Local Credit and Territorial Development: General Aspects and the Italian Experience

The purpose of this article is to explore the relationship that arose in Italy between local financial systems and local production systems in the period of the country’s post-war reconstruction, when it rejoined the trajectories of modern economic development. This will be done by verifying two hypotheses. The first is of a more general nature. It states that, in a given territory, the supply of credit, and the financial system supporting it, constitute only one local factor in development. They combine with numerous other factors, even ones uncorrelated with them, which may be present in varying proportions according to the coordinates of time and place, and which give rise to the set of opportunities for investment. The second hypothesis tested concerns Italy in particular. It states that certain public choices of the post-war period, functional to specific political strategies and to more generic strategies of medium-period growth, proved unable in the long period to sustain a modern equilibrium among factor endowments, socio-cultural components, and the political-administrative apparatus. The hypotheses will be verified by considering the main findings in the theoretical and empirical literature on the general aspects of the relationship between financial systems and territorial development, and by examining the odd relationship between credit and local firms in Italy.