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

See all articles by Nicola Bianchi

Nicola Bianchi

Northwestern University - Kellogg School of Management; National Bureau of Economic Research (NBER)

Michela Giorcelli

University of California - Los Angeles; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: November 26, 2021

Abstract

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

Bianchi, Nicola and Giorcelli, Michela, Reconstruction Aid, Public Infrastructure, and Economic Development: The Case of the Marshall Plan in Italy (November 26, 2021). Available at SSRN: https://ssrn.com/abstract=3153139 or http://dx.doi.org/10.2139/ssrn.3153139

Nicola Bianchi (Contact Author)

Northwestern University - Kellogg School of Management ( email )

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Michela Giorcelli

University of California - Los Angeles ( email )

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National Bureau of Economic Research (NBER) ( email )

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HOME PAGE: http://www.giorcellimichela.com

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