The Risorgimento and the southern question : a financial history

Abstract

This thesis aims to bring back financial history into two of the main topics in Italian historiography, namely the Risorgimento and the Southern Question, by comparing the financial evolution of the Kingdom of Sardinia and the Two Sicilies and reassessing the financial impact of national unification in the South. It shows in particular how politics – in terms of foreign and domestic policy and power relations between regional economic elites – shaped financial markets and how different financial institutions, in turn, supported more or less effectively government policies. It also makes clear that, prior to unification, there was properly speaking neither a financial ‘North’ nor a financial ‘South’ due to extreme market fragmentation. Despite its larger resources, the Kingdom of the Two Sicilies proved conspicuously unable to leverage them to promote widespread credit development, thus breaking free of a ‘Neapolitano-centric’ perspective. By constrast, Piedmont’s wager on nationalism and economic development soon proved successful. Initially forced by an impending sovereign debt crisis after the First War of Independence to rely heavily on foreign and domestic banking, the Piedmontese government under Cavour turned financial policies into a powerful tool to support an ambitious foreign policy and promote political and financial rapprochement between the Turinese and Genoese business elites. The annexation of the South in 1860 resulted in a surge of public debt, while it took decades to re-establish an orderly monetary system. From the point of view of credit conditions, however, national unification was a remarkable success in the South, despite – or better because of – the fierce competition between regional banks of issue. Yet the entanglement between finance and politics ultimately delayed the establishment of a sound monetary and banking system nationwide and impinged on regional credit development.