Abstract

The large body of new statistical data that became available after the 150th anniversary of Italy’s unification permits a re-examination of Italy’s economic growth. Up-to-date estimates and re-interpretations of Italy’s gdp from 1861 to 2011—at both the national and regional levels—in the light of institutional and technological changes within an international context find that Italy’s economic growth was substantial early in the twentieth century but slackened considerably since the 1990s, despite successes in long-term performance. Analysis suggests that the country is on the road to irreversible decline. Part of the problem lies in the failure of the southern regions to converge economically with the more highly developed central and northern regions.

Throughout the course of its history, Italy has undergone several ages of prosperity and decline. In ancient times, Rome was the most advanced country of the world. According to Maddison, at the time of the Emperor Augustus’ death (14 a.d.), the Italian peninsula was (by far) the richest Roman province of the Mediterranean basin. Although Maddison’s reconstruction of gross domestic product (gdp) during the ancient Roman period is clearly adventurous from a methodological standpoint, the evidence from ancient sources corroborates Maddison’s findings; most scholars acknowledge Italy’s primacy by the apex of the Roman Empire. Conversely, the subsequent centuries were bleak, characterized by long swings of economic depression. Signs of recovery are not in evidence until the tenth century.1

For the Middle Ages and the early modern period, the gdp estimates produced by other economic historians are equally uncertain. The earliest long-run series for per capita gdp of the Italian peninsula date back to 1300. They show that by the early 1300s, Italy had returned to a leading role, at least in the European context. According to Cipolla’s thesis, the Italian economy of the early Middle Ages had a mastery of the most advanced technology of the times. With the advent of the modern age—after, say, 1500—the overall gdp of the Italian economy started to rise, but it was accompanied by an even greater increase in the population, resulting in a slow decline in per-capita income. Despite an overall downward trend, Italy ranked among the most advanced countries until the mid-1700s when the gap between it and other Western European countries began to grow: “Things changed after 1750. For more than a century, with very short interruptions, the Italian economy experienced a decline which was at once absolute and relative.”2

At the time of its political unification (1861), Italy was a relatively backward country, located on the European “periphery.” Yet, after an impressive revival, which took place mostly during the second half of the twentieth century, Italy managed to reach the “center” of the world economy. Statistics from the Organization for Economic Co-operation and Development (oecd) show that in gdp per person at market exchange rates, Italy temporarily overtook Great Britain in 1987; Maddison found that in gdp per person at purchasing power parity (ppp, 1990 international Geary-Khamis dollars), Italy overtook Great Britain in 1991. In the recent past, however, Italy’s economic performance has been disappointing, by any standards. Since the early 1990s, economic growth has come to a halt; most socioeconomic indicators reveal the country to be sliding down the chart, suggesting to many that a new phase of economic decline might well be underway.3

Scholars disagree about interpretations of Italy’s economic performance not only during the entire post-unification history but also during specific periods. Fenoaltea called the years from unification until World War I a “failure,” whereas Federico termed the years from unification until World War II a “little-known success story.” Zamagni expressed a generally optimistic view in The Economic History of Italy (1861–1990), in disagreement with Ciocca’s more pessimistic Ricchi per sempre?1796–2005 (Wealthy Forever?). Di Martino and Vasta argued, “Italy never really converged towards the technological frontier and never left the semi-periphery of the world economy,” in stark contrast to Toniolo’s opening chapter of The Oxford Handbook of the Italian Economy since Unification, which tells of a long convergence (1896–1992) and two briefer periods of divergence (1870–1896 and 1992–2010). In spite of the disappointing performance of the last two decades, Toniolo’s interpretation is not a pessimistic one. His “divergence” is not to be construed as “decline”; he places Italy’s “diminished social capacity for growth” in the context of other European countries that struggled to adapt to the challenges of the second globalization era.4

This article documents the historical trajectory of Italy’s modern economic growth, taking advantage of the last generation of long-run statistics made available by Italy’s recent 150th birthday, updated with the latest historical estimates of industrial production and regional accounts. The focus is on gdp, for the country as a whole and for its administrative regions, covering the period from Italy’s unification to the present day. How and to what extent has Italy succeeded in reaching the standards of the most advanced economies? How serious is the prospect of Italy’s economic decline?

To diagnose whether a country is declining is a difficult and ambitious task. The first difficulty is to determine an adequate definition of economic decline. At this point, the term has many different meanings. A useful distinction is between an absolute decline (a country’s inability to maintain the level of well-being achieved in the past) and relative decline (its inability to keep pace with the most dynamic economies and to hold steady in the international ranking of prosperity, although not experiencing any actual worsening of living conditions). The second difficulty attends the fact that decline is slow and hardly perceptible, becoming a political and social problem only when the cost of ignoring the results becomes unbearable for a governing elite (sometimes due to such shocks as wars, revolutions, and financial crises). Decline often occurs when an old production model fails to cover new circumstances, especially if this model was highly successful in the past.5

Neither economists nor economic historians have developed a unified conceptual framework to analyze economic decline. Moreover, the multidimensional nature of decline adds to the complexity of measurement exercises. The strategy in this article is to rely on gdp as the main tool for analyzing economic decline. Despite its shortcomings, gdp remains the single best way to describe the performance of a market economy, like that of Italy throughout the period under consideration. If the value of gdp equals a country’s overall income, and gdpper person the average income of that country, gdp per person might appear to be a good proxy measure of (average) well-being (no matter how theoretically inappropriate this line of argument is). Furthermore, gdpper worker can be interpreted as a measure of productivity, the increase in which ultimately determines the sustained income rise observed during the process of modern economic growth. As we will see, the differences between gdp per capita and gdp per worker can provide useful insights into the determinants of convergence and divergence—the characteristics and causes of economic growth, or the lack of it.6

Hence, gdp is the prime indicator in comparisons between the economies of the present as well as of the past (at least as far back as the onset of the Industrial Revolution). Economic historians have devoted many efforts to the art of reconstructing gdp time series, and Italy can be proud of its long tradition in this field. One of the main limitations in these attempts—the lack of subnational series of gdp—has been remedied by a number of recent studies. Time seems to be ripe for re-assessing the long-run dynamics of Italy’s economic progress.

Lessons from New Long-Run Estimates of gdp

Thanks to the reconstruction published by the Italian national statistics agency (istat) in 1957, Italy was one of the first countries to create its own historical series for gdp, though the results of this pioneering work were not entirely successful. Italy’s first series of gdp, running from 1861 to 1955, had serious inconsistencies, which subsequent revisions did not fully remedy. The main criticism is that these official statistical series were never accompanied by an adequate description of methods and sources; without these elements it is difficult—if not impossible—to evaluate the quality of the data. Hence, the consensus of the scientific community was that Italy’s “first generation” time series did not meet international standards.7

In the following decades, the reconstruction of the historical series of Italian gdp intensified; new estimates of the same variable have been published at an average rate of one every four years. Nonetheless, the scholars entrusted with producing the historical series of national accounting were not able to devise a consistent historical time series for the entire post-unification period. Not until the 150th anniversary of Italy’s unification, celebrated in 2011, did a project coordinated by the Bank of Italy (in cooperation with istat and Rome’s “Tor Vergata” University) manage to publish a complete reconstruction of the national accounts. The study did not just connect all of the existing series; it also incorporated the results of new studies for uncovered sectors and periods, thereby yielding historical series covering the entire 150-year history of united Italy. This work has recently been updated, filling the last gap in the reconstruction of industrial gdp. Furthermore, by taking advantage of new data about the Italian labor force, we are now also able to discuss the new series of Italy’s gdp per worker (productivity), as a total and by sector of activity.8

The yearly series of Italy’s gdp per head and per worker, running from 1861 to 2011 at constant prices, are presented in  Appendix II. Figure 1, however, has an even more ambitious goal: By supplementing Malanima’s reconstruction with the new estimates of the period from 1861 to 2011, it displays the long-run evolution of Italy’s per capita gdp from the late Middle Ages to our time. The contrast with the period of pre-unification highlights a defining characteristic of modern economic growth, its sustained increase in gdp per capita. Figure 1 also shows the distinctive feature of a pre-industrial economy, such as that of medieval and Renaissance Italy—the centuries-long stagnation of per-capita gdp. Note, however, that the graph’s scale hides the frequency as much as the intensity of the annual variations during that period: Even though at that time, Italy was a leading economy, famines were recurring, even within the same generation, with disastrous consequences for the population’s standard of living, regardless of the cycles around the same, flat trend.9

Fig. 1

Italy’s Per Capita gdp, 1300–2011

Fig. 1

Italy’s Per Capita gdp, 1300–2011

At the close of the 1700s, Italy did not participate in the first Industrial Revolution because it could not adopt British steam technology and construct a railway system. Hence, the gdp trend for this period in the figure shows a smooth continuation of the past. The curve starts to rise during the last decades of the nineteenth century, the start of the second Industrial Revolution, which was based on electricity, oil, and chemicals. At this epochal juncture, Italy began the process of “modern economic development,” as described by Kuznets: Rural backward Italy embarked on a deep transformation that would eventually change its features, on both qualitative and quantitative levels, and turn it into an advanced economy within the space of a century or so.10

When measured in absolute terms, and over the long run, the increase in gdp per head in the century and a half from unification until the present day is remarkable. On average, Italians today earn thirteen times more than their ancestors did at the time of unification. Figure 1 also shows that the most impressive progress in gdp per head is a recent phenomenon, largely occurring in the latter half of the twentieth century. Since World War II, per capita gdp has increased more than sevenfold; in the previous 100 years or so (1861 to 1951), it had little more than doubled. The income of the Italians made a long leap in a short time.11

Most of the action in Figure 1 takes place in the late nineteenth century. For post-unification Italy, the nonlinear nature of the growth can best be grasped by looking at the rate at which gdp increased (or decreased) in the main periods of Italy’s post-unification history (Table 1). The main “facts” emerging from the Table are capable of schematic analysis by period.

Table 1

The Changeable Growth Rate of Italy’s gdp

gdp/person average annual variation (%)years necessary for gdp per person to doublegdp/worker average annual variation (%)
(1)(2)(3)
Pre-unification Italy (1300–1860) −0.06 −1,167 n.a. 
 
Italy in the Liberal period (1861–1913) 0.91 77 0.89 
 1861–1881 0.61 115 0.26 
 1881–1901 0.71 99 1.15 
 1901–1913 1.73 40 1.53 
 
Fascist Italy (1922–1938) 1.46 48 1.65 
 1922–1929 3.12 22 3.09 
 1929–1938 0.19 372 0.54 
 
Republican Italy (1948–2011) 3.10 23 2.78 
 1948–1973 5.51 13 4.96 
 1973–1992 2.51 28 1.92 
 1992–2002 1.56 45 1.32 
 2002–2011 −0.48 −146 0.25 
 
Italy 150 years on (1861–2011) 1.74 40 1.58 
gdp/person average annual variation (%)years necessary for gdp per person to doublegdp/worker average annual variation (%)
(1)(2)(3)
Pre-unification Italy (1300–1860) −0.06 −1,167 n.a. 
 
Italy in the Liberal period (1861–1913) 0.91 77 0.89 
 1861–1881 0.61 115 0.26 
 1881–1901 0.71 99 1.15 
 1901–1913 1.73 40 1.53 
 
Fascist Italy (1922–1938) 1.46 48 1.65 
 1922–1929 3.12 22 3.09 
 1929–1938 0.19 372 0.54 
 
Republican Italy (1948–2011) 3.10 23 2.78 
 1948–1973 5.51 13 4.96 
 1973–1992 2.51 28 1.92 
 1992–2002 1.56 45 1.32 
 2002–2011 −0.48 −146 0.25 
 
Italy 150 years on (1861–2011) 1.74 40 1.58 

note Column (2) shows the number of years needed for per capita gdp to double, assuming that it changes at the average rate given in column 1; the negative values are interpreted as the number of years necessary for per capita gdp to halve.

1861 to 1901

The first two generations of Italians in post-unification Italy did not experience high growth rates in per capita gdp. Indeed, the rate at which gdp increased during the first four decades of the new Kingdom of Italy (0.6 to 0.7 percent per year) would have required at least a century to double. The political unification of the country did not lead to any “take-off” with regard to the average income of its citizens but to a slow and gradual increase. Productivity, however, strongly increased during the second half of the period, anticipating the momentous change in gdp per head that was about to come at the dawning of the twentieth century.12

1901 to 1913

The years of the so-called “Giolitti age,” Giovanni Giolitti being prime minister from 1903 to 1914, saw an acceleration in gdp: Compared to the previous two decades, the economic growth rate more than doubled (1.7 percent per year in per capita terms). World War I marked a sharp break in this favorable period, but growth resumed rapidly again in the aftermath of the Treaty of Versailles.13

1922 to 1938

The new estimates describe the interwar period as the combination of two decades that differed vastly from one another. The 1930s were as bleak (average per capita gdp growth rate was +0.2 percent) as the 1920s were rosy (+3.1 percent); differences in productivity were only slightly less pronounced and negligible on the whole.

1948 to 2011

The republican period shows three well-known features: (1) from 1948 to 1973, Italy advanced at an unprecedented rate—+5.5 percent per year in per capita terms—not since matched; (2) from 1973 to 1992, the rate decreased conspicuously; and (3) from 2002 to 2011, per capita gdp actually fell by 0.5 percent per year while the growth rate of productivity slowed but remained slightly positive.

Italy as an Open Economy

Nations do not live in isolation; Italy’s performance must be assessed relative to that of other countries. Thanks to the availability of new long-term statistical series, we can track Italy’s participation in the international economy with greater accuracy. The evolution of Italy’s openness to international trade is shown in Figure 2, using the ratio of the sum of imports and exports to gdp. The increase in the degree of openness is particularly marked in the early stages of industrialization—between 1892 and 1914—despite the country’s propensity for protectionism, which was, in fact, more apparent than real. After World War I, the increase resumed during the 1920s, only to decline following the autarchic policies of the Fascist regime. Economic recovery during the boom years of the so-called “economic miracle” coincided with Italy’s inclusion in the new international order, as well as in the European Common Market, which, among other things, involved a gradual abatement of international tariffs. The great fluctuations of the 1970s and 1980s were due to sharp changes in oil prices. In general, the correlation between gdp and long-term trade openness is positive: In the liberal age (1863 to 1963), imports (Granger) caused gdp, which in turn caused exports (Granger); in the period following World War II (1951 to 2004), Granger causality, although weaker, is reversed, exports–gdp–imports.14

Fig. 2

International Factor Mobility, Italy 1861–2011

Fig. 2

International Factor Mobility, Italy 1861–2011

A second aspect of openness concerns migration flows. Between 1869—the first year for which reliable estimates are available—and 2005, more than 28 million Italians emigrated, the majority of them beyond Europe (to the United States, Canada, Argentina, and Brazil). The right axis of Figure 2 shows the gross emigration rate (emigrants per 1,000 inhabitants). The late 1860s saw fewer than 5 per 1,000, but in the years leading to World War I, almost 25 per 1,000 left the country. The war almost completely stopped migration flows. After a brief resumption, Italian emigration found a new obstacle in the restrictive U.S. quotas of 1921 (Emergency Quota Act) and 1924 (Immigration Act), in the Fascist laws of 1927, and in the world crisis of 1930. The combined effects of lower supply and demand with regard to migrants led to a real drop in the emigration rate. When emigration picked up again after World War II, the Italians went mainly to Western European countries. Although the (gross) emigration rate was always below 10 per 1,000, the actual number of people emigrating was significant—2.5 to 3 million Italians emigrated during the 1950s and the 1960s. Gomellini and Ó Gráda found that “relative wages, relative per capita incomes and network effects (proxied by previous migrants) are the variables that explain most [of the emigration].” Emigrant networks seem to be the single most important factor behind the Italian emigration flows.15

The third aspect of openness concerns capital movements, which have significant implications for economic growth—from both a theoretical and an empirical standpoint. The mobility of international capital, which enables the bond constraining domestic investments to a country’s saving capacity to be broken, is one of the most important factors promoting economic growth in the more backward economies. Obstfeld and Taylor’s estimates of the mean absolute value of current account for Italy show high values—indicating high capital mobility—as far back as the first globalization during the the 1900s and 1920s. These years showed the highest economic growth before World War II, as well as the most intense capital movements. Before World War I, capital flew to Italy from elsewhere in Europe (especially Britain) to finance construction and infrastructure, significantly contributing to the upward bend of the gdp series.16

Capital flows reached a low during the 1930s, corresponding with the Italian Fascist period, and began to rise again during the years of the economic miracle. They peaked during the 1960s when gdp growth was also at its best. Conversely, in the final decades of the twentieth century, capital movements underwent a gentle downward trend, despite being on the rise throughout the world. As we have seen, the economic performance of the country declined dramatically at this time. In general, Italy’s economic growth seems to be strongly correlated with its degree of openness to foreign capital movements. Participation in the international economy was vital to the country.

Technology and Institutions: Re-Interpreting the Italian Economy

The debate about Italy’s industrialization and economic growth has a long tradition. Romeo and Gerschenkron disputed about capital accumulation and the “prerequisites” of industrialization more than half a century ago. Despite accumulated research, the debate is still lively and contentious. The new body of quantitative evidence makes it possible to add new insights to the interpretation of the Italian economy over the long run. Italy’s per-capita gdp series can be divided into the three periods corresponding to the country’s political history during the 150 years since its unification—the Liberal age (1861 to 1913), the Fascist period (1922 to1938), and the republican era (since 1946). Placing these gdp series within a broader context that includes technological progress and institutions is useful in explaining the country’s long-term economic performance.17

Technology is the driving force behind increases in productivity (per worker gdp) that represent the main determinant of per capita gdp. During the 150 years since its unification, Italy has experienced four technological regimes: the first (1861 to 1875) identified by the three main inventions of the previous decades—the steam engine, the spinning machine, and the railways; the second (1875 to 1908) coinciding with the “Second Industrial Revolution,” characterized by heavy industry (steel, first and foremost, vital to mechanical industry) and electricity; the third (1908 through the 1970s) defined by the establishment of mass production (exemplified by Henry Ford’s automobile manufacturing) in which petroleum was key, and durable consumer goods began to emerge; and the fourth associated with the “Third Industrial Revolution,” or the electronics age (1970s to the present day), triggered by the advent of information technology and telecommunications, particularly computer technology.18

Technology is a necessary but not a sufficient condition for a country to determine its own course toward prosperity; technological change must be accompanied by institutional change, in the broadest sense, as well as ideological change. Did the new technological paradigms—exogenous factors with regard to the Italian economy—find fertile terrain in the country because institutions and ideologies were favorable to their adoption?19

Much has been written about the economic history of Liberal period Italy. The question at the heart of the historiographical debate concerns when and why Italy was able to transform itself from a rural, poor, and backward country into a wealthy, modern, and industrial one. Along with Romeo, Gerschenkron, the intellectual “giant who dominated the Italian debate” after World War II, dated the “big industrial push” of the country at the mid-1890s, attributing it to the creation of mixed banks—Banca Commerciale Italiana (Comit), founded in 1894 with German capital; Credito Italiano (Credit); Banco di Roma; and, later, Banca Italiana di Sconto. Mixed banks—or universal banks—collect capital (the prerogative of commercial banks) and channel it to favor industrial development (the prerogative of investment banks). Through their network of branches, mixed banks collect short-term deposits from ordinary citizens to invest in shares; that is, they turn the capital into long-term credits to industry—precisely what is needed, according to Gerschenkron, to industrialize a backward country. Mixed banks were the institutional innovation that acted as Gerschenkron’s “engine of growth” in both Italy and Germany. They were able to compensate for the country’s scarcity of natural resources, its political instability, and its governmental sluggishness during the first decades after unification on the path toward Italy’s industrialization.20

The debate that Gerschenkron’s work sparked remained intense for decades. The common denominator of its various interpretations through the years—particularly by Romeo, Cafagna, and Bonelli—was the assumption that economic development followed a stage-by-stage progression. According to this view, a country develops through an orderly sequence of stages (or phases). The first stage encompasses the prerequisites for growth—for instance, infrastructure and human capital; the second stage involves a striking economic take-off, introducing a distinct break with the previous gdp series trend; the next stage marks a rise to maturity, in which technology creates new investment opportunities, the economy becomes more complex, and, finally, mass well-being ensues.21

It is difficult to establish whether the per-capita gdp series in Figure 3 shows a trend congruent with the explanation offered by stage-based models. The figure displays the series of gdp per person and per worker against the background of technological changes and the main political and economic innovations. The first two decades of post-unification Italy reveal an uncertain start; only with the beginning of the “Historical Left” and the Depretis Government (1876) did gdp begin to grow at an increased rate. The trend does not show any trace of the crisis of the 1880s, but the slowdown of the 1890s is visible. On the whole, however, the terms “take-off” or “big industrial push” are inappropriate to describe the trend of gdp per capita during the latter half of the 1890s—especially if we look at gdp per worker.

Fig. 3

gdp per Person and per Worker, 1861–1913

Fig. 3

gdp per Person and per Worker, 1861–1913

Fenoaltea proposed an alternative to the stage-based model. He observed that the new gdp series has an upward trend with no breaks or take-offs, only fluctuations—“economic cycles” mainly caused by the construction industry and more generally by the infrastructure sector. According to Fenoaltea, foreign investment, especially British, was responsible for the various stages of Italian economic growth during the Liberal period. In this model, Italy behaved like any other European fringe country: When the political climate positively influenced investor expectations, capital flowed into the country and moved the economy forward; when investors perceived greater risk, capital flows into Italy ceased, or reversed direction, and the economy contracted. The view of Italy as an open economy does not require any stage-based developmental process and does not warrant any take-off stage; the process was guided by the interweaving of the international economic cycle, investor expectations, and the domestic political cycle. Fenoaltea’s interpretation appears largely consistent with a cyclical development along an increasing trend, like the one shown in Figure 3. Less convincing is its disregard for the role played by national institutions and domestic economic-policy decisions.22

Toniolo made this point effectively: “In order to profit from the international boom, Italy had to abandon expensive colonial adventures and put order to its public finances, rebuild almost from zero a banking system that laid in tatters, create a central bank, overcome the credibility shock generated by the suspension of gold convertibility. More than that: Italy had to overcome a social and political crisis that threatened to undermine the very foundations of the liberal state. Both politics and society stood up to the occasion: the crisis (…) was overcome. Democracy was maintained, the disastrous African policy was discontinued, sound economic institutions were put in place and the banking system was revitalized. In the following years successive governments maintained a time-consistent fiscal and monetary policy, the gold standard was shadowed but cleverly not officially reinstated, commercial treaties brought back the fresh air of freer trade. All this lies behind Italy’s ability to surf the long wave of international growth. It did not need to be so: even sailing with the tide requires expert skippers” (our italics).23

On a more technical level, the estimates of Felice and Carreras pertaining just to industry from 1911 to 1951, when combined with those of Fenoaltea (1861 to 1913), suggest that the cyclical model is valid only until the mid-1890s. From that time onward, more or less coinciding with the creation of the mixed banks, not only does the production of durable goods count for the cycle of Italian industry; so does the production of consumer goods. In short, the new quantitative evidence is consistent with a cyclical model (exogenous) in combination with the institutional innovations (endogenous): Domestic policy intervened to reinforce the upward curve cycle of foreign capitals.24

The interwar period has received considerably less attention than the Liberal period even though during these years, Italy modernized and enhanced the sectors of the Second Industrial Revolution (chemicals and heavy industry, at the expense of textiles and foodstuffs), and created the institutional framework that would accompany the subsequent economic miracle.25

Previous gdp estimates view Italy’s economy, unlike that of other belligerent countries, as booming during the World War I period: From 1913 to 1918, Italy’s total gdp at constant prices increased by 33.3 percent according to Maddison, and by 45.4 percent according to Rossi, Sorgato, and Toniolo. Scholars were skeptical, to say the least, about these figures, which sharply contrasted with those of the other major countries of continental Europe—Germany at −18.0 percent, Austria at −26.7 percent, and France at −36.1 percent. Italy’s increase in total gdp was even higher than those of Britain (+13.2 percent) and the United States (+14.8 percent). New estimates for both the service sector and industry, however, bring the performance of the Italian economy more into line with that of the other warring countries: From 1913 to 1918, Italy’s total gdp reduced by 2.7 percent and Italy’s per capita gdp by 4.6 percent. After the war years, when Italy’s allies favored imports of crucial materials, Italy re-oriented toward a more inward-looking industrialization, which culminated in the autarchy of the 1930s. Even though the period from 1919 to 1938 was difficult on every level, Italy’s per-capita gdp growth rate (1.5 percent per year) was significantly higher than the one recorded during the Liberal period (0.9 percent). Behind this overall figure, however, lay the oscillations of the 1920s and 1930s. Figure 4 shows a boom in the decade after the Treaty of Versailles (1919 to 1929), a recession following the 1929 crisis, and a lively recovery starting in the latter half of the 1930s.26

Fig. 4

gdp per Person and per Worker from World War I to World War II

Fig. 4

gdp per Person and per Worker from World War I to World War II

The growth of the 1920s was rapid, the result of an increase in productivity; if the war had any beneficial consequence, it was its positive effect on the preexisting technological backwardness; progress in the chemical industry, in motor-vehicle production, and in aeronautics went hand-in-hand with the war effort. Between 1919 and 1929, Italy grew at a high rate, more than 3 percent per year, on average. But the 1920s were followed by economic and political calamity. The Great Depression of 1929 appears to have had a greater impact than previously thought. Between 1929 and 1933, Italy suffered an 8 percent decrease in per-capita gdp, significantly lower than the 3.5 percent decrease estimated by the “old” series. This decrease is worse than Britain’s (−4 percent), close to France’s (−10 percent) and Germany’s (−12 percent) but a long way from the catastrophic U.S. figure (−27 percent).27

Paradoxically, at least from one perspective, the deflationary policies of the Fascist regime favored modernization and thus the expansion of the Italian productive base, as is clear from the difference between gdp per person and gdp per worker, which was substantially better from the second half of the 1920s until World War II (see Figure 4). The deflationary turning point of 1926 (with the drastic revaluation of the Italian lira) made the price of imported materials (for example, cast iron) and of machinery drop, thereby benefiting industry. But it made prices rise for traditional Italian exports in such light industries as textiles, thereby damaging the less advanced Italian production sectors. The 1929 crisis led to a broad reform of the Italian production system. On the one hand, it forced the industrial sector to replace labor (now more expensive) with capital, leading to an increase in mechanization. On the other hand, the disastrous effects of the crisis on the real economy and on finance led to the institutional re-organization of national capitalism: The institute for industrial reconstruction (iri, or Istituto per la Ricostruzione Industriale) was created in 1933, and in 1936 the banking reform law effectively severed banking from industry, that is, the tie between short-term and long-term credit.28

According to Petri, the state’s decisive intervention in support of certain strategic sectors—metal-making, engineering, and chemicals—during the extremely difficult interwar years paved the way for the economic boom to follow. As argued by James and O’Rourke, among others, “Financial restructuring was used as an opportunity to reshape the structure of industry.” Today, the widespread view is that the Fascist interwar years were not a break in the long-term path of the Italian economy but rather a preparation for the great leap that occurred after World War II. This interpretation is consistent with the new series with regard to the aggregate picture, as we have seen, but also with regard to the development of the industrial sectors and structure.29

The new gdp estimates for the years after World War II (Figure 5) do not add much to what we already knew. gdp in the decades after World War II shows an upward trend—per capita and, even more, per worker—and a conspicuous slowdown starting in the 1990s, leading to stagnation with the advent of the new millennium.

Fig. 5

gdp per Person and per Worker after World War II

Fig. 5

gdp per Person and per Worker after World War II

Once postwar reconstruction was completed, Italy “put on wings” and embarked on the period of growth that has become known as the “economic miracle.” The new estimates confirm the exceptional performance of the 1950s and 1960s, which emphasizes, as evident in Figure 1, a break in the centuries-old trend. In these two decades, Italy completed its transition from, in Zamagni’s terms, the “periphery to the center,” becoming a modern industrial nation, with labor shifting from rural to industrial areas, even in Italy’s Mezzogiorno (the southern regions). There were many reasons for this development, starting from some decisions in the geopolitical and international arena. First, the funds provided by the Marshall Plan found better use in Italy (to renovate the industrial apparatus) than in other countries. Second, Italy’s decision to participate in a larger European context was prescient. Other factors, such as the fixed exchange rate based on the dollar (and the undervaluation of the Italian lira), low prices for oil and other natural resources, and the gradual liberalization of international trade, were particularly beneficial to Italy. The decrease in raw-material prices during the 1950s and 1960s was vital to a country lacking in natural resources.30

Among the important elements explaining Italy’s growth after World War II is also Italy’s continuity with its past, especially the interwar years. Such is the case with the system of partecipazioni statali (joint stock companies under private law indirectly owned by the state), which began in the 1930s and became the driving force of industrial modernization during the 1950s and 1960s. Notwithstanding the lack of genuine counter-evidence, the idea is that these state holdings played a key role in devising the “far-seeing strategic plans which were instead absent—if we exclude fiat of Valletta—in large scale private industry.”31

By the end of the 1960s, Italian industry had diversified broadly, even impressively in some respects, excelling in information technology and in the manufacture of automobiles, chemicals, domestic appliances, and, remarkably, aerospace components. The commodities traditionally bearing the label “Made in Italy” (particularly textiles, footwear, food, and home furnishings) were also flourishing, supported by a web of small and medium-sized enterprises.32

Growth slowed during the 1970s and 1980s, starting with the first energy crisis in 1973. The system of partecipazioni statali fell to clientele-type political demands, which led to the construction of manufacturing plants in far-flung, inconvenient locations. Large-scale enterprises lost ground, and a shift of gdp from industry to services ensued.33

In any case, Italy’s gdp increased during this period in step with that of its main European competitors, driven by exports and by the country’s industrial districts, which seemed to establish a new paradigm for enterprise. Some critical observers noted, however, that the rise of these new businesses owed more to the devaluation of the lira and to a lack of fiscal control than to any inherent entrepreneurial expertise—a view confirmed in the light of their disappointing performance in subsequent years.34

The years since 1992 have witnessed a decrease in growth, which is less than half of what it was during the previous twenty-year period. As Rossi observed, “Adapting to the ict revolution and globalization … was, and is, not an easy process, above all with regard to the change in technological paradigm” (our translation). The last twenty years were marked by Italy’s inability to adapt to a context once again exogenously created. At the turn of the millennium, while Italy continued to fall behind in Europe, which, as a whole, was losing ground to the United States and to emerging Asian countries, both the Italian press and public opinion spoke in terms of an economic decline.35

The Long-Run Divergence of the Italian Regions

Following the reconstruction of Italy’s national accounts, a number of economic historians began to bestow the same treatment on Italy’s regional accounts. An early attempt, by Zamagni in 1978, included an estimation of income within the Italian regions for the year 1911. Similar regional scholarship lagged until the new millennium, when new studies enabled an outline of long-term per-capita gdp development for each of the country’s regions, thus offering insight into the origins of current territorial imbalances.36

Figure 6 shows the trend of regional differences in per-capita gdp for the five large macro-areas of the country. In the baseline year (1871), Italy showed distinct per-capita gdp differences: The richest area of the country, the northwest, had around a 25 percent advantage over the poorest area, the south (about 2,000 Euros per person per year in the northwest versus 1,600 Euros in the south)—a significant gap, consistent with what emerges in other social indicators and with what we know about the distribution of transport and credit infrastructure. The situation in other countries, such as Spain or the Austria-Hungarian Empire, indicates a similar disparity in favor of regions with an industrial or services base—Madrid and Catalonia in Spain and Vienna in Austria-Hungary. In general, however, the dispersion of average incomes at the time was relatively modest compared to later conditions after industrialization had progressed.37

Fig. 6

The Great Italian Divide, 1871–2009

Fig. 6

The Great Italian Divide, 1871–2009

Regional differences increased conspicuously during the interwar years. The northwest progressed along the path of industrialization and modernization, while the Mezzogiorno remained dramatically still, eventually becoming, in the aftermath of World War II, a sort of second, shadow Italy. The extraordinary development in the northwest benefited from World War I (1915 to 1918), when the war effort inexorably steered public procurement toward enterprises in the so-called “industrial triangle” (Lombardy, Piedmont, and Liguria). The north also benefited from deflationary measures and an autarchic policy, which meant an intensification of industrial production in advanced sectors, most of which were located there.38

The Mezzogiorno suffered from the demographic policies of the Fascist regime: Benito Mussolini’s restrictions to emigration increased the demographic pressure on the poorest regions; his attempt to make Italy self-sufficient in food, starting with wheat (the so-called “wheat battle”), stifled the more profitable crops of Puglia and Sicily (wine, grapes, and citrus fruits); and his protection of rents for landowners, even those without productive land, hindered the modernization of southern agriculture. Once again, although historians have been well aware of the “problem of the south” (questione meridionale) since the last century, the sheer scale of the differences that Figure 6 illustrates is striking: By 1951, per-capita gdp in the South had reduced to less than half of that in the central and northern regions.39

Regional imbalances greatly decreased from 1951 to 1971. Convergence of the South during the 1950s and 1960s was exceptional, made possible by both interregional migration toward the north and the deus ex machina of state intervention. The state promoted the creation of great infrastructural works in the southern regions—from aqueducts to roads and industrial plants—through the Cassa per il Mezzogiorno (the Southern Italy Development Fund), established in 1950, which also provided for indirect funding of production activities. The initiatives involved public enterprises, which were obliged by law to devote a considerable amount of their investment to the Mezzogiorno, as well as private ones; both kinds of enterprise received loans with low interest rates and free contributions. This top-down policy focused on such “heavy,” high added-value sectors as the chemical, steel, and advanced mechanical industries, led by state-owned enterprises. In terms of resources allocated in relation to gdp, the investment was on a scale unparalleled in any other Western European country.40

This resurgence of the Mezzogiorno turned out to be short-lived, however; the economic policy was not sufficient to trigger a continuous self-generating process in the South. When the oil crisis of the 1970s occurred, the model of production that Ford had initiated in the United States, based on large energy-intensive factories, suffered a setback. In Italy, its repercussions were particularly damaging for the weaker links of the chain—the plants inconveniently located in southern Italy because of state incentives or initiatives. At this point, public intervention proved to be incapable of re-inventing itself, becoming entangled in welfare or income-support policies, bloating the staff of public administration, and even benefiting organized crime.41

Figure 6 clearly shows that from the 1970s onward, albeit slowly, the southern regions started to fall behind again, whereas the northeastern regions, and later the central regions, started to converge economically with the northwestern ones. The driving force of the northeast was a growing capillary network of export-oriented manufacturing firms. The most recent data (2009) confirm gaps that are wider than the ones estimated for the time of Italy’s unification. Italy is now divided into two halves, the Center/North and the Mezzogiorno. The South has partly closed the gap in productivity but not that in employment rate and structural change, which is growing worse. Institutions and social capital have arguably prevented it from keeping pace in factor endowments (as measured by the employment rate and its allocation through agriculture, industry, and services), in spite of factor-price equalization (as measured by the greater equality in total and within-sector productivity).42

Italy’s gdp in International Perspective

Between 1870 and 2011, Italy’s gdp per head increased twelvefold, surpassing the average figure for the twelve countries of Western Europe (where per-capita gdp increased elevenfold during the same period). Italy’s improvement was better than that of Britain (sevenfold) and equaled that of France and Germany, but it was not as good as that of Spain (fourteenfold) or that of Greece (sixteenfold)—or, as the case may be, that of the United States (thirteenfold). Moreover, certain Scandinavian countries showed exceptional performance in this regard. Norway and Finland increased their incomes twenty-one times during the same period, and Sweden nineteen times over. In Asia, Japan’s per-capita gdp rose thirty times over and South Korea’s thirty-seven times over. Judging from the long-term picture, Italians have good reason to feel satisfied with their performance, nothwithstanding that of southern Italy, which was radically different from the center/north’s. The northern region increased its per-capita gdp almost fourteenfold—similar to Spain and significantly better than France and Germany—but the Mezzogiorno’s increase was less than tenfold—despite its higher potential for convergence, that is, its lower initial gdp—much worse than any other country of the European periphery, thereby weakening the performance of the country as a whole.43

During the post–World War II years, Italy, in the space of two generations, completed the country’s reconstruction and its road to well-being. How does Italy’s postwar economic growth compare with that of other countries? Figure 7 contrasts the Italian per-capita gdp growth with that of the United States, with the average figure for the European Union (fifteen countries—the eu 15), with the oecd average, and with the world average. In 1950, the gap between the average income of Italians and that of Americans was huge, but Italy was also significantly poorer than the average of the eu 15. The years 1950 to 1973 are the “golden years” of Western Europe; a general stability of macroeconomic indicators (acceptable inflation and limited cyclical fluctuations) went hand in hand with extraordinarily high growth rates. Europe may have been rapidly growing at the time, but Italy managed to expand even more rapidly. In fact, the upward trend, with a turning point at 1991/92, means that during the first forty-two years (1950 to 1992), Italian growth was systematically faster than that of the whole world—an average annual rate 3.5 percent higher than the average of the other countries. The years 1992 to 2011 show an inverse trend: Italy grew less rapidly than the rest of the world, at an escalating rate per year—on average, a 4.4 percent lower rate than the other countries. The diagnosis seems to indicate a country in decline.44

Fig. 7

The Rise and Fall of Per-Capita gdp, 1950–2011

Fig. 7

The Rise and Fall of Per-Capita gdp, 1950–2011

Figure 8 strongly confirms this diagnosis. It compares Italy’s per-capita gdp growth rates with that of every other country in the world (at least those for which reliable per capita gdp figures exist) during the 150 years since the country’s unification. Based on calculations of the average annual growth rates of per-capita gdp by decade, the figure indicates (1) the growth rate of per-capita gdp for the country that grew most rapidly, on average, during each decade; (2) the growth rate of the country that grew most slowly during each decade; and (3) Italy’s position between these two extremes. It also displays the trend for Italy throughout the period, compared with the oecd average.

Fig. 8

From the Periphery to the Center, and Back Again: The Growth Rate of Italy’s gdp in International Comparisons (1861–2010)

Fig. 8

From the Periphery to the Center, and Back Again: The Growth Rate of Italy’s gdp in International Comparisons (1861–2010)

The new Kingdom of Italy, which was born poor in 1861, grew below the oecd average during the following forty years, unable to exploit the advantages of its own backwardness. During the first decade of the 1900s, Italy managed to align its growth rate with the oecd average: Growth during the Giolitti’s age, considered “exceptional” by domestic standards, was nothing of the kind, given the international level. After achieving the growth rate of the oecd countries, Italy managed to do little more for decades than to “grow with the average.” Witness the entire first half of the twentieth century. The years 1950 to 1970, however, mark an extraordinary phase in which the country came a little closer to the front-runners. For two decades, Italy maintained an annual average growth rate of 5 percent before slowing down and falling behind. This dynamic might be understandable to some extent. It is not easy to stay in the vanguard; it is sometimes easier to progress by following another’s lead. Yet, Figure 8 does not convey Italy’s difficulty in staying close to the top countries as much as it conveys its difficulty in avoiding a fall below the bottom ones. Since the early 1990s, the country has embarked on a phase of relative decline, not only slowing its gdp pace more markedly than the average of the oecd countries but, unlike any of those countries, actually regressing (its per-capita gdp growth rates becoming negative). Italy had the worst average growth rate in the world from 2001 to 2010.45

This last decade has also been characterized by a divergence between labor productivity (gdp per worker), the trend of which was still slightly positive, and average income (gdp per capita), which decreased. This pattern is consistent with the trend observed in gdp per hour from 2002 to 2011—+ 0.12 percent on average per year. Compared with the Euro’s “core” (Germany and France), Italy fell back in income more than in productivity, whereas compared with the United States, the opposite pattern holds. But during the 1990s, before the creation of the Euro, Italy’s dynamic relative to France and Germany was reversed—(slowly) converging in income but (strongly) diverging in productivity.46

What does this history tell us? After unification, Italy had to catch up with the European core; after the creation of a common currency in continental Europe, the unified macro-economic setting should have fostered this convergence by promoting equalization in factor endowments (the level and structure of employment) and prices. The fact that Italy’s activity rate has been suffering more than its productivity suggests that negative conditioning factors might be responsible for Italy’s shortfall in factor endowments. Domestic policy and institutions look to be the main subjects of further investigation; they remain the most important national variables in Italy, as in the rest of the Euro zone.

Since its unification, Italy has managed to bridge the gap in average national income with the European countries that were most advanced in 1861—Britain, France, and Germany. By reaching the center from the periphery, Italy accomplished an unlikely feat. In 1916, Louis Bonnefon Craponne, a French industrialist and first president of Confindustria, published L’Italie au travail, in which he described France’s incredulity in learning that Italy had not only started to produce automobiles but was also entering them in the first races. Most observers of the day were unable to update the country’s image as the poor relation of Western Europe to a country well on its way to modern economic development. The gdp estimates presented in this article well document the process by which Italy transformed a pre-industrial rural economy into an advanced economy ranking among the major industrial powers of the world. Stagnation gradually gave way to growth; today, average per-capita income is almost thirteen times what it was at the time of Italian unification.47

The process has been discontinuous, however, and the country has experienced an intransigent inequality inside its borders. The “economic miracle” after World War II did not cancel the line dividing the North from the South, an original feature of the Kingdom of Italy. The empirical evidence presented in this article shows that regional convergence has been the exception rather than the rule, only evident from 1951 to 1971; the remaining 130 years were marked by divergence or immobility, at least in relative terms. The last twenty years have seen Italy’s per-capita gdp stop growing (+0.6 percent per year) and even regional convergence grind to a halt. If southern Italy had continued to converge toward the center/north, Italy’s performance would have improved considerably. The recent decline has naturally nurtured fears of failure.48

Not all analysts share these apprehensions. Some scholars are stubbornly optimistic. As Macaulay wrote of nineteenth-century Britain, “On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us?” Contemplating the past to find comfort about the future may be an old and licit activity, but it is also a groundless one: History does not lend itself to mere extrapolation. The analysis of per-capita gdp herein depicts Italy as a country that is at least in relative decline. Although relative decline is a necessary, though not a sufficient, condition for absolute decline, the negative growth rate of per capita gdp during the last decade points toward a decline on any terms. Given the lack of a suitable temporal perspective to judge whether Italy’s malaise is temporary—prolonged as it is—reversible, or irreparable, is caution about drawing conclusions still warranted? Is Italy capable of yet another, in Toniolo’s words, “burst of pride?”49

gdp is not the only dimension, however, in which Italy has been losing ground. After a century-long decrease, poverty indicators and economic inequality have started to move in the wrong direction. Equally alarming are recent measures of institutional efficiency and political/personal freedom, which reveal Italy to occupy last place among the countries of Western Europe in the Press Freedom Index and in Transparency International’s Corruption Perceptions Index. Italy is also at the bottom, although close to the core, in the Freedom House index of political rights and civil freedom. Each one of these indicators is subject to a number of methodological criticisms, possibly reflecting only part of a much more complex story, but they are all in agreement with the hypothesis of Italy’s decline. The gdp data in this article, in conjunction with other socioeconomic indicators, shed undeniable light on Italy’s many structural weaknesses—hardly signs for optimism.50

Notes

1 

Angus Maddison, Contours of the World Economy, 1–2030 AD: Essays in Macro-Economic History (New York, 2007); Frank Tenney, An Economic Survey of Ancient Rome. V. Rome and Italy of the Empire (Paterson, 1959); Richard Duncan-Jones, The Economy of the Roman Empire: Quantitative Studies (New York, 1982); Raymond W. Goldsmith, Premodern Financial Systems: A Historical Comparative Study (Cambridge, 1987), 55–58; Elio Lo Cascio and Paolo Malanima, “Cycles and Stability: Italian Population before the Demographic Transition,” Rivista di Storia Economica, III (2005), 204–205.

2 

Malanima, “Measuring the Italian Economy 1300–1861,” Rivista di Storia Economica, III (2003), 265–295; Carlo Maria Cipolla, “Note sulla storia del saggio d’interesse, corso dividendi e sconto dei dividendi del Banco di S. Giorgio nel Sec. XVI,” Economia Internazionale, II (1952), 255–274; Malanima, “The Long Decline of a Leading Economy: GDP in Central and Northern Italy, 1300–1913,” European Review of Economic History, II (2011), 169–219; idem, “When Did England Overtake Italy? Medieval and Early Modern Divergence in Prices and Wages,” European Review of Economic History, I (2013), 45–70; idem, “Alle origini della crescita in Italia 1820–1913,” Rivista di Storia Economica, III (2006), 306–330. For the quotation, see idem, “An Age of Decline: Product and Income in Eighteenth–Century Italy,” Rivista Historia Economica, II (2006), III.

3 

Maddison, “Historical Statistics of the World Economy: 1–2008 AD” (2010), available at http://www.ggdc.net/maddison/content.shtml (accessed October 6, 2013).

4 

Stefano Fenoaltea, “Lo sviluppo economico dell’Italia nel lungo periodo: riflessioni su tre fallimenti,” in Pierluigi Ciocca and Gianni Toniolo (eds.), Storia economica d’Italia. I. Interpretazioni (Rome, 1998), 3–41; idem, “I due fallimenti della storia economica: il periodo post-unitario,” Rivista di Politica Economica, III–IV (2007), 341–358; Giovanni Federico, “Italy, 1860–1940: A Little-Known Success Story,” Economic History Review, IV (1996), 764–786; Vera Zamagni, Dalla periferia al centro: La seconda rinascita economica dell’Italia (1861–1990) (Bologna, 1993; orig. pub. 1990, though inclusive only until 1981); Ciocca, Ricchi per sempre? Una storia economica d’Italia (1796–2005) (Turin, 2007); Paolo Di Martino and Michelangelo Vasta, “Happy 150th birthday Italy? Institutions and Economic Performance since 1861,” Quaderni del Dipartimento di Economia Politica e Statistica, Università di Siena, no. 662 (2012), available at http://www.econ-pol.unisi.it/dipartimento/it/node/1729; Toniolo, “An Overview of Italy’s Economic Growth,” in idem (ed.), The Oxford Handbook of the Italian Economy since Unification (New York, 2013), 29, 35.

5 

Toniolo, L’Italia verso il declino economico? in idem and Vincenzo Visco (eds.), Il declino economico dell’Italia: Cause e rimedi (Milano, 2004), 9–10.

6 

François Lequiller and Derek Blades, Understanding National Accounts (Paris, 2006).

7 

istat (Istituto centrale di statistica), Studi sul reddito nazionale (Rome, 1950); idem, “Indagine statistica sullo sviluppo del reddito nazionale dell’Italia dal 1861 al 1956,” Annali di statistica, IX (1957); idem, Sommario di statistiche storiche italiane 1861–1955 (Rome, 1958). The system of national accounting was introduced in Italy in the aftermath of World War II, shortly after “the governments of Britain, Canada and the United States had started to use it, during the war, in order to assess compatibility between aims and resources.” See Gian Carlo Falco, La contabilità nazionale italiana (1890–1995), in Claudio Pavone (ed.), Storia d’Italia nel secolo ventesimo: strumenti e fonti (Rome, 2006), I, 377; Andre Vanoli, A History of National Accounting (Amsterdam, 2005). For the early gdp series compiled in the 1960s, see Giorgio Fuà (ed.), Lo sviluppo economico in Italia. III. Studi di settore e documentazione di base (Milan, 1968); for criticism, Fenoaltea, “Notes on the Rate of Industrial Growth in Italy, 1861–1913,” Journal of Economic History, III (2003), 695–735. For the consensus view of the first-generation time series, see Jon S. Cohen and Federico, The Growth of the Italian Economy, 1820–1960 (New York, 2001), 8–9.

8 

Many of the previous estimates were variations on those published by istat in 1957: Vecchi, “Il benessere dell’Italia liberale (1861–1913),” in Ciocca and Toniolo (eds.), Storia economica d’Italia. III. Industrie, mercati, istituzioni. I. Le strutture dell’economia (Rome, 2003), 71–98. For the new estimates, see Alberto Baffigi, “National Accounts, 1861–2011,” in Toniolo (ed.), Oxford Handbook, 157–186; Alessandro Brunetti, Felice, and Vecchi, “Reddito,” in Vecchi (ed.), In ricchezza e in povertà: Il benessere degli italiani dall’Unità a oggi (Bologna, 2011), 209–234. For the years 1938 to 1951, see Felice and Albert Carreras, “When Did Modernization Begin? Italy’s Industrial Growth Reconsidered in Light of New Value-Added Series, 1911–1951,”Explorations in Economic History, IV (2012), 443–460. For productivity, see Stephen N. Broadberry, Claire Giordano, and Francesco Zollino, “Productivity,” in Toniolo (ed.), Oxford Handbook, 187–226. gdp per hour worked, an alternative measure of productivity, could not be calculated due to lack of suitable data: See Andrea Brandolini and Vecchi, “Standards of Living,” in Toniolo (ed.), Oxford Handbook, 227–248; Michael Huberman, “Working Hours of the World Unite? New International Evidence of Worktime, 1870–1913,” Journal of Economic History, IV (2004), 964–1001.

9 

Malanima, “Measuring the Italian Economy”; Massimo Livi Bacci, Population and Nutrition: An Essay on European Demographic History (New York, 1991); Cormac Ó Gráda, Famine: A Short History (Princeton, 2009).

10 

Robert C. Allen, The British Industrial Revolution in Global Perspective (New York, 2009); Simon Kuznets, Modern Economic Growth: Rate, Structure and Spread (New Haven, 1966).

11 

Toniolo and Vecchi, Nel secolo breve il lungo balzo del benessere degli italiani, in Luca Paolazzi (ed.), Libertà e benessere in Italia: 150 anni di storia unitaria e i traguardi del futuro (Rome, 2010), 15–59.

12 

Toniolo, “Overview,” 3–36, gives two reasons for the deadlock of this period. First, in three parts, was the sluggishness of (1) the process for creating a single national market (political, administrative, and economic unification), (2) the slow formation of an adequate human capital stock (schooling of the population was difficult), and (3) the establishment of the new legal institutions (from the single currency to the approval of the commercial and administrative codes). Second was the succession of external shocks (two wars of independence and the problem of banditry in the south of the country) and policy mistakes with regard to trade and monetary matters.

13 

Growth actually began in 1898. The yearly growth rate for the years 1898 to 1913 is 1.75. Also, the previous decades were marked by significant cyclical movements (as discussed below), which did not change the overall picture. The growth rate for the years 1876 to 1898 is 0.76 and for the years 1876 to 1888, 1.18.

14 

Michelangelo Vasta, “Italian Export Capacity in the Long-Run Perspective (1861–2009): A Tortuous Path to Stay in Place,” Journal of Modern Italian Studies, I (2010), 133–156; Federico, Sandra Natoli, Giuseppe Tattara, and Vasta, Il commercio estero italiano, 1862–1950 (Rome, 2011); Baffigi, “National Accounts”; Federico and Antonio Tena, “Was Italy a Protectionist Country?” European Review of Economic History, I (1998), 73–97. For tests of Granger causality, see Barbara Pistoresi and Alberto Rinaldi, “Exports, Imports and Growth: New Evidence on Italy: 1863–2004,” Explorations in Economic History, II (2012), 241–254. A variable x is said to Granger-cause variable y, if y can be predicted better by using past values of both x and y than by using past values of y alone.

15 

The data reported herein refer to gross emigration rates. See Matteo Gomellini and Ó Gráda, “Migrations,” in Toniolo (ed.), Oxford Handbook, 271–302. For an analysis of regional flows, see Felice, Divari regionali e intervento pubblico: Per una rilettura dello sviluppo in Italia (Bologna, 2007), 42–54; Gomellini and Ó Gráda, “Migrations,” 282. For the post-World War II period, see Alessandra Venturini, Postwar Migration in Southern Europe, 1950–2000: An Economic Analysis (New York, 2004).

16 

Fenoaltea, “International Resource Flows and Construction Movements in the Atlantic Economy: The Kuznets Cycle in Italy, 1861–1913,” Journal of Economic History, III (1988), 605–638.

17 

For the debate, see Rosario Romeo, Risorgimento e capitalismo (Bari, 1959); Alexander Gerschenkron, “Notes on the Rate of Industrial Growth in Italy, 1881–1913,” Journal of Economic History, IV (1955), 360–375; Gerschenkron and Romeo, “Lo sviluppo industriale italiano [testo del dibattito tenuto a Roma, presso la Svimez, il 13 luglio 1960],” Nord e Sud, XXIII (1961), 30–56.

18 

Boyan Jovanovic and Peter Rousseau, “General Purpose Technologies,” in Philippe Aghion and Steven Durlauf (eds.), Handbook of Economic Growth (Amsterdam, 2005), I, 1181–1224; Christopher Freeman and Carlota Perez, “Structural Crises of Adjustment, Business Cycles and Investment Behaviour,” in Giovanni Dosi et al. (eds.), Technical Change and Economic Theory (London, 1988), 38–66; Robert J. Gordon, “Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds,” nber Working Papers 18315, National Bureau of Economic Research, Inc. (2012), available at http://www.voxeu.org/epubs/cepr-reports/us-economic-growth-over-faltering-innovation-confronts-six-headwinds (accessed October 6, 2013). The dates marking the shift from one regime to another are obviously approximate, serving only to outline the timeline of the main innovations. Franco Amatori, Matteo Bugamelli, and Andrea Colli, “Technology, Firm Size, and Entrepreneurship,” in Toniolo (ed.), Oxford Handbook, 455–484, provide an excellent and up-to-date account of unified Italy’s different technological paradigms during the past 150 years.

19 

Kuznets made this point about technological change in Stockholm when he received the Nobel Prize for economics. See Kuznets, “Modern Economic Growth: Findings and Reflections,” American Economic Review, III (1973), 247–258; Moses Abramowitz, Thinking about Growth and Other Essays on Economic Growth Welfare (New York, 1989); Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity, and Poverty (New York, 2012).

20 

Among the more important works about the Liberal period are Toniolo, Storia economica; idem, “Overview”; Zamagni, Economic History; Ciocca, Ricchi per sempre?; Fenoaltea, L’economia italiana dall’Unità alla Grande Guerra (Roma, 2006); idem, The Reinterpretation of Italian Economic History: From Unification to the Great War (New York, 2011). The quotation about Gerschenkron and Romeo is from idem, “I due fallimenti,” 352. The mixed banks typically entered the boards of the firms that they financed, thus obtaining access to strategic information. The advantages associated with the presence of a mixed bank must be weighed against the greater fragility of the economic system, due to the relationship between credit capital (banking system) and industrial capital (the real economy). Gerschenkron, “Notes”; idem, “Rosario Romeo e l’accumulazione primitiva del capitale,” Rivista Storica Italiana, IV (1959), 557–586; idem, Economic Backwardness in Historical Perspective (New York, 1962).

21 

Romeo, Risorgimento; Luciano Cafagna, “L’industrializzazione italiana: La formazione di una ‘base industriale’ in Italia fra il 1896 e il 1914,” Studi storici, III–IV (1961), 690–724; idem, Intorno alle origini del dualismo economico in Italia, in Alberto Caracciolo (ed.), Problemi storici dell’industrializzazione e dello sviluppo (Urbino, 1965), 103–150; Franco Bonelli, Il capitalismo italiano: Linee generali di interpretazione, in Ruggiero Romano and Corrado Vivanti (eds.), Storia d’Italia: Dal feudalesimo al capitalismo (Turin, 1978), 1193–1255; Fenoaltea, L’economia italiana, 38; Walt W. Rostow, The Stages of Economic Growth (New York, 1960).

22 

Fenoaltea, “International Resource Flows”; idem, L’economia italiana; idem, Reinterpretation.

23 

Toniolo, “Stefano Fenoaltea, L’economia italiana dall’Unità alla Grande Guerra (Rome, 2006),” Journal of Modern Italian Studies, I (2007), 132.

24 

Felice and Carreras, “When Did Modernization Begin?”

25 

Among those few who covered the interwar period are Toniolo, L’economia dell’Italia fascista (Rome, 1980); Gualberto Gualerni, Storia dell’Italia industriale: Dall’Unità alla Seconda Repubblica (Milan, 1995); Fabrizio Galimberti and Luca Paolazzi, Il volo del calabrone: Breve storia dell’economia del Novecento (Florence, 1998); Rolf Petri, Storia economica d’Italia: Dalla grande guerra al miracolo economico (1918–1963) (Bologna, 2002); Charles Feinstein, Peter Temin, and Toniolo, The World Economy between the World Wars (New York, 2008); Felice and Carreras, “When Did Modernization Begin?”

26 

Maddison, Monitoring the World Economy, 1820–1992 (Paris, 1995), 148–151; Nicola Rossi, Antonio Sorgato, and Toniolo, “I conti economici italiani: una ricostruzione statistica 1890–1990,” Rivista di Storia Economica, I (1993), 1–47. For a skeptical view, see Broadberry, “Appendix: Italy’s GDP in World War I,” in idem and Mark Harrison (eds.), The Economics of World War I (New York, 2005), 305–307. The new estimates for the service sector and industry are from Patrizia Battilani, Felice, and Zamagni, Il valore aggiunto dei servizi a prezzi correnti (1861–1951) (Rome, 2011); Carreras and Felice, “L’industria italiana dal 1911 al 1938: ricostruzione della serie del valore aggiunto e interpretazioni,” Rivista di storia economica, III (2010), 285–333.

27 

Feinstein, Temin, and Toniolo, World Economy, 87; Ornello Vitali, La stima del valore aggiunto a prezzi costanti per rami di attività, in Fuà (ed.), Lo sviluppo economico in Italia: Studi di settore e documentazione di base (Milan, 1969), III, 463–477.

28 

Deflation, that is, price decreases, led to a rise in real wages or to an increase in the cost of labor factor of production, which became more expensive compared to other goods. See Fabrizio Mattesini and Beniamino Quintieri, “Italy and the Great Depression: An Analysis of the Italian Economy, 1929–1936,” Explorations in Economic History, III (1997), 265–294.

29 

Petri, Storia economica, 336–347; Harold James and Kevin H. O’Rourke, “Italy and the First Age of Globalization, 1861–1940,” Bank of Italy Economic History Working Papers, XVI (2011), 3, available at http://www.bancaditalia.it/pubblicazioni/pubsto/quastoeco/QSE_16/QSEn_16.pdf (accessed October 6, 2013); Gualerni, Storia dell’Italia industriale; Marcello De Cecco, L’economia di Lucignolo: Opportunità e vincoli dello sviluppo italiano (Rome, 2000); Felice and Carreras, “When Did Modernization Begin?”

30 

gdp showed a “miraculous” trend in most countries of Western Europe from 1950 to 1973, which became known as “Europe’s golden age.” For an economic history of the Reconstruction and the “Italian miracle,” see Guido Crainz, Storia del miracolo italiano: culture, identità, trasformazioni fra anni cinquanta e sessanta (Rome, 2005); Nicholas Crafts and Marco Magnani, The Golden Age and the Second Globalization in Italy, in Toniolo (ed.), Oxford Handbook, 69–107. Zamagni, Dalla periferia al centro, 409–481; idem (ed.), Come perdere la guerra e vincere la pace: l’economia italiana tra guerra e dopoguerra, 1938–1947 (Bologna, 1997); Francesca Fauri, Il piano Marshall e l’Italia (Bologna, 2010); idem, L’Italia e l’integrazione economica europea, 1947–2000 (Bologna, 2001); Ciocca, Ricchi per sempre? 228–284. For the position of Italy in the new monetary system, see Virginia Di Nino, Barry Eichengreen, and Massimo Sbracia, “Real Exchange Rates, Trade and Growth,” in Toniolo (ed.), Oxford Handbook, 351–377.

31 

Fabrizio Barca and Sandro Trento, “State Ownership and the Evolution of Italian Corporate Governance,” Industrial and Corporate Change, VI (1997), 533–560.

32 

Ivan Paris, “White Goods in Italy during a Golden Age,” Journal of Interdisciplinary History, I (2013), 83–110. In 1964, Italy became the third country, after the Soviet Union and the United States, to launch a satellite; it launched another one in 1967. See Vera Zamagni, Finmeccanica: Competenze che vengono da lontano (Bologna, 2009), 225. Franco Amatori, “Entrepreneurial Typologies in the History of Industrial Italy (1880–1960): A Review Article,” Business History Review, III (1980), 359–386; idem, “Entrepreneurial Typologies in the History of Industrial Italy: Reconsiderations,” ibid., I (2011), 151–180; Colli and Vasta, “Introduction: Forms of Enterprise in 20th Century Italy,” in idem (eds.), Forms of Enterprise in 20th Century Italy: Boundaries, Structures and Strategies (Cheltenham, 2010), 1–21.

33 

Felice, “State Ownership and International Competitiveness: The Italian Finmeccanica from Alfa Romeo to Aerospace and Defence,” Enterprise and Society, XI (2010), 594–635; Rinaldi and Vasta, “The Italian Corporate Network after the ‘Golden Age’ (1972–1983): From Centrality to Marginalization of State-Owned Enterprises,” ibid., XIII (2012), 378–413.

34 

Giacomo Becattini, “Dal ‘settore’ industriale al ‘distretto’ industrial: Alcune considerazioni sull’unità di indagine dell’economia industriale,” Rivista di economia e politica industriale, I (1979), 7–21. For critics see, De Cecco, L’economia di Lucignolo, 185–189.

35 

Salvatore Rossi, Aspetti della politica economica italiana dalla crisi del 1992–93 a quella del 2008–09, in Maurizio Ciaschini and Gian Cesare Romagnoli (eds.), L’economia italiana: metodi di analisi, misurazione e nodi strutturali: Studi per Guido M. Rey (Milan, 2011), 310; Luca Paolazzi and Mauro Sylos Labini, L’Italia al bivio: Riforme o declino, la lezione dei paesi di successo (Rome, 2013).

36 

Zamagni, Industrializzazione e squilibri regionali in Italia: Bilancio dell’età giolittiana (Bologna 1978). Official statistics for regional gdp were not published until 1970. See svimez, I conti del Mezzogiorno e del Centro-Nord nel ventennio 1970–1989 (Bologna, 1993). Alfredo G. Esposto produced estimates for 1871 (macro-regions), 1891, and 1911 in “Estimating Regional Per Capita Income: Italy, 1861–1914,” Journal of European Economic History, III (1997), 585–604. svimez produced estimates for 1938 and 1951 in Un secolo di statistiche storiche italiane: Nord e Sud, 1861–1961 (Rome, 1961). Daniele and Malanima produced annual estimates from 1861 to 1951, by linking estimates by Federico, Fenoaltea, and Felice, with the assumption that, for each sector of economic activity (agriculture, industry, and services), the regional cycles would be the same as the national cycle. See Daniele and Malanima, “Il prodotto delle regioni e il divario Nord-Sud in Italia (1861–2004),” Rivista di Politica Economica, III–IV (2007), 267–315; idem, Il divario Nord-Sud in Italia: 1861–2011 (Soveria Mannelli, 2011); Federico, “Le nuove stime della produzione agricola italiana, 1860–1910: primi risultati e implicazioni,” Rivista di Storia Economica, III (2003), 359–381; Fenoaltea, “Peeking Backward: Regional Aspects of Industrial Growth in Post-Unification Italy,” Journal of Economic History, IV (2003), 1059–1102; Felice, “Il reddito delle regioni italiane nel 1938 e nel 1951: Una stima basata sul costo del lavoro,” Rivista di Storia Economica, I (2005), 3–30; idem, “Il valore aggiunto regionale: Una stima per il 1891 e per il 1911 e alcune elaborazioni di lungo periodo (1891–1971),” ibid., III (2005), 83–124. This section is based on Felice, “Regional Value Added in Italy (1891–2001) and the Foundation of a Long Term Picture,” Economic History Review, III (2011), 929–950, and on hitherto unpublished estimates for 1871 and 1931.

37 

For social indicators and transport and credit infrastructures, see Vecchi (ed.), In ricchezza e in povertà: Il benessere degli italiani dall’Unità a oggi (Bologna, 2011); Felice and Vasta, “Passive Modernization? The New Human Development Index and Its Components in Italy’s Regions (1871–2007),” European Review of Economic History, I (2015), available at doi:10.1093/ereh/heu018; Zamagni, Dalla periferia al centro, 42; Andrea Giuntini, Nascita, sviluppo e tracollo della rete infrastrutturale, in Amatori et al. (eds.), Storia d’Italia: Annali, XV, L’industria (Turin, 1999), 597; Joan R. Rosés, Julio Martínez-Galarraga, and Daniel A. Tirado, “The Upswing of Regional Income Inequality in Spain (1860–1930),” Explorations in Economic History, II (2010), 244–257; Max-Stephan Schulze, “Regional Income Dispersion and Market Potential in the Late Nineteenth Century Habsburg Empire,” London School of Economics working paper, 106/07 (2007), available at http://www.lse.ac.uk/economicHistory/pdf/WP106schulze.pdf (accessed October 6, 2013).

38 

Between 1911 and 1951, the percentage of agricultural labor in southern Italy did not decrease (remaining at around 60%), while in the northwest, it fell from 47% to 28% (Felice, “Regional Value Added,” 938).

39 

For the policies of the Fascist regime, see Piero Bevilacqua, Le campagne del Mezzogiorno tra fascismo e dopoguerra: il caso della Calabria (Turin, 1980); Felice, Divari regionali, 124–126, 197.

40 

Felice, “Regional Development: Reviewing the Italian Mosaic,” Journal of Modern Italian Studies, I (2010), 72–73; Antonio La Spina, La politica per il Mezzogiorno (Bologna, 2003); Felice, Divari regionali; Amedeo Lepore, “La valutazione dell’operato della Cassa per il Mezzogiorno e il suo ruolo strategico per lo sviluppo del Paese,” Rivista Giuridica del Mezzogiorno, XII (2011), 281–317; Amatori, “Un profilo d’insieme: l’età dell’IRI,” in idem (ed.), Storia dell’IRI. II. Il miracolo economico e il ruolo dell’IRI, 1949–1972 (Rome, 2013), 30–39; Augusto De Benedetti, “L’IRI e il Mezzogiorno: Una interpretazione,” in Amatori (ed.), Il miracolo economico, 563–673; Felice, “Le politiche regionali in Italia e nel Regno Unito (1950–1989),” Rivista economica del Mezzogiorno, I–II (2002), 175–235.

41 

See Piero Bevilacqua, Breve storia dell’Italia meridionale dall’Ottocento a oggi (Rome, 1993), 126–132; Carlo Trigilia, Sviluppo senza autonomia: Effetti perversi delle politiche nel Mezzogiorno (Bologna, 1992). The Cassa per il Mezzogiorno, which was dissolved in 1984, was followed by the short-lived Agensud (1986–1992).

42 

For the northeastern and central regions, see Aldo Bagnasco, Tre Italie: La problematica territoriale dello sviluppo italiano (Bologna, 1977); Becattini, “Dal settore al distretto.” Per-capita gdp differences between the various geographical macro-regions cannot even be explained by the price differences found in these areas. Brunetti, Felice, and Vecchi (“Reddito”) showed that correcting gdp to allow for differences in purchasing power does not change the key features of the historical picture described in Figure 5. Felice, “Regional Value Added,” 937–941; idem, “Regional Convergence in Italy (1891–2001): Testing Human and Social Capital,” Cliometrica, III (2012), 267–306; idem, Perché il Sud è rimasto indietro (Bologna, 2013). According to the neoclassical trade theory, differences in per capita incomes are due to differences in factor endowments and factor prices: Within a unified state, if convergence in factor endowments (via decreasing returns in the production function) is prevented by conditioning variables, there can be convergence in factor prices but also divergence in income. See Matthew J. Slaughter, “Economic Development and International Trade,” American Economic Review, II (1997), 194–199. The alternative new economic-geography (neg) approach focuses instead on the demand side, by looking at the size of the market and Marshallian externalities that favor increasing returns and productivity gains (divergence) but at the cost of congestion (convergence): See Masahisa Fujita, Paul Krugman, and Anthony J. Venables, The Spatial Economy: Cities, Regions, and International Trade (New York, 1999). Hence, most of the income inequality would be attributable to differences in within-sector productivity rather than differences in the employment rate and structural change. For an application of the neg framework to the Italian case, see Brian A’Hearn and Venables, “Regional Disparities: Internal Geography and External Trade,” in Toniolo (ed.), Oxford Handbook, 599–630.

43 

Conference Board, “Total Economy Database” (2013), available at http://www.conference-board.org/data/economydatabase/ (accessed October 6, 2013). That all of the comparisons are made through the ppp measured in 1990 Geary-Khamis international dollars is likely to create a distortion for the early periods. For the main advanced countries, current price ppps have been estimated by Leandro Prados de la Escosura in benchmark years spanning from 1820 to 1990, by retropolating the relationship between ppps and basic economic characteristics from the second half of the twentieth century: According to Prados de la Escosura, “International Comparisons of Real Product, 1820–1990: An Alternative Data Set,” Explorations in Economic History, I (2000), 1–41, because Italy in 1860 had a real gdp per capita, compared to the United States, lower (0.641) than the one estimated by Maddison (0.722), Italy’s performance over the long run would be better than that of the United States. The figures of both Prados and Maddison (his old ones), however, are based on Maddison’s series of Italy’s gdp: See Maddison, “A Revised Estimate of Italian Economic Growth, 1861–1989,” Banca Nazionale del Lavoro Quarterly Review, CLXXVII (1992), 225–241. For the Liberal age, the estimate was based on constant prices from 1870, thus resulting in a lower gdp in 1861 (and higher growth rate) than our estimate at 1911 prices. In this section, we use Maddison’s 1990 ppps because those by Prados are only available for a limited number of countries. For a positive judgment about Italy's long-run economic performance, see Nicola Rossi, Toniolo, and Vecchi, “Introduzione,” in Vecchi (ed.), In ricchezza e in povertà: Il benessere degli italiani dall’Unità a oggi (Bologna, 2011), XI–XXVII.

44 

For the Italian convergence during the Golden Age, see Toniolo, “Europe’s Golden Age, 1950–1973: Speculations from a Long-Run Perspective,” Economic History Review, II (1998), 252. Italy’s average lower rate of growth is not a consequence of the “China effect.” If we compare Italy’s relative growth with that of the rest of the world, after excluding the most dynamic and demographically important countries (Brazil, India, and China), the conclusions reported in the text do not change: Between 1950 and 1992, Italy grew faster than the rest of the world (+2.4% per year, on average), whereas between 1992 and 2011, it grew less rapidly (−0.9% per year). World averages are population-weighted.

45 

For convergence (and divergence) in the second half of the twentieth century, see Moses Abramovitz and Paul A. David, “Convergence and Deferred Catch-Up: Productivity Leadership and the Waning of American Exceptionalism” (1994), available at http://citeseerx.ist.psu.edu/viewdoc/summary?doi=10.1.1.123.2219 (accessed October 6, 2013); for Italy, Toniolo, “Overview.”

46 

In comparison with Germany’s, Italy’s gdp per capita went from 92.2% (2002) to 78.1% (2011), but during the same period Italy’s gdp per hour reduced only from 83 to 76.5; in comparison with France’s, Italy’s gdp per capita went from 98.6 to 90.0 and its gdp per hour from 81.0 to 76.5. Conversely, when compared with the United States, Italy’s gdp per capita decreased from 70.8 to 63.8 and its gdp per hour from 81.0 to 70.6. Italy’s two variables were identical in comparison with those of Britain, which was then arguably in an intermediate position between the United States and the Euro’s “core”: Italy’s gdp per capita went from 92.7 to 82.2 and its gdp per hour from 96.6 to 86.2 (oecd, “StatExtracts”).

47 

For French incredulity about Italian automobiles, see Louis Bonnefon-Craponne, L’Italie au travail (Paris, 1916), 114; De Cecco, “The Italian Economy Seen from Abroad,” in Toniolo (ed.), Oxford Handbook, 134–154.

48 

Toniolo and Vincenzo Visco (eds.), Il declino economico dell’Italia: Cause e rimedi (Milan, 2004).

49 

Thomas Macaulay’s quotation, a response to the poet Robert Southey in 1930, is cited in Barry Supple, The Economic History of Britain since 1700 (New York, 1994), 442; Toniolo, “Overview.”

50 

Brandolini and Vecchi, “Standards of Living.” Reporters without Borders, “World Press Freedom Index 2013” (2013), available at http://en.rsf.org/press-freedom-index-2013,1054.html (accessed October 6, 2013). Transparency International, “Corruption Perceptions Index 2012” (2012), available at http://www.transparency.org/cpi2012/results (accessed October 6, 2013). Freedom House, “Freedom in the World 2013” (2013), available at http://www.freedomhouse.org (accessed October 6, 2013).

APPENDIX I: SOURCES AND METHODS

The Sources for Italy’s gdp, 1861–2011

Industry: for the years 1861–1913, Stefano Fenoaltea, “La crescita economica dell’Italia postunitaria: le nuove serie storiche,” Rivista di Storia Economica, II (2005), 91–121; idem, “Il valore aggiunto dell’industria nel 1911,” in Guido M. Rey (ed.), I conti economici dell’Italia. II. Una stima del valore aggiunto per il 1911 (Rome, 1992), 105–190; for 1911, idem and Carlo Bardini, “Il valore aggiunto dell’industria,” in Rey (ed.), I conti economici dell’Italia. III. Il valore aggiunto per gli anni 1891, 1938, 1951 (Rome, 2000), 113–238; Felice and Albert Carreras, “When Did Modernization Begin? Italy’s Industrial Growth Reconsidered in Light of New Value-Added Series, 1911–1951,” Explorations in Economic History, IV (2012), 443–460.

Agriculture: Giovanni Federico, “Il valore aggiunto dell’agricoltura,” in Rey (ed.), Una stima del valore aggiunto per il 1911, 3–103; idem, “Una stima del valore aggiunto dell’agricoltura italiana,” in Rey (ed.), Il valore aggiunto per gli anni 1891, 1938, 1951, 3–112; idem, “Le nuove stime della produzione agricola italiana, 1860–1910: primi risultati e implicazioni,” Rivista di Storia Economica, III (2003), 359–381, for the years 1861 to 1911.

Services: Vera Zamagni, “Il valore aggiunto del settore terziario italiano nel 1911,” in Rey (ed.), Una stima del valore aggiunto per il 1911, 191–239; Zamagni and Patrizia Battilani, “Stima del valore aggiunto dei servizi,” in Rey (ed.), Il valore aggiunto per agli anni 1891, 1938, 1951, 239–371; Battilani, Felice, and Zamagni, Il valore aggiunto dei servizi a prezzi correnti (1861–1951) (Rome, 2011).

Credit: Riccardo De Bonis, Fabio Farabullini, Miria Rocchelli, and Alessandra Salvio, Il valore aggiunto del settore del credito dal 1861 al 2010 (Rome, 2011); for 1970, estimates by Rey, Luisa Picozzi, Paolo Piselli, and Sandro Clementi, “Una revisione dei conti nazionali dell’Italia (1951–1970),” Banca d’Italia, Quaderni di Storia Economica, XXVII (2012), available at http://www.bancaditalia.it/pubblicazioni/pubsto/quastoeco/quadsto_27 (accessed October 6, 2013), concerning resource accounting and allocation; for method, Alberto Baffigi, “National Accounts, 1861–2011,” in Gianni Toniolo (ed.), The Oxford Handbook of the Italian Economy since Unification (New York, 2013), 157–186; Alessandro Brunetti, Felice, and Vecchi, “Reddito,” in Vecchi (ed.), In ricchezza e in povertà: Il benessere degli italiani dall’Unità a oggi (Bologna, 2011), 209–234.

The Sources for Italy’s Regional gdp, 1871–2009

For the years 1871–1951, the regional estimates are obtained by dividing the new estimates of national gdp by regional employment and then correcting the results with the nominal wages per region that approximate the differences in productivity per worker. This procedure, formalized by Frank Geary and Tom Stark, “Examining Ireland’s Post-Famine Economic Growth Performance,” Economic Journal, CXII (2002), 919–935, is widely used internationally. Nicholas Crafts, “Regional gdp in Britain, 1871–1911: Some Estimates,” Scottish Journal of Political Economy, I (2005), 54–64; Max-Stephan Schulze, “Regional Income Dispersion and Market Potential in the Late Nineteenth Century Habsburg Empire,” London School of Economics working paper, 106/07 (2007), available at http://www.lse.ac.uk/economicHistory/pdf/WP106schulze.pdf (accessed October 6, 2013); Kerstin Enflo, Martin Henning, and Lennart Schon, “Swedish Regional gdp 1855–2000: Estimations and General Trends in the Swedish Regional System,” Universidad Carlos III de Madrid, Working Papers in Economic History, III (2010), available at http://orff.uc3m.es/bitstream/handle/10016/7125 (accessed October 6, 2013); Joan R. Rosés, Julio Martínez-Galarraga, and Daniel A. Tirado, “The Upswing of Regional Income Inequality in Spain (1860–1930),” Explorations in Economic History, II (2010), 244–257; Pierre-Philippe Combes, Miren Lafourcade, Jacques-François Thisse, and Jean-Claude Toutain, “The Rise and Fall of Spatial Inequalities in France: A Long-Run Perspective,” Explorations in Economic History, II (2011), 243–271. The procedure is based on the assumption that capital gains are distributed along the lines of incomes from labor—that is, that the elasticity of substitution between capital and labor is equal to one.

The method becomes more effective with the degree of sector decomposition. In our case, regarding the four original benchmark years of 1891, 1911, 1938, and 1951, we can refer to an exceptionally high level of detail unparalleled in other countries. The workforce sources separately considers data about women and child labor, and are divided by a broad number of sectors (for industry and services, about 130 sectors in 1891, 160 in 1911, 400 in 1938, and 100 in 1951). The wage data have an identical sector decomposition in 1938 and 1951, a less detailed but still high one in 1891 (thirty sectors) and 1911 (thirty-four sectors). The estimates for 1871 and 1931 are less detailed, slightly more than twenty sectors in both cases: Felice, “Estimating Regional gdp in Italy (1871–2001): Sources, Methodology, and Results,” Universidad Carlos III de Madrid, Working Papers in Economic History, VII (2009), available at http://e-archivo.uc3m.es/handle/10016/5334 (accessed October 6, 2013).

For 1871, given the lack of data on wages for the tertiary sector, the productivity of services is estimated by assuming that in every region the ratio between the productivity of individual branches of services and industry as a whole was similar to that of 1891. In all of the benchmarks, a different procedure was used with regard to agriculture. It was based on the direct reconstruction of saleable gross production, calculated by Federico (“Le nuove stime”) for the years 1891, 1911, 1938, and 1951, or reconstructed from scratch by means of official sources for 1871 (Felice, “Estimating regional gdp”) and 1931. For part of the industrial sectors from 1871 to 1911, we used the new estimates produced by Carlo Ciccarelli and Fenoaltea, “Mining Production in Italy, 1861–1913: National and Regional Time Series,” Rivista di Storia Economica, II (2006), 141–208; idem, “The Chemicals, Coal and Petroleum Products, and Rubber Industries in Italy’s Regions, 1861–1913: Time-Series Estimates,” Rivista di Storia Economica, I (2008), 3–58; idem, “The Growth of the Utilities Industries in Italy’s Regions, 1861–1913,” ibid., II (2008), 175–206; idem, “Construction in Italy’s regions, 1861–1913,” ibid., III (2008), 303–340; idem, La produzione industriale delle regioni d’Italia, 1861–1913: una ricostruzione quantitativa. I. Le industrie non manifatturiere (Rome, 2009); idem, “Shipbuilding in Italy, 1861–1913: The Burden of the Evidence,” Historical Social Research, II (2009), 333–373; private correspondence with the authors in 2009; idem, “Metalmaking in Italy, 1861–1913: National and Regional Time Series,” Rivista di Storia Economica, I (2010), 121–153; idem, “The Rail-Guided Vehicles Industry in Italy, 1861–1913: The Burden of the Evidence,” Research in Economic History, XXVIII (2012), 43–115. These estimates are based mainly on employment and wages but in some cases also on industrial plants and direct production data. For the revision of the estimates of 1891 and 1911, and a comparison of the various hypotheses, see Felice, “Regional Value Added in Italy (1891–2001): Estimates, Elaborations,” Universidad Carlos III de Madrid, Working Papers in Economic History, VIII (2009), available at http://e-archivo.uc3m.es/handle/10016/5332 (accessed October 6, 2013). Those estimates were also used for revising regional production by sector in 1891, necessary for the 1871 estimate.

Estimates from 1961 onward are from official sources: Guglielmo Tagliacarne, “Calcolo del reddito prodotto dal settore privato e dalla pubblica amministrazione nelle provincie e regioni d’Italia nel 1961 e confronto con gli anni 1960 e 1951: Indici di alcuni consumi e del risparmio bancario,” Moneta e credito, LIX (1962), 339–419; svimez, I conti; istat (Istituto centrale di statistica), Conti economici regionali: anni 1980–92 (Rome, 1995); idem, “Sistemi di indicatori territoriali, contabilità nazionale” (2012), available at http://sitis.istat.it/sitis/html/ (accessed October 6, 2013).

APPENDIX II: GDP STATISTICS

Table A.1 

Table A.1

gdp per Person and per Worker, Agriculture, Industry, and Services (1861–2011)

yeargdp per persongdp per worker
total (2011 euros)% agr.% ind.% serv.total (2011 euros)agr./tot.ind./tot.ser./tot.
1861 1,971 48.70 23.32 27.98 6,103 0.77 1.32 1.47 
1862 1,996 48.42 22.70 28.88 6,178 0.76 1.31 1.51 
1863 2,044 47.55 22.55 29.89 6,321 0.75 1.32 1.55 
1864 2,047 46.19 23.14 30.67 6,333 0.72 1.38 1.58 
1865 2,171 48.07 21.71 30.22 6,720 0.75 1.31 1.56 
1866 2,167 46.44 22.29 31.26 6,704 0.72 1.38 1.59 
1867 1,979 47.93 23.00 29.07 6,132 0.74 1.44 1.47 
1868 2,019 48.87 21.87 29.26 6,222 0.76 1.40 1.47 
1869 2,045 47.51 22.79 29.70 6,284 0.73 1.48 1.49 
1870 2,095 48.33 22.07 29.60 6,448 0.75 1.46 1.48 
1871 2,049 47.31 23.03 29.65 6,302 0.73 1.55 1.47 
1872 2,003 46.76 23.67 29.57 6,119 0.72 1.56 1.46 
1873 1,993 48.83 22.96 28.21 6,043 0.76 1.48 1.38 
1874 2,096 50.52 21.00 28.48 6,311 0.80 1.33 1.37 
1875 2,107 46.17 23.08 30.76 6,283 0.73 1.43 1.47 
1876 2,055 44.77 23.43 31.80 6,089 0.72 1.42 1.51 
1877 2,068 47.33 23.14 29.53 6,110 0.76 1.38 1.39 
1878 2,120 48.09 22.02 29.89 6,235 0.78 1.29 1.40 
1879 2,126 47.34 21.01 31.66 6,242 0.77 1.21 1.49 
1880 2,159 48.51 20.63 30.86 6,300 0.80 1.17 1.44 
1881 2,225 46.84 21.46 31.70 6,423 0.78 1.19 1.47 
1882 2,252 46.71 22.10 31.20 6,562 0.77 1.25 1.43 
1883 2,272 44.81 22.32 32.87 6,442 0.77 1.11 1.54 
1884 2,238 42.69 22.68 34.62 6,452 0.72 1.18 1.60 
1885 2,271 43.12 23.08 33.80 6,675 0.72 1.27 1.53 
1886 2,321 43.65 22.99 33.36 6,949 0.72 1.33 1.49 
1887 2,379 41.66 22.31 36.02 7,234 0.68 1.38 1.58 
1888 2,367 40.98 22.19 36.84 7,193 0.68 1.33 1.61 
1889 2,295 41.84 22.13 36.02 6,871 0.71 1.21 1.60 
1890 2,296 43.95 21.34 34.71 6,996 0.73 1.22 1.53 
1891 2,327 44.53 20.93 34.54 7,266 0.73 1.32 1.49 
1892 2,330 42.11 21.33 36.56 7,419 0.68 1.45 1.56 
1893 2,366 41.60 21.63 36.77 7,686 0.66 1.61 1.55 
1894 2,379 41.31 21.11 37.58 7,724 0.66 1.50 1.59 
1895 2,399 42.97 20.45 36.58 7,781 0.69 1.40 1.56 
1896 2,435 42.11 20.67 37.23 7,841 0.69 1.33 1.60 
1897 2,439 42.11 20.38 37.50 7,749 0.70 1.21 1.63 
1898 2,429 41.81 20.78 37.41 7,775 0.70 1.24 1.62 
1899 2,456 41.40 21.91 36.69 7,790 0.70 1.23 1.61 
1900 2,521 41.72 20.85 37.44 7,956 0.71 1.12 1.65 
1901 2,562 41.60 21.34 37.06 8,068 0.71 1.12 1.63 
1902 2,603 40.75 21.63 37.62 8,294 0.69 1.18 1.64 
1903 2,626 41.15 21.20 37.65 8,376 0.70 1.13 1.65 
1904 2,672 40.73 21.02 38.25 8,512 0.70 1.11 1.67 
1905 2,727 39.84 21.98 38.18 8,695 0.69 1.14 1.67 
1906 2,820 40.06 22.36 37.57 8,987 0.70 1.14 1.65 
1907 2,870 39.85 23.74 36.40 9,087 0.70 1.18 1.59 
1908 2,930 37.68 23.90 38.42 9,076 0.68 1.09 1.70 
1909 2,954 37.06 24.67 38.27 9,231 0.67 1.14 1.68 
1910 2,957 36.41 25.02 38.56 9,322 0.65 1.18 1.69 
1911 2,989 38.47 23.78 37.75 9,455 0.69 1.10 1.66 
1912 3,004 37.21 25.32 37.48 9,480 0.67 1.19 1.65 
1913 3,149 37.96 24.64 37.40 9,729 0.69 1.11 1.67 
1914 2,987 36.89 24.76 38.35 9,126 0.66 1.12 1.72 
1915 2,825 37.16 22.27 40.57 8,837 0.65 1.11 1.78 
1916 3,054 38.31 21.98 39.71 9,518 0.67 1.11 1.73 
1917 3,071 37.29 23.36 39.35 9,386 0.65 1.15 1.73 
1918 3,005 39.43 23.31 37.27 8,961 0.69 1.13 1.65 
1919 2,906 40.06 21.96 37.98 8,326 0.71 1.05 1.67 
1920 2,960 42.54 21.58 35.89 8,314 0.76 1.02 1.57 
1921 2,843 41.65 21.47 36.88 8,120 0.73 1.12 1.57 
1922 3,055 38.78 24.30 36.92 8,601 0.69 1.22 1.55 
1923 3,300 37.10 25.44 37.46 9,373 0.66 1.29 1.56 
1924 3,357 33.56 27.40 39.04 9,406 0.61 1.29 1.66 
1925 3,577 35.58 27.46 36.96 9,813 0.66 1.21 1.57 
1926 3,579 36.32 26.44 37.24 9,787 0.68 1.15 1.55 
1927 3,461 33.07 27.33 39.60 9,637 0.61 1.27 1.60 
1928 3,635 33.96 27.14 38.89 10,182 0.63 1.24 1.59 
1929 3,788 32.48 28.54 38.98 10,598 0.61 1.25 1.64 
1930 3,585 28.18 30.47 41.34 10,260 0.52 1.42 1.72 
1931 3,506 28.25 28.21 43.54 10,425 0.50 1.45 1.79 
1932 3,548 31.36 25.03 43.61 10,862 0.56 1.43 1.67 
1933 3,484 27.66 28.64 43.69 10,802 0.50 1.63 1.64 
1934 3,452 27.45 28.89 43.66 10,750 0.50 1.57 1.62 
1935 3,621 29.93 27.98 42.09 11,085 0.57 1.34 1.56 
1936 3,466 27.89 28.77 43.34 10,611 0.55 1.36 1.55 
1937 3,779 28.99 29.53 41.48 11,341 0.59 1.26 1.52 
1938 3,853 28.55 30.36 41.09 11,111 0.61 1.14 1.54 
1939 4,011 28.42 30.26 41.31 11,651 0.61 1.13 1.54 
1940 3,837 27.89 29.79 42.32 11,183 0.61 1.12 1.53 
1941 3,709 32.14 25.53 42.33 10,821 0.71 0.97 1.49 
1942 3,479 39.12 20.20 40.68 10,132 0.88 0.77 1.39 
1943 2,940 43.42 18.45 38.14 8,541 0.99 0.70 1.27 
1944 2,423 52.01 14.83 33.16 7,122 1.18 0.56 1.12 
1945 2,196 48.40 16.79 34.81 6,530 1.10 0.62 1.20 
1946 2,989 42.18 27.85 29.97 9,009 0.95 1.02 1.05 
1947 3,527 36.86 32.22 30.92 10,722 0.84 1.18 1.08 
1948 3,809 34.01 32.70 33.29 11,660 0.78 1.19 1.16 
1949 4,071 30.24 33.43 36.33 12,557 0.70 1.21 1.25 
1950 4,407 29.24 33.38 37.38 13,725 0.68 1.20 1.29 
1951 4,813 25.85 35.65 38.50 15,106 0.60 1.28 1.32 
1952 5,006 24.13 35.11 40.76 15,457 0.58 1.24 1.36 
1953 5,338 24.86 34.50 40.64 16,169 0.62 1.18 1.33 
1954 5,500 22.73 35.42 41.84 16,306 0.58 1.19 1.35 
1955 5,838 21.99 35.35 42.66 17,181 0.59 1.16 1.33 
1956 6,087 20.66 35.07 44.27 17,653 0.57 1.13 1.34 
1957 6,397 19.07 35.65 45.27 18,274 0.56 1.12 1.32 
1958 6,720 19.47 35.16 45.36 18,958 0.59 1.10 1.30 
1959 7,151 17.51 35.87 46.61 20,008 0.54 1.11 1.32 
1960 7,605 15.22 37.21 47.58 21,010 0.49 1.13 1.33 
1961 8,158 15.62 37.37 47.01 22,094 0.54 1.08 1.30 
1962 8,650 15.05 37.65 47.29 23,638 0.53 1.07 1.29 
1963 9,110 13.77 37.88 48.34 25,136 0.53 1.04 1.30 
1964 9,386 13.17 37.37 49.46 25,733 0.53 1.02 1.29 
1965 9,724 12.81 36.34 50.85 27,131 0.51 1.00 1.31 
1966 10,292 12.07 36.22 51.70 28,952 0.50 1.00 1.30 
1967 11,004 11.87 36.47 51.66 30,376 0.51 1.00 1.28 
1968 11,726 10.22 36.98 52.80 32,278 0.47 0.99 1.28 
1969 12,421 10.12 37.56 52.32 33,730 0.50 1.00 1.25 
1970 13,096 8.99 38.62 52.39 35,243 0.48 1.00 1.23 
1971 13,268 8.47 37.66 53.87 35,925 0.45 0.98 1.26 
1972 13,695 7.68 36.87 55.46 37,451 0.44 0.97 1.25 
1973 14,560 8.18 38.09 53.74 39,253 0.49 1.00 1.19 
1974 15,260 7.33 39.68 52.99 40,598 0.46 1.05 1.15 
1975 14,847 7.58 38.08 54.34 39,719 0.49 1.02 1.15 
1976 15,810 7.10 39.07 53.83 41,873 0.47 1.06 1.12 
1977 16,138 6.90 38.37 54.73 42,509 0.48 1.03 1.13 
1978 16,596 6.74 37.45 55.81 43,650 0.47 1.02 1.14 
1979 17,522 6.52 37.26 56.21 45,543 0.47 1.02 1.13 
1980 18,074 6.15 37.51 56.34 46,198 0.46 1.03 1.13 
1981 18,202 5.76 36.54 57.70 46,604 0.45 1.02 1.12 
1982 18,266 5.52 35.68 58.80 46,545 0.46 1.02 1.11 
1983 18,468 5.63 34.55 59.82 46,787 0.47 1.02 1.10 
1984 19,063 5.11 34.29 60.60 48,107 0.44 1.07 1.08 
1985 19,588 4.81 33.75 61.44 49,013 0.44 1.07 1.07 
1986 20,145 4.62 32.81 62.57 49,984 0.44 1.05 1.07 
1987 20,788 4.48 32.56 62.96 51,311 0.44 1.06 1.07 
1988 21,650 4.03 32.23 63.74 52,895 0.42 1.04 1.07 
1989 22,367 3.94 32.55 63.51 54,502 0.44 1.05 1.06 
1990 22,809 3.65 31.58 64.77 55,080 0.42 1.02 1.07 
1991 23,141 3.73 30.65 65.62 55,486 0.44 1.00 1.08 
1992 23,318 3.61 30.15 66.25 56,389 0.43 1.01 1.07 
1993 23,100 3.50 29.77 66.73 57,729 0.44 1.01 1.07 
1994 23,588 3.47 29.76 66.77 59,603 0.45 1.01 1.06 
1995 24,268 3.47 29.89 66.64 61,344 0.46 1.01 1.06 
1996 24,543 3.45 29.31 67.23 61,832 0.47 1.01 1.06 
1997 24,987 3.34 29.08 67.58 62,715 0.47 1.00 1.06 
1998 25,337 3.29 28.80 67.91 63,041 0.48 0.99 1.06 
1999 25,702 3.24 28.18 68.58 63,610 0.50 0.98 1.06 
2000 26,634 3.03 27.72 69.25 64,759 0.48 0.97 1.06 
2001 27,113 2.93 27.29 69.77 64,813 0.47 0.96 1.07 
2002 27,219 2.84 27.01 70.15 64,285 0.47 0.96 1.07 
2003 27,051 2.76 26.39 70.86 63,856 0.48 0.93 1.07 
2004 27,250 2.71 26.42 70.86 64,721 0.48 0.94 1.07 
2005 27,234 2.46 26.26 71.28 65,221 0.45 0.93 1.07 
2006 27,695 2.45 26.63 70.93 65,641 0.45 0.95 1.07 
2007 27,981 2.35 26.99 70.66 66,112 0.45 0.96 1.06 
2008 27,431 2.32 26.55 71.13 65,578 0.45 0.95 1.06 
2009 25,740 2.36 24.75 72.89 63,793 0.45 0.92 1.07 
2010 26,076 2.23 24.93 72.84 65,525 0.42 0.95 1.06 
2011 26,065 2.32 24.44 73.24 65,743 0.45 0.94 1.06 
yeargdp per persongdp per worker
total (2011 euros)% agr.% ind.% serv.total (2011 euros)agr./tot.ind./tot.ser./tot.
1861 1,971 48.70 23.32 27.98 6,103 0.77 1.32 1.47 
1862 1,996 48.42 22.70 28.88 6,178 0.76 1.31 1.51 
1863 2,044 47.55 22.55 29.89 6,321 0.75 1.32 1.55 
1864 2,047 46.19 23.14 30.67 6,333 0.72 1.38 1.58 
1865 2,171 48.07 21.71 30.22 6,720 0.75 1.31 1.56 
1866 2,167 46.44 22.29 31.26 6,704 0.72 1.38 1.59 
1867 1,979 47.93 23.00 29.07 6,132 0.74 1.44 1.47 
1868 2,019 48.87 21.87 29.26 6,222 0.76 1.40 1.47 
1869 2,045 47.51 22.79 29.70 6,284 0.73 1.48 1.49 
1870 2,095 48.33 22.07 29.60 6,448 0.75 1.46 1.48 
1871 2,049 47.31 23.03 29.65 6,302 0.73 1.55 1.47 
1872 2,003 46.76 23.67 29.57 6,119 0.72 1.56 1.46 
1873 1,993 48.83 22.96 28.21 6,043 0.76 1.48 1.38 
1874 2,096 50.52 21.00 28.48 6,311 0.80 1.33 1.37 
1875 2,107 46.17 23.08 30.76 6,283 0.73 1.43 1.47 
1876 2,055 44.77 23.43 31.80 6,089 0.72 1.42 1.51 
1877 2,068 47.33 23.14 29.53 6,110 0.76 1.38 1.39 
1878 2,120 48.09 22.02 29.89 6,235 0.78 1.29 1.40 
1879 2,126 47.34 21.01 31.66 6,242 0.77 1.21 1.49 
1880 2,159 48.51 20.63 30.86 6,300 0.80 1.17 1.44 
1881 2,225 46.84 21.46 31.70 6,423 0.78 1.19 1.47 
1882 2,252 46.71 22.10 31.20 6,562 0.77 1.25 1.43 
1883 2,272 44.81 22.32 32.87 6,442 0.77 1.11 1.54 
1884 2,238 42.69 22.68 34.62 6,452 0.72 1.18 1.60 
1885 2,271 43.12 23.08 33.80 6,675 0.72 1.27 1.53 
1886 2,321 43.65 22.99 33.36 6,949 0.72 1.33 1.49 
1887 2,379 41.66 22.31 36.02 7,234 0.68 1.38 1.58 
1888 2,367 40.98 22.19 36.84 7,193 0.68 1.33 1.61 
1889 2,295 41.84 22.13 36.02 6,871 0.71 1.21 1.60 
1890 2,296 43.95 21.34 34.71 6,996 0.73 1.22 1.53 
1891 2,327 44.53 20.93 34.54 7,266 0.73 1.32 1.49 
1892 2,330 42.11 21.33 36.56 7,419 0.68 1.45 1.56 
1893 2,366 41.60 21.63 36.77 7,686 0.66 1.61 1.55 
1894 2,379 41.31 21.11 37.58 7,724 0.66 1.50 1.59 
1895 2,399 42.97 20.45 36.58 7,781 0.69 1.40 1.56 
1896 2,435 42.11 20.67 37.23 7,841 0.69 1.33 1.60 
1897 2,439 42.11 20.38 37.50 7,749 0.70 1.21 1.63 
1898 2,429 41.81 20.78 37.41 7,775 0.70 1.24 1.62 
1899 2,456 41.40 21.91 36.69 7,790 0.70 1.23 1.61 
1900 2,521 41.72 20.85 37.44 7,956 0.71 1.12 1.65 
1901 2,562 41.60 21.34 37.06 8,068 0.71 1.12 1.63 
1902 2,603 40.75 21.63 37.62 8,294 0.69 1.18 1.64 
1903 2,626 41.15 21.20 37.65 8,376 0.70 1.13 1.65 
1904 2,672 40.73 21.02 38.25 8,512 0.70 1.11 1.67 
1905 2,727 39.84 21.98 38.18 8,695 0.69 1.14 1.67 
1906 2,820 40.06 22.36 37.57 8,987 0.70 1.14 1.65 
1907 2,870 39.85 23.74 36.40 9,087 0.70 1.18 1.59 
1908 2,930 37.68 23.90 38.42 9,076 0.68 1.09 1.70 
1909 2,954 37.06 24.67 38.27 9,231 0.67 1.14 1.68 
1910 2,957 36.41 25.02 38.56 9,322 0.65 1.18 1.69 
1911 2,989 38.47 23.78 37.75 9,455 0.69 1.10 1.66 
1912 3,004 37.21 25.32 37.48 9,480 0.67 1.19 1.65 
1913 3,149 37.96 24.64 37.40 9,729 0.69 1.11 1.67 
1914 2,987 36.89 24.76 38.35 9,126 0.66 1.12 1.72 
1915 2,825 37.16 22.27 40.57 8,837 0.65 1.11 1.78 
1916 3,054 38.31 21.98 39.71 9,518 0.67 1.11 1.73 
1917 3,071 37.29 23.36 39.35 9,386 0.65 1.15 1.73 
1918 3,005 39.43 23.31 37.27 8,961 0.69 1.13 1.65 
1919 2,906 40.06 21.96 37.98 8,326 0.71 1.05 1.67 
1920 2,960 42.54 21.58 35.89 8,314 0.76 1.02 1.57 
1921 2,843 41.65 21.47 36.88 8,120 0.73 1.12 1.57 
1922 3,055 38.78 24.30 36.92 8,601 0.69 1.22 1.55 
1923 3,300 37.10 25.44 37.46 9,373 0.66 1.29 1.56 
1924 3,357 33.56 27.40 39.04 9,406 0.61 1.29 1.66 
1925 3,577 35.58 27.46 36.96 9,813 0.66 1.21 1.57 
1926 3,579 36.32 26.44 37.24 9,787 0.68 1.15 1.55 
1927 3,461 33.07 27.33 39.60 9,637 0.61 1.27 1.60 
1928 3,635 33.96 27.14 38.89 10,182 0.63 1.24 1.59 
1929 3,788 32.48 28.54 38.98 10,598 0.61 1.25 1.64 
1930 3,585 28.18 30.47 41.34 10,260 0.52 1.42 1.72 
1931 3,506 28.25 28.21 43.54 10,425 0.50 1.45 1.79 
1932 3,548 31.36 25.03 43.61 10,862 0.56 1.43 1.67 
1933 3,484 27.66 28.64 43.69 10,802 0.50 1.63 1.64 
1934 3,452 27.45 28.89 43.66 10,750 0.50 1.57 1.62 
1935 3,621 29.93 27.98 42.09 11,085 0.57 1.34 1.56 
1936 3,466 27.89 28.77 43.34 10,611 0.55 1.36 1.55 
1937 3,779 28.99 29.53 41.48 11,341 0.59 1.26 1.52 
1938 3,853 28.55 30.36 41.09 11,111 0.61 1.14 1.54 
1939 4,011 28.42 30.26 41.31 11,651 0.61 1.13 1.54 
1940 3,837 27.89 29.79 42.32 11,183 0.61 1.12 1.53 
1941 3,709 32.14 25.53 42.33 10,821 0.71 0.97 1.49 
1942 3,479 39.12 20.20 40.68 10,132 0.88 0.77 1.39 
1943 2,940 43.42 18.45 38.14 8,541 0.99 0.70 1.27 
1944 2,423 52.01 14.83 33.16 7,122 1.18 0.56 1.12 
1945 2,196 48.40 16.79 34.81 6,530 1.10 0.62 1.20 
1946 2,989 42.18 27.85 29.97 9,009 0.95 1.02 1.05 
1947 3,527 36.86 32.22 30.92 10,722 0.84 1.18 1.08 
1948 3,809 34.01 32.70 33.29 11,660 0.78 1.19 1.16 
1949 4,071 30.24 33.43 36.33 12,557 0.70 1.21 1.25 
1950 4,407 29.24 33.38 37.38 13,725 0.68 1.20 1.29 
1951 4,813 25.85 35.65 38.50 15,106 0.60 1.28 1.32 
1952 5,006 24.13 35.11 40.76 15,457 0.58 1.24 1.36 
1953 5,338 24.86 34.50 40.64 16,169 0.62 1.18 1.33 
1954 5,500 22.73 35.42 41.84 16,306 0.58 1.19 1.35 
1955 5,838 21.99 35.35 42.66 17,181 0.59 1.16 1.33 
1956 6,087 20.66 35.07 44.27 17,653 0.57 1.13 1.34 
1957 6,397 19.07 35.65 45.27 18,274 0.56 1.12 1.32 
1958 6,720 19.47 35.16 45.36 18,958 0.59 1.10 1.30 
1959 7,151 17.51 35.87 46.61 20,008 0.54 1.11 1.32 
1960 7,605 15.22 37.21 47.58 21,010 0.49 1.13 1.33 
1961 8,158 15.62 37.37 47.01 22,094 0.54 1.08 1.30 
1962 8,650 15.05 37.65 47.29 23,638 0.53 1.07 1.29 
1963 9,110 13.77 37.88 48.34 25,136 0.53 1.04 1.30 
1964 9,386 13.17 37.37 49.46 25,733 0.53 1.02 1.29 
1965 9,724 12.81 36.34 50.85 27,131 0.51 1.00 1.31 
1966 10,292 12.07 36.22 51.70 28,952 0.50 1.00 1.30 
1967 11,004 11.87 36.47 51.66 30,376 0.51 1.00 1.28 
1968 11,726 10.22 36.98 52.80 32,278 0.47 0.99 1.28 
1969 12,421 10.12 37.56 52.32 33,730 0.50 1.00 1.25 
1970 13,096 8.99 38.62 52.39 35,243 0.48 1.00 1.23 
1971 13,268 8.47 37.66 53.87 35,925 0.45 0.98 1.26 
1972 13,695 7.68 36.87 55.46 37,451 0.44 0.97 1.25 
1973 14,560 8.18 38.09 53.74 39,253 0.49 1.00 1.19 
1974 15,260 7.33 39.68 52.99 40,598 0.46 1.05 1.15 
1975 14,847 7.58 38.08 54.34 39,719 0.49 1.02 1.15 
1976 15,810 7.10 39.07 53.83 41,873 0.47 1.06 1.12 
1977 16,138 6.90 38.37 54.73 42,509 0.48 1.03 1.13 
1978 16,596 6.74 37.45 55.81 43,650 0.47 1.02 1.14 
1979 17,522 6.52 37.26 56.21 45,543 0.47 1.02 1.13 
1980 18,074 6.15 37.51 56.34 46,198 0.46 1.03 1.13 
1981 18,202 5.76 36.54 57.70 46,604 0.45 1.02 1.12 
1982 18,266 5.52 35.68 58.80 46,545 0.46 1.02 1.11 
1983 18,468 5.63 34.55 59.82 46,787 0.47 1.02 1.10 
1984 19,063 5.11 34.29 60.60 48,107 0.44 1.07 1.08 
1985 19,588 4.81 33.75 61.44 49,013 0.44 1.07 1.07 
1986 20,145 4.62 32.81 62.57 49,984 0.44 1.05 1.07 
1987 20,788 4.48 32.56 62.96 51,311 0.44 1.06 1.07 
1988 21,650 4.03 32.23 63.74 52,895 0.42 1.04 1.07 
1989 22,367 3.94 32.55 63.51 54,502 0.44 1.05 1.06 
1990 22,809 3.65 31.58 64.77 55,080 0.42 1.02 1.07 
1991 23,141 3.73 30.65 65.62 55,486 0.44 1.00 1.08 
1992 23,318 3.61 30.15 66.25 56,389 0.43 1.01 1.07 
1993 23,100 3.50 29.77 66.73 57,729 0.44 1.01 1.07 
1994 23,588 3.47 29.76 66.77 59,603 0.45 1.01 1.06 
1995 24,268 3.47 29.89 66.64 61,344 0.46 1.01 1.06 
1996 24,543 3.45 29.31 67.23 61,832 0.47 1.01 1.06 
1997 24,987 3.34 29.08 67.58 62,715 0.47 1.00 1.06 
1998 25,337 3.29 28.80 67.91 63,041 0.48 0.99 1.06 
1999 25,702 3.24 28.18 68.58 63,610 0.50 0.98 1.06 
2000 26,634 3.03 27.72 69.25 64,759 0.48 0.97 1.06 
2001 27,113 2.93 27.29 69.77 64,813 0.47 0.96 1.07 
2002 27,219 2.84 27.01 70.15 64,285 0.47 0.96 1.07 
2003 27,051 2.76 26.39 70.86 63,856 0.48 0.93 1.07 
2004 27,250 2.71 26.42 70.86 64,721 0.48 0.94 1.07 
2005 27,234 2.46 26.26 71.28 65,221 0.45 0.93 1.07 
2006 27,695 2.45 26.63 70.93 65,641 0.45 0.95 1.07 
2007 27,981 2.35 26.99 70.66 66,112 0.45 0.96 1.06 
2008 27,431 2.32 26.55 71.13 65,578 0.45 0.95 1.06 
2009 25,740 2.36 24.75 72.89 63,793 0.45 0.92 1.07 
2010 26,076 2.23 24.93 72.84 65,525 0.42 0.95 1.06 
2011 26,065 2.32 24.44 73.24 65,743 0.45 0.94 1.06 

sources Per person gdp is based on resident population. Full-time equivalent (fte) workers are from Stephen N. Broadberry, Claire Giordano, and Francesco Zollino, “Productivity, in Toniolo (ed.), The Oxford Handbook of the Italian Economy since Unification (New York, 2013), 187–226; sectoral figures are from data at current prices. All estimates are at present boundaries.

Table A.2 

Table A.2

gdp per Person in Italy’s Regions, 1871–2009 (Euro 2011)

1871
1891
1911
1931
1938
1951
1961
1971
1981
1991
2001
2009
Piedmont 2116 2516 3446 4354 5348 7061 10768 16054 21278 26473 31125 27953 
Aosta Valley 7604 14472 17964 22771 28047 33593 33436 
Liguria 2844 3349 4597 5763 6469 7778 10678 15417 19858 26867 29499 27490 
Lombardy 2272 2681 3566 4319 5356 7369 11992 17752 23735 29111 35220 32355 
Northwest 2276 2692 3646 4529 5510 7335 11470 16969 22188 28070 33484 30656 
Trentino Alto Adige n.a. n.a. n.a. 3211 3664 5092 9495 13440 20441 27769 35084 33230 
Veneto 2071 1864 2579 2615 3236 4721 8565 13148 19640 26057 30665 29446 
Friuli Venezia Giulia n.a. n.a. n.a. 4424 4573 5362 7505 13307 19840 26867 30366 28880 
Emilia Romagna 1944 2460 3225 3832 4011 5381 9234 15125 23462 27862 33240 31068 
Northeast 2014 2127 2854 3292 3691 5082 8769 13931 21205 26982 32020 30347 
Tuscany 2151 2376 2911 3720 3888 5058 8663 13958 20040 24506 29526 28494 
Marche 1682 2043 2421 2496 3036 4125 7130 12060 19148 23673 26869 26177 
Umbria 2034 2362 2759 3499 3687 4336 6950 12299 17783 21683 25920 23990 
Lazio 2997 3644 4459 4901 4585 5145 9406 14170 18985 26751 30583 30399 
Center 2200 2585 3141 3884 3976 4900 8623 13692 19385 25224 29417 28751 
Abruzzo 1635 1573 2032 2223 2239 2796 5466 10986 15763 20526 22965 21158 
Molise 4960 9248 13524 16893 22504 20592 
Campania 2196 2253 2815 2854 3159 3331 5825 9447 12159 16291 17705 16679 
Puglia 1828 2367 2543 2987 2766 3128 5572 9964 13160 17101 18193 17091 
Basilicata 1371 1722 2194 2461 2185 2267 4797 9937 12450 13885 19738 19047 
Calabria 1418 1552 2095 1967 1884 2257 4462 8850 11704 13815 17434 17297 
South 1834 2011 2469 2615 2647 2960 5425 9659 12760 16453 18410 17503 
Sicily 1928 2160 2543 2885 2766 2796 4788 9301 12341 16129 17894 17426 
Sardinia 1598 2180 2744 2997 3183 3032 5882 11251 12942 17703 20660 20437 
Islands 1862 2169 2579 2910 2863 2844 5041 9765 12960 16523 18572 18172 
 
Center/North 2180 2502 3279 3937 4477 5920 9822 15138 21078 26913 31830 29987 
South 1842 2064 2505 2713 2720 2921 5294 9685 12832 16476 18464 17709 
 
Italy (Euro 2011) 2049 2327 2989 3506 3853 4813 8158 13268 18202 23141 27113 25740 
1871
1891
1911
1931
1938
1951
1961
1971
1981
1991
2001
2009
Piedmont 2116 2516 3446 4354 5348 7061 10768 16054 21278 26473 31125 27953 
Aosta Valley 7604 14472 17964 22771 28047 33593 33436 
Liguria 2844 3349 4597 5763 6469 7778 10678 15417 19858 26867 29499 27490 
Lombardy 2272 2681 3566 4319 5356 7369 11992 17752 23735 29111 35220 32355 
Northwest 2276 2692 3646 4529 5510 7335 11470 16969 22188 28070 33484 30656 
Trentino Alto Adige n.a. n.a. n.a. 3211 3664 5092 9495 13440 20441 27769 35084 33230 
Veneto 2071 1864 2579 2615 3236 4721 8565 13148 19640 26057 30665 29446 
Friuli Venezia Giulia n.a. n.a. n.a. 4424 4573 5362 7505 13307 19840 26867 30366 28880 
Emilia Romagna 1944 2460 3225 3832 4011 5381 9234 15125 23462 27862 33240 31068 
Northeast 2014 2127 2854 3292 3691 5082 8769 13931 21205 26982 32020 30347 
Tuscany 2151 2376 2911 3720 3888 5058 8663 13958 20040 24506 29526 28494 
Marche 1682 2043 2421 2496 3036 4125 7130 12060 19148 23673 26869 26177 
Umbria 2034 2362 2759 3499 3687 4336 6950 12299 17783 21683 25920 23990 
Lazio 2997 3644 4459 4901 4585 5145 9406 14170 18985 26751 30583 30399 
Center 2200 2585 3141 3884 3976 4900 8623 13692 19385 25224 29417 28751 
Abruzzo 1635 1573 2032 2223 2239 2796 5466 10986 15763 20526 22965 21158 
Molise 4960 9248 13524 16893 22504 20592 
Campania 2196 2253 2815 2854 3159 3331 5825 9447 12159 16291 17705 16679 
Puglia 1828 2367 2543 2987 2766 3128 5572 9964 13160 17101 18193 17091 
Basilicata 1371 1722 2194 2461 2185 2267 4797 9937 12450 13885 19738 19047 
Calabria 1418 1552 2095 1967 1884 2257 4462 8850 11704 13815 17434 17297 
South 1834 2011 2469 2615 2647 2960 5425 9659 12760 16453 18410 17503 
Sicily 1928 2160 2543 2885 2766 2796 4788 9301 12341 16129 17894 17426 
Sardinia 1598 2180 2744 2997 3183 3032 5882 11251 12942 17703 20660 20437 
Islands 1862 2169 2579 2910 2863 2844 5041 9765 12960 16523 18572 18172 
 
Center/North 2180 2502 3279 3937 4477 5920 9822 15138 21078 26913 31830 29987 
South 1842 2064 2505 2713 2720 2921 5294 9685 12832 16476 18464 17709 
 
Italy (Euro 2011) 2049 2327 2989 3506 3853 4813 8158 13268 18202 23141 27113 25740 

source See the text. All estimates are at historical boundaries and based on present populations. Aosta Valley was included in Piedmont until 1938; Molise was included in Abruzzi until 1951.

Author notes

Emanuele Felice is Visiting Professor of Economic History, Universitat Autònoma de Barcelona. He is the author of Perché il Sud è rimasto indietro (Bologna, 2013); Divari regionali e intervento pubblico: Per una rilettura dello sviluppo in Italia (Bologna, 2007).

Giovanni Vecchi is Associate Professor of Economics, Università di Roma, “Tor Vergata.” He is the author of In ricchezza e in povertà: Il benessere degli italiani dall’Unità a oggi (Bologna, 2011); with Andrea Brandolini, “Standards of Living,” in Gianni Toniolo (ed.), The Oxford Handbook of Italy and the World Economy since Unification (New York, 2013), 227–248.