A dispute left over from Italian unification

When Italian troops took Rome in 1870, the city became the capital of a newly unified Italy and the pope lost control of the Papal States. The papacy rejected the takeover and refused to recognize Italy’s claim to Rome. For decades, popes lived inside the Vatican while insisting they were not free to act as ordinary rulers under the Italian government.

Italy tried to define the pope’s position through a law of its own, but the papacy did not accept that arrangement. The unresolved question was practical as well as symbolic: could the pope govern the Catholic Church independently if his home and authority depended on a state he considered illegitimate?

What Mussolini’s agreement changed

In 1929, Mussolini’s government and the Holy See—the central governing authority of the Catholic Church—settled the dispute in the Lateran Pacts. The treaty recognized Italy’s sovereignty over Rome, while Italy recognized Vatican City as an independent state under the pope. A financial settlement compensated the Holy See for the loss of the former Papal States, and the agreement also provided tax exemptions and other guarantees.

The arrangement gave the papacy territorial independence, but it was also a political bargain. The Holy See recognized the Italian state and agreed to stay out of ordinary Italian political affairs; Mussolini, in turn, gained the appearance of legitimacy from an institution that had long refused to accept Italy’s rule over Rome. The pacts also addressed the Church’s position in Italian public life, not just the borders of Vatican City.

A tiny state with a consequential purpose

Vatican City was not created to restore the old Papal States. Its small territory gave the pope a sovereign base from which to govern the Church without being legally subject to Italy. That is the lasting consequence of the deal: a decades-long sovereignty conflict ended not by returning Rome to the papacy, but by separating the pope’s independence from control of the city around him.