Cultural Persistence? Evidence from an Administrative Reform on Borders of Southern Italy
Abstract: We exploit an historical natural experiment set during Italy's Fascism to assess persistence vs. dynamics in social capital and culture. We do so in the paradigmatic critical area of Southern Italy, whose current economic backwardness is often associated to its low social capital endowment, a feature usually taken to be quite persistent locally and hence traced back to cultural and institutional heritage. In the experiment, an exogenous shift of a border in a territory entirely internal to that heritage provides us with an instrument to identify variation in culture and social capital levels in the 20th century in this doubly depressed region. A discontinuity exercise at the border shows that, starting from previous homogeneity, there is evidence of relatively recent adverse cultural dynamics in Southern territories. We emphasize the instructive potential of natural experiments of this kind for understanding mechanisms of social capital evolution, possibly guiding policy interventions aimed at fostering endowment in currently depressed regions.