Sovereignty, civic capital, and local development. A historical perspective in economic geography

Abstract We combine history with economic geography to shed light on the long-run determinants of territorial development differentials in Italy. Specifically, we study the effects of historical sovereignty change on current local economic development. We measure historical sovereignty change as the yearly number of changes of sovereignty that occurred in the period 1000–1861—that is, until the unification of Italy—and assess its effects on labor productivity in 2018. We estimate a negative effect of historical sovereignty change on current local economic development, and identify—both theoretically and empirically—civic capital as a plausible underlying mechanism.