At the Root of the North-South Cooperation Gap in Italy: Preferences or Beliefs?

The sharp gap in development between the North and the South of Italy represents a paradigmatic case of persistent within-country disparities. The evidence suggests that this gap could depend on a difference in the ability to cooperate. We investigate experimentally three possible sources of this difference, and find that Northerners and Southerners share the same pro-social preferences, but differ both in their belief about cooperativeness and in the aversion to social risk, respectively, more pessimistic and stronger among Southerners; intervention or events that reduced pessimistic beliefs should directly boost cooperation.