Reconstruction Aid, Public Infrastructure, and Economic Development: The Case of the Marshall Plan in Italy
87 Pages Posted: 17 Apr 2018 Last revised: 29 Nov 2021
Date Written: November 26, 2021
The Marshall Plan (1948–1952) was the largest aid transfer in history. This paper estimates its effects on Italy's postwar economic development. It exploits differences between Italian provinces in the value of reconstruction grants they received. Provinces that could modernize more their infrastructure experienced higher increases in agricultural production, especially for perishable crops. In the same provinces, we observe larger investments in labor-saving machines, the entry of more firms into the industrial sector, and a larger expansion of the industrial and service workforce.
Keywords: international aid, economic growth, reconstruction grants, Marshall Plan, innovation
JEL Classification: H84, N34, N44, O12, O33
Suggested Citation: Suggested Citation