Giovanni Federico, University of Pisa
Antonio Tena, University Carlos III Madrid

From the Napoleonic Wars to World War Two, the European countries, with few exceptions in time and space, have taxed imports. The effects of this policy have been widely discussed by historians. Some authors argue that it was instrumental to industrialisation, others that it was detrimental to welfare, but all seems to agree on its relevance, with the important exception of F. Capie. The discussion has almost entirely relied on anecdotal evidence. There are very few if any estimates of the level of overall protection. This paper aims at measuring as precisely as possible the changes in the level of protection in Italy from the 1870s to the 1920s - i.e. during the first phase of the countryÕs industrialisation. The second section reviews the economic theory of measurement of nominal protection problems and suggests a new accounting method for analysing the changes in nominal protection. Section three outlines the main changes in Italian trade policy and presents the results according to several different measures ( trade weighted nominal protection, simple average of nominal duties, Trade Restrictiveness Index etc.). It shows that they are fairly consistent, and suggest a view of Italian trade policy quite different from the conventional wisdom. The level of protection has been quite low Ð with the possible exception of a short spell of time in the late 1880s-1890s Ð and most of the increase was accounted for by the very high duties on few commodities, notably sugar. The fourth section deals with the effects of protection. First it estimates the likely static welfare losses, showing they were very small (at most a 1% of GDP). Then it considers the possible dynamic effects on the allocation of resources by looking at the relative levels of protection in different activities. It shows that industry (save possibly steel) was less protected than wheat-growing or the production of sugar-beet. So, we argue that in the Italian case, the trade policy neither was very harmful to welfare nor it contributed to industrialisation. The last section of the paper discusses the implication of these findings for other countries. The available data place Italy in the middle of the ranking, not far away from similar large countries like France or Germany. This evidence is not conclusive, but it does cast some doubts on the relevance of protection in 19th century Europe.