Corrupted behaviors and the use of political power for private gains by policy-makers are likely to generate an undue appropriation of wealth and an exacerbation of economic inequality. When the distribution of wealth is perceived as unfair, the demand for redistribution tends to become stronger. In this project, we dig into these issues and explore the connection among them. First, we will investigate how the exercise of political power stimulates opportunistic behaviors by politicians and will consider the economic consequences of such conduct. Second, we will study the evolution of wealth distribution in the long run and the dynamics of intergenerational mobility both in the past and in present. Third, we will examine how wealth inequality and unjust appropriation of resources generate a demand for redistribution. These research questions are particularly challenging to answer due to identification problems in the absence of experimental variation in the data. To deal with these issues, we will design identification strategies by employing newly constructed datasets and exploiting quasi-natural experiments. In the first part of the project, we will implement an analysis based on historical data and will reconstruct the evolution of wealth concentration in the Renaissance and early modern Florence, with a particular focus on the changes occurred at the top share of wealth distribution. This is an innovation in the literature made possible by the digitalization and combination of so far unexplored data sources. In the second part of the work, in order to study the individual demand for redistribution, we will exploit a natural experiment provided by the L'Aquila earthquake in 2009. Matching information on the intensity of the shakes registered by the National Strong Motion Network with survey data, we will be able to assess how the individual beliefs about the redistributive role of the State react to the perceived unfairness of market allocations.
The present project will innovate with respect to the existing literature on the following aspects.
In the first part of the project (politics, wealth inequality and intergenerational mobility) we will make an effort in collection and digitalization of historical data to built an original dataset. The first two sources are the Florentine Censuses of 1427 and 1457, fiscal assessments of the wealth of the Florentine citizens and the inhabitants of its subjected communities, realized by the administration of the city in the first decades of the 15th century.
The first document (1427) has been digitalized and available at the Brown University Web Archive. The second (1457) will be digitalized by the present research unit and merged with the previous one. The information contained in the first Census was decreed by the Priors of the Republic of Florence on May 1427. The new tax survey was made necessary by the fiscal crisis, which hit the city after a long period of wars with Milan. The survey was implemented by a team of ten officials (Ufficiali) and their staff and was deemed, at that time, the most rigorous attempt of a tax survey that the city of Florence had completed so far. Two revisions were also conducted, in 1428 and 1429. The document gives a comprehensive picture of the wealth owned by citizens of Florence at one point in time and will be complemented and augmented by data contained in the second Catasto of 1457. The final dataset will contain detailed information on the wealth status of the population living in Florence (and in the Contado) and several other individual characteristics such as: first name of the head of the family, name of the father of the head of the family, type of dwelling, ownership of animals, occupation, immigration/emigration status, sex and age of the head of the family, marital status, number of individuals in the household (including the head of the family), value of private investments, total assets, value of deductions, taxable assets. The survey includes more than 8,000 households. The estimated number of people leaving in Florence in the 15th century is 38,000.
We will also digitalize and work on a more recent source of information, the 1872 Census (Ministero delle Finanze - Direzione Generale delle Imposte Dirette, 1872). The tax census was requested in the 1871 by the Italian Ministry of Treasure Quintino Sella, it was compiled by Chief of the Ministry Staff, Giacomelli, and published in the year 1872. It reported the list, per province, of all the Italian taxpayers (private individuals, societies and public institutions) having, in the year 1872, an income at least equal to 1000 liras. Hence, the census contains information on the individual income of 23,477 subjects. We have accessed to the copy of the document conserved in the Biblioteca Passerini Landi of Piacenza (Fondo Antico). We will digitalise the data of the income of the taxpayers of the province of Florence, reporting the information regarding their names and surnames, category of imposable income (e.g. income from capital or labor) and amount of income in each category of each taxpayer. To the best of our knowledge, this digitalization work, which has involved a massive effort, has not been done by previous literature.
In the second part of the project (analysis of the roots of the demand for redistribution), we will offer both theoretical and methodological innovations to the existing literature. First, we plan to theoretically and empirically analyze how a stronger aspiration to live in a fair society can bias the individual demand for redistribution depending on one's position on the income ladder. Second, we aim to exploit a natural experiment provided by the L'Aquila earthquake in 2009, to empirically observe how the desire for fairness and the demand for redistribution react to the experience of bad luck. A natural disaster can be seen as a manifestation of random "bad luck", i.e. the misfortune of living in the wrong place at the wrong time, which demonstrates how exogenous events can frustrate the outcomes achieved with merit. We will assemble a novel dataset by matching the peak ground acceleration (PGA) recorded throughout the National Strong Motion Network during the L'Aquila earthquake with nationally representative survey data about individual opinions and beliefs that were collected 18 months after the shock. PGA is the largest peak acceleration recorded at a site during a seismic event. Unlike the Richter and moment magnitude scales, it is not a measure of the total energy of the earthquake, but rather of how hard the earth shakes on the surface at a given geographic point. It thus provides an objective indicator of the intensity with which residents perceive the shakes. Data on PGA are drawn from the strong motion database ITACA (ITalian ACcelerometric Archive), which relies on 1337 accelerometric stations installed in the most active seismic areas of Italy.