Historical social contracts and their legacy: a disaggregated analysis of the medieval republics.

We study the comparative political economy within the territories ruled by the medieval republics in Northern Italy. Building on the historical evidence, we conceptualize the emergence of more inclusive vs. extractive institutions in these sovereign polities as driven by the interests of local rulers and their need to build state capacity. We provide novel insights on the role of geography and historical contingencies in the development of public governance, individual attitudes, and social-inclusion, which mutually supported each other and persisted over time. We measure the origin, territorial evolution, and disappearance of all the sovereign polities that ruled over the Italian peninsula during the period of 1000-1800 AD. The empirical analysis connects contemporary socio-economic outcomes across spatially disaggregated northern Italian localities, at the municipality level, to local political history. We distinguish between so-called "communal" and "maritime republics" and show that the intensity and stability of exposure to the different types of republican rule in pre-industrial times continues to shape local public good provision and individual fiscal compliance, and has left a tangible imprint on today's population diversity. [ABSTRACT FROM AUTHOR]