Hermes, the Leviathan, and the grand narrative of New Institutional Economics. The quest for development in the eighteenth-century Kingdom of Naples

Abstract

The scholarly tradition of New Institutional Economics has tended to explain the «rise of the West» and global inequalities through models distinguishing virtuous institutional paths, which grant property rights and the enforcement of contracts, to non-virtuous ones of which Mediterranean absolutist monarchies are considered to be paradigmatic examples. This essay retraces the emergence of this grand narrative, examining its Anglo-centric leanings and its use of the concept of «absolutism ». By reviewing historiographical studies dealing with the question of southern Italy's economic decline during the early modern age, and by investigating the reforms enacted during the eighteenth century in the Kingdom of Naples in order to create economically efficient institutions, it challenges dichotomous images opposing predatory absolutist states to development-enhancing institutional models dominated by merchants and entrepreneurs. Through an archive-based analysis of the reforms of the judicial and the customs system, it argues that economic and political power asymmetries amongst different states deeply affect the attempts at institutional reform within individual states.