Administrative reforms, urban hierarchy, and local population growth. Lessons from Italian unification

We analyze the local-level demographic effects of the 1865 Italian “Lanza administrative reform†. This reform established the skeleton and functioning of the entire public administration in the Kingdom of Italy, unified in 1861, by re-assigning administrative functions to municipalities throughout the country. We focus on municipality-level population dynamics over the period 1861-2011, while also providing evidence of more recent local-level economic performance. We rely on ‘generalized’ difference-in-differences and matching techniques, and find that municipalities that emerged from the reform with new or increased administrative functions at supra-municipal level gained a population growth premium, persistent over time. Moreover, local labor market productivity increased during the early 2000s.