Railways and manufacturing productivity in Italy after Unification

This paper contributes to the debate on the effects of transport infrastructure endowment on productivity by adding a historical perspective. This allows us to address the issue in a proving ground where the effects of the existing stock of infrastructure are negligible. At the time of unification in 1861, the Kingdom of Italy initiated a large infrastructure project to build railways all over the country. We find that railways had a positive effect on manufacturing productivity across the country over the period 1871-1911, without a differential effect on the North/South divide. Railways also had strong spillover effects in neighboring provinces so that provinces that started with a higher endowment of railways benefited more than those who were newly endowed. Roads also had a positive effect, but less than railways.