How Did Italy’s Medieval “Economic Boom” Begin?

One of the unanswered questions in medieval history concerns Italy’s economic success. How did cities such as Siena, Venice, Genoa, alongside Milan and Rome, manage to become, in the decades between the 12th and 13th centuries, some of the most dynamic economic hubs in the Latin West?

The new ERC project RaESETfides, led by Lorenzo Tabarrini, researcher at the Department of History and Cultures of the University of Bologna, seeks to provide an answer. Funded by the European Research Council with a Starting Grant worth over €1.2 million, the project will investigate the causes of the “economic boom” that transformed Italy in the early 1200s.

“Until the last third of the 12th century, the most advanced economy in the Mediterranean area was Egypt; more broadly, both the Arab world and the Greek-Byzantine world were richer and had more solid political-administrative structures than the Latin West,” Tabarrini explains. “Then, quite unexpectedly, increasingly strong signs of growth began to emerge among the central-northern Italian cities; from the early 13th century onwards, these centres became key points of reference for international trade.”

What triggered this abrupt transformation? To understand it, the research team will focus on the links between institutional development and changes in the rural economies of seven Italian cities—Genoa, Milan, Pisa, Rome, Siena, Venice, and Verona—and their surrounding countryside between 1100 and 1250.

“The maritime reach of cities such as Genoa, Pisa and Venice is well known, but this has overshadowed the study of the agrarian structures needed to supply their populations with food; likewise, we know little about the consolidation of Milan’s manufacturing sector, even though it was already at the time a city of remarkable size,” Tabarrini notes. “Then there are the cases of Siena, which preserves a rich collection of financial documents from its municipal administration, and Rome, where during this period a number of merchants and bankers, thanks to their role as papal creditors, were able to make major investments in the Agro Romano.”

Through close analysis of archival sources, combined with archaeological evidence, the researchers aim to identify the institutional and economic changes that fuelled such rapid development, with particular attention to financial strategies such as early forms of public deficit and currency-devaluation policies.

“We know that these decades saw increasing control over monetary policy: authorities intervened in the quality of coinage to reduce production costs while keeping its nominal value unchanged,” Tabarrini says. “Alongside this, we observe an increasingly complex and articulated organisation of city governments, a gradual reintroduction of direct taxation, and the first examples of public deficit: loans taken out in the name of the municipality, renewed ever more frequently, which enabled cities to sustain their economic expansion.”

The working hypothesis is that it was precisely these institutional changes that drove the major economic growth of central-northern Italy between the 12th and 13th centuries. To confirm this, and to uncover the underlying mechanisms and dynamics, the researchers will now turn to the archives for an extensive programme of study and document analysis.