This dissertation examines how different forms of state-led investment shaped firm behavior, industrial structure, and regional development in postwar Italy. It comprises three studies based on new data assembled from municipal censuses, administrative archives, newly digitized firm balance sheets, and a reconstructed national road network. The first paper evaluates the Cassa per il Mezzogiorno’s industrial and infrastructure funding streams. Using causal inference methods, it shows a clear divergence: Industrial support reliably boosted local industrial growth but slowed public infrastructure development, while infrastructure outcomes hinged on coordination across municipalities and on projects with clear, trackable outputs. The second paper examines firmlevel effects of the Cassa’s subsidized credit, drawing on a new 15-year panel of Southern Italian firms. It finds sustained gains in asset productivity—consistent with increased scale and efficiency—but also suggests that strict credit rules limited access for otherwise viable firms, weakening the program’s broader regional reach. The third paper studies the impact of highway construction on local economies. It finds that better connectivity reduced industrial specialization and strengthened integration within labour market areas. Using the reconstructed road network, it shows that highway access tied municipalities more tightly to stable economic regions, with local industrial structures adjusting accordingly. Taken together, the papers show how the design and implementation of public investment programs shape their distributive and developmental effects, offering insights for current industrial and regional policy.