be the ultimate determinant behind Italy’s regional inequality.


Regional income inequality in Italy in the long run (1871–2001): patterns and determinants

Emanuele Felice
Universitat Autònoma de Barcelona

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