Wealth Accumulation and Institutional Capture:

Wealth Accumulation and Institutional Capture:

the Rise of the Medici and the Fall of the Florentine Republic
Roberto Galbiati, Séminaire scientifique de l'OSC, 3 juillet 2020
  • Credit: The British Museum - Assset 1613683260 (CC BY-NC-SA 4.0)Credit: The British Museum - Assset 1613683260 (CC BY-NC-SA 4.0)

Séminaire scientifique de l'OSC 2019-2020

Vendredi 3 juillet 2020  de 11h30 à 13h
En visioconfrence (via Zoom. Inscrivez-vous pour recevoir le lien)

Wealth Accumulation and Institutional Capture:
the Rise of the Medici and the Fall of the Florentine Republic

Roberto Galbiati

Senior Researcher (Sciences Po - Department of Economics)

Mael Ginsburger (OSC)We study the rise of the Medici family and the fall of the Florentine Republic in the 15th century. In this period, political offices were assigned by a system which combined elections and selection by lot. During the 1420s, the Medici family increased its influence and de facto captured the system of office allocation while leaving the political institutions formally unchanged.
We use data on the results of the drawings for the four main government offices of the city between 1395 and 1457 and match them with data on individual wealth at diff erent points in time in the 15th century. Our analysis documents the systematic capture of the process of office allocation in favor of individuals belonging to the Medici's network.
When we move to the analysis of the relationship between wealth and political office holders, we show that after the Medici's institutional soft-capture, holding a political office is strongly and directly associated with individual wealth accumulation, especially for office holders from the Medici faction. By contrast, we find a very limited effect between the number of terms in office and individual wealth before the rise of the Medici to political power.
By comparing results for the two periods, before and after the institutional capture, and using complementary data sources, we provide several pieces of evidence that explain our findings in terms of collusion and rent extraction.

This research is conducted with Marianna Belloc, Francesco Drago and Mattia Fochesato.

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