Mauro Rota| Sapienza, Università di Roma- Memotef

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Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Mauro Rota| Sapienza, Università di Roma- Memotef SAPIENZA UNIVERSITÀ DI ROMA 25-26 NOVEMBRE 2016 CONVEGNO SCIENTIFICO LA SOCIETÀ ITALIANA E LE GRANDI CRISI ECONOMICHE 1929-2016

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Motivation- 1 • There is an open question about the origin in a distant past of and the persistence of cultural traits in a broad sense, whose effects may still influence the level of development after 150 of unification. • Moreover, there is lively debate about through which channels, if any, the cultural traits shape the economic behaviour (Ackcomak and ter Weel 2009; Spolaore Warciag 2013)

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Motivation- 2 We explore whether some cultural traits inherited from the past (values and beliefs that include, although not limited to, cooperative behaviour, trust, inclusiveness and formal education) influence the quality and efficiency of formal institutions today We look at the efficiency of judicial system as sign of different institutional efficiency across Italian provinces.

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Legal institutions-1 • We build an indirect measure of quality of institutions based on the efficiency of judicial courts to capture differences in institutional quality of the provinces of Italy: length of the judicial trials is a possible measure of quality of formal institutions as the European commission for the efficiency of justice (Cepej) suggests • Evidence: civil trials in different courts take different days to be concluded

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Legal institutions-2 The determinants of quality of legal institutions: Income per capita level Personnel in the courts (judges, administrative staff) Degree of infighting and cultural traits. Areas with higher quality of cultural traits have lower probability to go to the court.

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Legal institutions- 3 • increasing number of trials affect the workload of courts, but also because the actors involved, judges, lawyers, claimants, and external consultants often use legal formalisms and circumvent best practices to prolong trials for personal interests or simply laxity.

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions

Cultural Heritage: measurement issues 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Cultural Heritage: measurement issues The Società di Mutuo Soccorso were the first attempt to provide assistance among citizens on a voluntary basis They spread in the early years of Unification. The first complete census was made in 1873 by the MAIC We assume the number of Società di Mutuo Soccorso, the number of members relative to population and the gender composition as indirect measures of values of a community. Finally, we complement the concept of cultural traits with the illiteracy rate to take into account the beliefs of a community and to discount for future intergenerational transmission of those beliefs.

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Putting together the previous elements and using factor analysis we obtain a composite measure of cultural traits in the past. The pattern indicate that moving from North to South cultural traits worsen.

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Tab. 1 Length of civil trials in logs (controlling for departmental effects) VARIABLES (1) (2) (3) (4) inherited culture -0.125** -0.119** -0.111** -0.122** (0.0533) (0.0539) (0.0521) (0.0530) urb. Rate 1871 0.0779 0.112 0.0158 0.0464 (0.108) (0.106) (0.122) years of school 2006-07 0.0461 0.0703 0.0239 0.0478 (0.0748) (0.0777) (0.0758) (0.0752) income p/c 2006-07 -0.314 -0.434* -0.169 -0.308 (0.241) (0.246) (0.243) (0.236) Organised crime -0.0923 (0.0684) latitude -0.0475** (0.0237) av. Temperature 0.0110 (0.0120) Constant 6.360*** 6.500*** 8.251*** 6.202*** (0.727) (0.731) (1.296) (0.741) Observations 102 R-squared 0.755 0.759 0.765 0.758 Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions

Preliminary conclusions 25-26 NOVEMBRE 2016 | SAPIENZA UNIVERSITÀ DI ROMA Lo sviluppo economico italiano e le eredità istituzionali Culture and legal institutions Preliminary conclusions Cultural traits have proven to be a good predictor of different efficiency and quality of formal institutions today. Current and inherited measures of culture are puzzlingly correlated: Non linearities Error in measurement Do our model complements the possible and plausible channels of how history influences the current economic outcomes? Is maybe past culture a further channel than current civic capital?