Abstract
Would you expect twins to reach different heights? The comparison is perhaps not so accurate, but inthe early 1950s Abruzzo and Sicily were economically very similar. Both were “full members” of theu n d e rdeveloped Mezzogiorno, with little industry, few natural re s o u rces, poor transport infrastru c t u re ,high agricultural employment and a low standard of living. Yet, while Abruzzo has managed asubstantial catch-up, Sicily has remained a lagging region. Consider regional GDP per capitac o m p a red to that in the North of Italy as the single most powerful indicator of this. From the early1950s to the mid-1990s, Abruzzo increased its relative position by almost 25 percentage points. Overthe same period, Sicily managed to climb up by only 2 percentage points relative to the nort h .This paper assesses the determinants of the diverging paths between these regions. It is organisedas follows. After having provided a broader overview of the development of the Mezzogiorno inthe next section, Section 3 focuses in more detail on the performances of Abruzzo and Sicily.Growth accounting exercises will show that the role of total factor productivity growth -technological change - had a much more important role in Abruzzo than it did in Sicily. At the sametime, Abruzzo had a much broader based development, including a range of manufacturingactivities and market services. Development in Sicily was much more specialised, and relied heavilyon investment in a few capital intensive industries. Section 4 discusses the implications of thesedifferent development strategies, and tries to identify the role of government policy in the process.Section 5 summarises and concludes.