Reforming Administration and Control to Restore Legitimacy: The Case of Monte di Pietà of Perugia, Italy (1462-1468)

This paper analyzes the legitimacy strategies of Monte di Pietà of Perugia – the first ever Italian Monte di Pietà - in its early years of activity (1462-1468). Monte di Pietà represent an innovative case of historical financial institutions, a result of the Franciscan preaching to fight against usury and to respect the Catholic ban on any kind of remuneration for loaned capital. But to ensure its survival, Monte needed to request interest, immediately introducing problems of legitimacy. So, the institution endeavored to design strategies to rebuild its legitimacy toward its immediate audience. Starting from Suchman’s (1995) approach to legitimacy restoring strategies, and through an archival and interpretive analysis, the aims of the paper are as follows: to provide a plausible interpretation of changes in the administrative system, to report how those innovations constituted actions to successfully restore legitimacy, and to illuminate interactions among pragmatic, moral, and cognitive strategies.