Geography, Institutions and Urban Development: Evidence from Italian Cities

Recent studies have highlighted the role of geography and institutions as key determinants of urban development. In this paper, we test this hypothesis by considering the case of Italian cities over a very long time period, i.e., from 1300 to 1861. Our measure of development is the urban population, and we relate it to geographical and institutional variables at both city and regional level. We find that the quality of institutions as measured by the experience of free city-state and the presence of a university has a positive effect on urban development, whereas we could not find a robust impact of the quality of regional government. However, we also find that cities located in mountain areas grew less than cities located in lowlands, possibly with access to the sea. We interpret these results as evidence of the importance of urban institutions and geography in shaping urban development