The Effects of Italy’s Unification on Its Dual Development: A Synthetic Control Approach

Abstract There is a long-standing debate on the effect of Italian unification (1861) on the country’s dual development. We estimate the causal impact of unification on agricultural share, literacy and railway density for the South and the Centre-North by analyzing a newly assembled panel of countries/regions with the synthetic control method. Our findings suggest that over the 50 years following the birth of the unified state, neither area drew generalized benefits from unification. Consolidation delayed industrialization in both macro areas. However, the South benefited from a strong spread of rail infrastructure, while the Centre-North enjoyed a pronounced increase in literacy.