Inherited culture, institutions and economic development in Italy∗ M. C. Bramati,y A. Palestini,z and M. Rotax Please do not quote this preliminary version Abstract This paper establishes a precise channel of long run effect of inherited cultural traits on current development. We use data on 102 provinces of Italy and we consider whether cultural traits from the past shape the today quality of formal institutions within country, proxied by the length of trials by province. Our results point to a strong effect of inherited cultural traits on the different quality of the today formal institutions whereby different levels of development are determined within country. Those effects are robust to the inclusion of accumulation of human capital, past economic development, geographical location, and current civic capital. Moreover, we found that the effects of inherited cultural traits might be additional and not necessarily alternative to past formal institutions in influencing current economic behaviour and outcomes. Jel classification: O10, F10, P10, N13 Keywords: inherited cultural traits, formal institutions, economic development, civil trials. ∗We acknowledge the Faculty of Economic, Sapienza University of Rome for financial support, (under-40 researchers funding program 2012). ySapienza, University of Rome, MEMOTEF Department, via del Castro Laurenziano, 9 000161 Rome zSapienza, University of Rome, MEMOTEF Department, via del Castro Laurenziano, 9 000161 Rome xSapienza, University of Rome, MEMOTEF Department, via del Castro Laurenziano, 9 000161 Rome, email:
[email protected] corresponding author 1 1 Introduction The cultural traits are often invoked as the determinants of different economic outcomes. Pref- erences, norms and beliefs are determined by those cultural traits which in turn are the results of events and institutional heritage from a very distant past (Bisin and Verdier 2001; Voigth- lander and Voth, 2012).