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Centre for Finance and Development

Big Lender or Big Spender? The Role of the Cassa per il Mezzogiorno in the Development of Southern Italy

PhD Supervisor: Rui Esteves
Funding Organisation: Swiss National Science Foundation, Doc.CH scheme
Timeline: September 2021–February 2025
Budget: CHF 219,739
Keywords: development banking, economic history, financial architecture, modern Italian history, state finance


Since the 2009 financial crisis there has been an increasing debate about the role of governments in the economy. A strand in this discussion has focused on national development banks (NDBs), and whether their presence is beneficial to the growth of local economies. Nonetheless, even though these institutions have had a long presence in many nations during the 20th century, the impact of their programmes on development and economic growth remains largely understudied. Thus, while NDBs have been praised and criticised in equal measure, there has not yet been a systematic assessment of their impact and desirability in any national context. My dissertation focuses on one of the most famous cases of government intervention to address regional inequality: the “problem of the Mezzogiorno” in Italy.

In the aftermath of WWII, the government created the Cassa per il Mezzogiorno (CasMez or Cassa for short), a development bank with the remit of developing the South of the country through the funding of infrastructural projects and industrial firms. While CasMez was eventually liquidated in 1984 amidst accusations of corruption and gross misuse of public funds, it was nationally and internationally praised for its activity during the first 20 years of its existence. Despite this fact, and partly because the institution’s archives were closed until 2016, there has been no comprehensive assessment of its effect on Southern Italy’s development and, most importantly, of the reasons for its successes and failures.


My dissertation will address these gaps by exploring the wealth of microdata preserved in the recently opened CasMez archives, which contains quantitative information on the CasMez’s projects that will allow me to assess the institution’s impact in the regional economy. At the same time, I will contextualise my findings through an in-depth analysis of the historical sources and of the broader context in which CasMez operated. A particular source of interest here are the political and institutional shifts taking place throughout its history.


My contribution will be threefold: firstly, I will provide the first comprehensive historical account of the Cassa per il Mezzogiorno, which has been sorely lacking given that CasMez was by far the most prominent effort on the part of the Italian government to develop the South. Secondly, I will contribute to the current debate on government development strategies by providing the first systematic empirical assessment of a development bank’s effectiveness over a prolonged period of time through the case study of CasMez. Thirdly, I will compile a new dataset based on CasMez’s operations that will be accessible to future researchers.