Historical Traditions of Civicness and Local Economic Development*

The paper investigates the importance of history for local economic performance in Italy by studying the role of social capital, which refers to trust, reciprocity and habits of co-operation that are shared among members of a local community. The paper presents a test based on worker productivity, entrepreneurship, and female labor market participation. Using as instruments regional differences in civic involvement in the late 19th century and local systems of government in the middle ages, it shows that social capital does have economic effects.