A growing body of literature analyses the relationship between colonialism and long-term development, but largely overlooks the effect of colonial public investments on transportation infrastructure, schooling and sanitary facilities. In my research, I exploit the case study of Italian colonial investments in the Horn of Africa between 1934 and 1941, to unveil the relationship between such investments and present-day inequalities in terms of level of development and living standards and to explore the mechanisms that explain the persistence of colonial investments over time. I create three geo-referenced (a grid dataset and two individual) datasets by matching historical data on colonial investments, collected from both archival and printed primary sources, with micro-level open-source contemporary data for development and modern surveys for living standards to perform OLS and probit regression analysis. Firstly, I regress proxies for level of development, such as population density and light density at night, on dummies for being within 20km from colonial roads. Secondly, I regress measures of living standards, such as female literacy, BMI and children holding a sanitary card, on binary variables for living less than 10km away from a colonial schools and hospitals. Several robustness checks are performed to address the possible endogenous placement of colonial facilities including IV estimation, placebo treatment and nearest neighbour score matching. The data show a strong, positive and statistically significant relationship between proximity to colonial roads and economic development, on the one hand, and proximity to schooling, sanitary facilities and living standards, on the other. This demonstrates that areas endowed with more generous investments from the colonial period perform better in terms of economic development and living standards at present. The analysis also points out that the effect persisted mainly through phenomena of path-dependency and re-location.</p
