The Persistence of Rural Underdevelopment: Evidence from Land Reform in Italy

Abstract

Patchiness in rural development remains a salient feature of many developed and developing countries that have struggled historically to overcome enormous national disparities in economic structure and well-being. This paper examines how one major, explicit rural policy ostensibly aimed at rural advancement – land reform – can impact uneven development in the countryside. It does so in Italy, where a major land reform redistributed large landholdings to individual peasant families after World War II. Based on original fine-grained data on land redistribution and a geographical regression discontinuity analysis that takes advantage of Italy’s zonal approach to land reform, I find that greater land reform fueled underdevelopment and precarity locally over the long term. Several related mechanisms delayed development in land reform zones: a slower transition out of agriculture, lower labor mobility, and an ageing demographic. These are generalizable mechanisms that could operate in other cases of land reform aside from Italy.