Research

Janus Faces of Progress: Evaluating the dual strategy of the Cassa per il Mezzogiorno for Regional Development, 1950-1984

Working Paper

This paper evaluates the long-run impact of the Cassa per il Mezzogiorno (CasMez), a state development bank active from 1950 to 1984, which aimed to reduce the economic divide between Northern and Southern Italy. Leveraging newly digitized microdata from CasMez archives, municipal statistics, voting patterns, geographic data, and a custom-reconstructed historical road network, the study estimates the causal effects of CasMez’s dual funding streams—industrial credit to private firms and public infrastructure investment. Using Marginal Structural Models, Propensity Score Matching, and Subclassification, the analysis finds that industrial lending generated sustained industrial growth, while infrastructure investments had limited impact unless implemented through coordinated, multi-stakeholder plans targeting clearly measurable outcomes. The results highlight the greater effectiveness of market-aligned interventions over standalone public investment in driving local development.

Banking on the South: The Impact of CasMez’s Funding Strategies on Southern Italian Firms

Working Paper

This paper examines the effectiveness of subsidized industrial credit in promoting firm growth in postwar Southern Italy, where long-term loans were provided exclusively by public institutions at capped interest rates. Using custom machine learning tools, I develop an automated pipeline to construct a unique 15-year panel of firm-level financial data from archival records. Leveraging event-study methods robust to staggered treatment timing, I find that subsidized credit led to lasting improvements in firms’ ability to leverage fixed assets to generate profits. These effects are only detectable when analyzing cumulative outcomes, which motivates the development of a simple theoretical framework to formalize their identification. This framework enables clear estimation of causal effects, showing that subsidized credit led firms to expand their asset base and improve their ability to generate profits. However, complementary evidence indicates that the program operated under binding credit rationing constraints, limiting access for many potentially eligible firms and thereby dampening its broader impact on local economic growth.

Paving the Way: Highway Access and the Reconfiguration of Local Labor Markets in Italy

Working Paper

With Sara Bagagli, LSE

This paper studies how large-scale transport infrastructure affects the sectoral structure and spatial integration of local economies. It exploits the staggered rollout of Italy’s national highway network between 1955 and 1975, combined with industrial census data spanning 1951–2001. Using a custom built algorithm, we also reconstruct the historical road network from archival maps for the same period, producing a high-resolution dataset that captures changes in inter-municipal connectivity over time. This enables the calculation of accurate, period-by-period pairwise distances between municipalities. These distances are then used to infer connectivity patterns through network analysis. By applying community detection algorithms, we identify evolving local labor markets based on dynamic road access across periods. The analysis shows that highway access reduced industrial specialization by anchoring municipalities more firmly within their regional labor market communities. When municipalities did switch communities, they tended to adjust their industrial composition accordingly. These findings reveal how infrastructure-induced market integration reshapes both internal economic structure and external linkages.