ABSTRACT
At the time of its political Unification in 1861, Italy was a poor and backward country with a per capita GDP of about $1,400-1,500 (1990 US dollars), less than half the British level, and slightly more than that of presentday India (Maddison 1995). Fifty years later, on the eve of World War I, Italy was still poor and backward, but it had undoubtedly started its modern economic growth, and could aspire to becoming one of the great European powers. Its GDP per capita was two-thirds higher, at some $2,400 (slightly less than that of Indonesia). On the other hand, Italy’s position relative to other advanced European countries had barely improved, unlike other peripheral European economies, notably the Scandinavian countries (O’Rourke and Williamson 1997). Its per capita GDP was still half that of Britain, and three-quarters that of France. This mixed record aroused many controversies among political observers at the time, and among historians subsequently (Zamagni 1993; Cohen and Federico forthcoming). Arguably the most controversial issue in the debate is the role of the state, especially with regard to trade policy. Like most European countries, Italy switched to protection in the late 1880s after a spell of free trade in the 1860s and 1870s. The first tariff approved in 1878 protected only a few industrial goods (mainly textiles) while the more protective and comprehensive 1887 tariff covered a fairly wide range of manufactures (notably iron and steel products) and, crucially, wheat. In the following years, individual duties were changed several times, sometimes as a result of trade treaties, but the basic framework of the 1887 tariff lasted until World War I.
