form of ‘ development in reverse ’ 9 and cannot bring prosperity. m. schularick, speech at the ecb forum on central banking, sintra, 2 july 2024. research on the importance of social capital for economic development has been influenced by robert putnam's work on italy ( see r. d. putnam, making democracy work : civic traditions in modern italy, princeton, princeton university press, 1993 ). the fact that military spending is not, in and of itself, an instrument of economic development does not mean that it does not play a necessary role in national defence. j. m. keynes, ‘ from keynes to roosevelt : our recovery plan assayed ’, the new york times, 31 december 1933. see also g. b. eggertsson, ‘ great expectations and the end of the depression ’, american economic review, 98, 4, 2008, pp. 1476 - 1516. for example, the manhattan project, developed in the us during world war ii, led to the exploitation of nuclear energy. similarly, the defense advanced research projects agency ( darpa ) programme, set up in the 1950s, produced the internet. nasa ’ s moon landing in the 1960s resulted in aviation and satellite technology advancements, such as gps. but only military spending dedicated to research can generate long - term economic benefits ( see j. antolin - diaz and p. surico, ‘ the long - run effects of government spending ’, american economic review, forthcoming ). p. collier et al., breaking the conflict trap. civil war and development policy. a world bank policy research report, washington dc, world bank and oxford university press, 2003. figure 2 real income and inflation before and after world war ii ( indices : 1935 = 100 ) ( a ) real gdp per capita ( b ) consumer price index 6, 000 6, 000 4, 000 4, 000 2, 000 2, 000 italy france source : o. jorda, m. schularick and a. m. taylor, ‘ macrofinancial history and the new business cycle facts ’, in m. eichenbaum and j. a. parker ( eds. ), nber macroeconomics annual 2016, volume 31, 2017, pp. 213 - 263. 2. growth and integration as instruments of peace economic growth, prosperity and peace are instead closely linked. 10 to understand this connection, we must recognize that development in modern economies is based on

##ities. in the case of education, these principles need to be applied taking account of the sector ’ s specific features and complexity. an effective education policy must reconcile excellence with a fair distribution of the opportunities to go on learning up to the desired level. these two objectives are not in conflict, provided the public sphere seeks to create equal opportunities and chooses operational options that allow the market to play a part in selecting excellence. scholastic success depends significantly on the conditions of pupils ’ families. from this point of view italy appears to be socially almost immobile. the probability of earning a degree depends on the quality of the preceding education, but if this is sometimes inadequate, as in italy today, the family ’ s socio - economic background plays a major role. too little has changed in this respect since don milani raised the same question forty years ago, albeit in another context, in the light of his experience with the children of the school at barbiana. giving all young people the same opportunity to succeed in learning, provided they apply themselves, is the key to increasing efficiency and fairness in the field of education. both these objectives can be pursued in a variety of complementary ways. in primary and secondary education it may be worth increasing the competition between schools, both public and private, through methods of financing that both reward the best schools and transfer resources directly to families in order to give them more choice. the information that guides families in their choice of schools appears insufficient. in addition to the prospect of obtaining a diploma that has the same value for everybody, they should be offered uniform assessment criteria that permit informed choices. it is necessary to eliminate the perverse incentive for families and schools to collude in lowering teaching standards, especially if financing continues to depend exclusively on the number of students enrolled. the first steps towards developing a comprehensive assessment system that have already been incorporated in italian legislation deserve to be followed by others, not least so as to permit better informed guidance of public action to govern and reform the school system. somewhat similar considerations apply to universities, essential institutions for an economy that wishes to retain its place among the advanced countries. in recent years important changes have been made to the italian university system. for the first time an assessment has been made of the quality of research. notwithstanding all the measurement problems involved, this could shortly be used to guide the public financing of individual universities. it is important that the work done should not turn into a missed opportunity. transparency and public access to the assessment process help to improve the