Monetary innovation in XVIth century Naples: a new causal link between religion, culture and institutions in the history of financial development Part 2 of 3

This paper is part of a longer study about the complex relationships between, on the one hand, economic or financial development and, on the other hand, religion, culture and institutions. The first part of the study exposed one of the most influential accounts of the causal relationships between institutions and financial and economic development. This paper goes further by exploring the nexus between institutions, culture and religion, and how these factors are supposed to interact causally with (particularly) financial development. The paper reviews the literature and points out the numerous shortcomings of these purported causal pathways, before exploring with great detail one significant but overlooked case of historical financial development, i.e. the emergence and operation of the Neapolitan public banks in XVth and XVIth century Naples, showing how such case sheds a very different light upon the causal importance of institutions, culture and religion for development.