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

In recent years, a good deal of scholarship on pre-industrial economies has been for -mulated by adopting or at least partially appropriating theoretical assumptions of the scholarly tradition founded by Douglass C. North and known as New Institutional Economics (NIE). From a neo-institutional perspective, the «rise of the West» and global inequalities tend to be explained through models distinguishing virtuous insti-tutional 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 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, 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, we argue that economic and political power asymmetries between different states can affect institutional configurations within individual states.