Regional States and Economic Development

Introduction In recent historiography on the Italian regional states, a political-institutional perspective has taken centre stage, while markedly less space has been allotted by historians to economic change. Among the first to deal with the topic that interests us here was David Herlihy, who in the late 1960s began to reflect on the birth of a ‘Tuscan regional economy’ and to wonder to what degree the creation of the Florentine territorial state had conditioned the economic structure of Tuscany. Some fifteen years later, his insights were arranged more systematically in the thesis of Paolo Malanima, who held that Florence's demographic and economic-financial supremacy over the other cities of Tuscany maintained its military dominance, which in turn enabled its territorial expansion and the achievement of a regional state. The study of the formation and makeup of the ‘economic regions’ was soon extended to Lombardy and the Veneto and received a significant boost in the 1990s with Stephan R. Epstein's innovative research. Engaging in a constant critical dialogue with the positions of Douglass C. North and the English-speaking New Institutional Economics school, Epstein broadened the field of observation from north-central Italy to Aragonese Sicily and subsequently to a comparison between Italian and European states in a long-term perspective. The central core of Epstein's thesis, which approached the problem from many sides, is that economic growth in the pre-industrial age depended essentially on market integration; this process, in turn, was closely tied to the reinforcement of the sovereignty of the states and their increased capacity to reduce the obstacles to development represented by monopolies and rent-seeking positions, in particular by reducing transaction costs. © Cambridge University Press 2012.