Enlightenment and the long-term persistence of the Habsburg administrative tradition

With G. Cainelli and R. Ganau

We study the persistent effects of the Enlightenment-inspired administrative reform implemented by the Habsburg Monarchy in 1755 to analyze current administrative efficiency differentials in public goods provision in Northern Italy. We exploit exogeneity in the frontier established in 1748 by the Treaty of Aix-la-Chapelle between the Habsburg-ruled Duchy of Milan and the neighboring territories ruled by the Savoy House. The Habsburgs extended to all land taxpayersthe right of electing local civil servants and deciding on taxation and public spending, while maintaining external monitoring and supervision through a state representative. By contrast, the municipalities ruled by the Savoy House were subject to a highly centralized system in which local civil servants were nominated by and under the control of the Intendant, who was appointed directly by the King. Using spatial regression discontinuity and employing an original dataset combining current and historical municipality-level data, we find a persistent positive effect of the Habsburg reform on current administrative efficiency in public goods provision. We interpret our results through a model of persistence of an administrative tradition driven by a within-institution “bureaucracy enculturation” mechanism.