Approaching Disaster: Personal Bankruptcy Legislation in Italy and England, c.1880–1939

Recent developments in economic literature emphasise the relation between the legal framework, financial intermediation, entrepreneurship and growth. Within such an approach, growing attention is paid to the role of bankruptcy laws and procedures. This article explores this issue, comparing the efficiency of personal bankruptcy regulation in Italy and England between c.1880 and 1939. Three elements characterised the English system during this period: wide usage of friendly yet public devices, deep involvement of the state in managing procedures, and the possibility of debt discharge. These three factors made English law relatively more efficient; proceedings were cheaper and faster, valuable entrepreneurs were supported, and fradulent ones were severely punished.