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Reconstruction Aid, Public Infrastructure, and Economic Development: The Case of the Marshall Plan in Italy

Published online by Cambridge University Press:  02 May 2023

Nicola Bianchi  and
Michela Giorcelli
Nicola Bianchi
Affiliation:
Assistant Professor, Kellogg School of Management, Northwestern University, 2211 Campus Drive, Evanston, IL 60208, and NBER. E-mail: [email protected].
Michela Giorcelli*
Affiliation:
Associate Professor, Department of Economics, University of California – Los Angeles, 9262 Bunche Hall, Los Angeles, CA 90095, and NBER.
*
E-mail: [email protected]
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Abstract

The Marshall Plan (1948–1952) was the largest aid transfer in history. This paper estimates its effects on Italy’s postwar economic development. It exploits differences between Italian provinces in the value of reconstruction grants they received. Provinces that could modernize their infrastructure more quickly experienced higher increases in agricultural production, especially for perishable crops. In the same provinces, we observe larger investments in labor-saving machines, the entry of more firms into the industrial sector, and a larger expansion of the industrial and service workforces.

Type
Article
Information
The Journal of Economic History , Volume 83 , Issue 2 , June 2023 , pp. 501 - 537
Copyright
© The Author(s), 2023. Published by Cambridge University Press on behalf of the Economic History Association

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Footnotes

We thank Ran Abramitzky, Andy Atkeson, Paula Beltran, Thor Berger (discussant), Nicholas Bloom, Meghan Busse, Dora Costa, Pascaline Dupas, François Geerolf, Adriana Lleras-Muney, Gabriel Mathy (discussant), Therese McGuire, Katherine Meckel, Juan Morales (discussant), Melanie Morten, Tommaso Porzio, Nancy Qian, Melanie Wasserman, and seminar and conference participants at UCLA, Northwestern, UC–San Diego, UC Berkeley, IFN Stockholm Conference, Barcelona GSE Summer Forum, the Cliometric Society Annual Conference, the NBER DAE Summer Institute, the Banque de France–Paris School of Economics International Macro in Historical Perspective Workshop, the 2018 EHA meeting, and the 2021 SED meeting for helpful comments. Jiarui Cao, Lorenzo Cattivelli, Antonio Coran, Zuhad Hai, Jingyi Huang, Matteo Magnaricotte, and Fernanda Rojas Ampuero provided excellent research assistance. We gratefully acknowledge financial support from the Economic History Association through the Arthur H. Cole Grant.

References

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