Pork, Infrastructure and Growth: Evidence from the Italian Railway Expansion,

Abstract

We study the political economy of transport infrastructure placement and its long-term impact, exploiting quasi-random variation in political factors. Using unique data from XIX-century Italy and deploying a regression discontinuity design, we focus on close races to show that towns in marginal districts supporting winning candidates were more likely to be reached by a railway. Using alignment with the government as a natural instrument for infrastructure placement, we then show that over the following century, services - rather than manufacturing - grew faster in connected municipalities. Our results also indicate that political allegiances likely helped towns with lower growth prospects.