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Diffusion of Modern Economic Growth in Italy and Europe - Research Paper Example

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The literature notes that the political unification of Italy, achieved by after the so-called “Expedition of the Thousand”, and after two other wars fought in the name of Italian independence, occurred in 1861. …
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Diffusion of Modern Economic Growth in Italy and Europe
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Political and Economic Unification in the 19th Century-Impact on the Diffusion of Modern Economic Growth in Italy and Europe Table of Contents Impact of Economic and Political Unification in the 19th Century on the Diffusion of Modern Economic Growth in Italy and Europe 3 Works Cited 7 Impact of Economic and Political Unification in the 19th Century on the Diffusion of Modern Economic Growth in Italy and Europe The literature notes that the political unification of Italy, achieved by after the so-called “Expedition of the Thousand”, and after two other wars fought in the name of Italian independence, occurred in 1861. It would take another war to annex Venice, and the end of the First World War for Italy to take into its fold the Trieste and Trento territories. The literature notes further, that while political integration was a sure thing, market forces and the varying economic fundamentals of the different Italian regions meant that actual economic integration took longer to accomplish, and the diffusion of economic growth among regions in Italy, and in other parts of the Europe, likewise took a long time to happen (Missiaia1-3). The literature notes that immediately after the unification, the level of actual economic integration in Europe was at a low level, especially in light of the fact that the Northern part of Italy was at a higher level of development compared to the Southern regions of the unified country. Meanwhile, in the period after the unification up until 1882, a process that was said to have started in 1832, well before the political unification, there was an observed trend towards the lowering of price differences of goods between North and South, a sign that in fact economic integration and diffusion was already happening during that immediate period before and after political unification. This in turn was traced to two things: one, the heightened economic integration between Northern Italy and the rest of Europe; and two, the parallel increased economic integration between Southern Italy and the rest of Europe, which allowed the southern part of the country to catch up with its Northern neighbor, and lower the economic disparity between the two Italian regions (Missiaia 2-4). The disparities in economic strength and size between North and South, and the subsequent diffusion of economic growth to and from the two regions and the surrounding areas of Europe are the big markers as far as the economic implications of the Italian unification are concerned. Some studies made use of proxy figures of trade, such as wheat prices and trade volumes, workforce educational attainment, cereals consumption, labor force distribution by sector, freight traffic, wages per region, and per capita industrial output, others. All pointed to the North being in a position to absorb a fairly rapid industrialization pace, even as the rest of the country lagged behind and was in an agricultural economic mode predominantly. This meant that the diffusion of economic growth, characterized by the leveling of prices and economic output between North and South, occurred at a slow pace, and with it, the integration of the Italian economy with the rest of industrializing Europe (Missiaia 2-33; Di Vaio 2-9). Taking a strep back though, from all of the data, and granted that economic unification was a process that took a long time to achieve, there is some consensus that that economic integration and the diffusion of economic growth from developed to less-developed regions of Italy and from neighboring European territories to Italy occurred as a result of political upheavals during the period, including the unification of Italy (Missiaia 2-33; Di Vaio 2-9; Acemoglu et al.). The link between Italy and the rest of Europe economically has been established in data cited above, indirectly, and through a number of parameters and variables. One study notes that an inference can be made of the tighter economic integration between the laggard eastern part of Italy and the rest of Europe owing to the convergence noted in the prices of goods, such as wheat, between North and South, in the absence of a tight integration between North and Southern Italy, or where, at the most, the literature notes that such integration is weak. If anything, data suggests that as the integration among the different regions were underway, a parallel tighter integration between Northern Italy and surrounding areas of Europe on the one hand, and another parallel process of tighter economic integration between Southern Italy and its neighboring European states on the other, was at play. Moreover, a prior economic process of increasing trade and the growth of a trading class that permeated through Europe and facilitated later growth, was already in play, extending way before the political unification of Europe, and affecting future economic growth for all (Alesina et al.; Missiaia; Acemoglu et al.; Di Vaio). Taking off from this assumption of tighter integration between much of its neighboring states, much of Western Europe in short, one can then trace the wider economic development of Europe to first the political unification of Italy and the parallel political upheavals in other parts of Western Europe, and the tighter integration of the Western European economies. This was the springboard from which sprang the economic growth and the diffusion of prosperity throughout the region all the way to the present. In developing Italy, for instance, there is an argument to be made that political integration likewise formed a large economic base out of which growth can be achieved. This in turn arguably served as a catalyst for larger growth in the economies of the surrounding states in Europe, and the resulting modern day economy is arguably founded on such political and economic beginnings in the 19th century, in Italy. That this is true is corroborated by literature correlating nation size to economic potential, and the number of nations to level of economic development and the extent of openness of the trade regimes under which countries operate. From a macroeconomic point of view, a unified Italy was also an Italy that was a single large market for goods and services, unimpeded by previous tariff regimes and uncoordinated use of resources when the united territories were previously independent, prior to unification. As discussed earlier, from here sprang the inevitable integration of the Italian economy, and the eventual integration of the economies of Europe, making possible the diffusion of growth in the involved economies through time, extending to the present (Alesina et al.; Missiaia; Acemoglu et al.; Di Vaio). Works Cited Acemoglu, Daron et al. “The Rise of Europe: Atlantic Trade, Institutional Change and Economic Growth”. MIT Department of Economics Working Paper No. 02-43; MIT Sloan Working Paper no. 4269-02. 25 November 2002. 5 April 2012. Alesina, Alberto et al. “Economic Integration and Political Disintegration”. Harvard University DASH Repository/ National Bureau of Economic Research. September 1997. 5 April 2012. Di Vaio, Gianfranco. “Economic Growth and Regional Disparities in Post-Unification Italy: New Preliminary Results for Industry”. Luis Lab of European Economics LLEE Working Document no. 56. December 2007. 5 April 2012. Missiaia, Anna. “Regional Market Integration in Italy During the Unification”. London School of Economics Department of Economic History/Working Papers No. 133/09. December 2009. 5 April 2012. Read More
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