Although Southern Italy is subject to serious economic and political issues and indeed less economically developed than the north, I'd like to warn against the circklejerk which I sometimes see on Reddit that also bleeds over into to some preconceived notions in global media, and even academia ("Why doesn't Italy follow the German economic model?" asked a much more senior colleague of mine just a few months ago. "What," I replied, "Have a positive balance of trade for last decade like Italy's already done?"). At the end of the day, Southern Italy is a macroregion of an OECD member and a G8 economy; millions of people wake up in the morning and lead ordinary lives, going to work in towns and cities as anyone else in other country does.

But that being said, there are some serious economic issues in Southern Italy which predate Italian Unity. I discussed the specifics of the industrial revolution in Italy in this answer which you might be interested in. But the narrative of Italian Economic History could start earlier, with the end of the Roman Empire, whose end certainly halted growth in Southern Italy’s cities, dependent as they were upon pan-mediterranean grain trade. Italy’s center of population subsequently moved northwards to the broad plain of the River Po, where the flat and fertile hinterland could more easily support urban populations. But while it's something to think about, that fact doesn't tell the whole story: certainly, Northern Italy’s history characterized by trade between independent urban centers was also facilitated by a well-developed economic institutions which took their final form in and around the time of Renaissance, while the southern monarchy had never created the necessary conditions for a comparatively elaborate economy to develop. The emergence of large and developed nation states just over the Alps (or just down the coast) which would become world powers in the Early Modern Era also meant Northern Italian cities were more easily integrated into the growing European Macro-Economy. Although all of Italy would be less economically vibrant than atlantic-facing Europe, nowhere was this more evident than in the south.

I wrote about the institutional drivers of Italian dualism here in an admittedly very long answer. What is important is that the differences between north and south at unification were very clear: although 37% of northern Italians were living below the poverty line, 50% of the population was living in poverty in the south. Indeed, in 1861, 90% of southern Italians were illiterate, while only 20% of children were able or willing to enroll in primary education. This stands in stark contrast with Piedmont and Liguria, where in 1861 literacy stood at 53%, and 93% children were enrolled in primary education. Indeed, public education was significant rendering the male literacy rate in Piedmont specifically the highest in Italy, increasing from 56% to 70% between 1821 and 1861.

By 1861, there were 3.2 times more kilometers of roadway present in northern Italy than in the south. By 1865, only 21 of the 88 insurance companies operating in Italy were based in the south. That same year, of the 208 industrial corporations in existence, only 17 were registered in the south. As a testament to the greater consumption of both raw materials and finished goods, the total number of imports in northern Italy amounted to 3.6 times the total number of imports in the south. Exports were small in all pre-unification Italian states; a testament to their overall lack of industrialization. However, there were some activities of note: The Kingdom of Piedmont exported Ligurian sea salt to landlocked countries like Switzerland and the German states, a significant force behind the desire to construct rail and road connections northwards. Silk production, revealed to be one of Italy’s few internationally competitive sectors, accounted for 40% of the Kingdom of Sardinia- Piedmont’s total shipments abroad and became a major driver of Italian industrialization. The Kingdom of the Two Sicilies subsidized the exportation of olive oil to Great Britain, and also shipped a number of cash crops like grapes abroad. On the Island of Sicily, the exportation of sulfur accounted for 50% of exports. However, by 1861 northern exports were 2.7 times more numerous than those in the south.

Both states were predominantly agricultural economies, but the total value of agricultural production in Piedmont in 1857 stood at 516 million lira, or 169 lira per hectare. In the Kingdom of the Two Sicilies, the total value of agriculture in the same year was 870 million lira, the equivalent of 81 lira per hectare.

But stagnation was not inevitable in the south; intellectual life in pre-restoration Naples was just as florid as in Milan. Industrialization, although difficult, could very well have been possible: reducing the rights of the nobility, comprehensive education policy, the construction of railroads to unite urban centers, and banking reform were all possible reforms that were never implemented. We will never know what their effect on the southern Italian economy would have been. What is certain is that the inability or unwillingness to interpret economic development as a means to stability in favor of placation through repression had the inevitable effect of delaying development.

This is in stark contrast to public sector in the north, which was more willing to experiment and hire forward-thinking administrators. Although this, like the inefficacy of the Neapolitan government, is a consequence of history: the north was long characterized by small competitive states with institutions guarding internal stability. Trusting results-oriented government with the best man for the job was not just a good practice, it was vital for survival. The practice even continued after Lombardy came under foreign rule, as foreign powers had every interest in keeping things running smoothly and lucratively.

Following the repression of the post-Napoleonic restoration, intellectuals from all over Italy migrated to the Kingdom of Piedmont-Sardinia. Although initially repressive, the government in Turin soon cautiously acknowledged their value. One of the more marginal states in Italian history, the Piedmontese already had a precedent for acknowledging and adopting the practices of their neighbors; welcoming prominent exiles wasn’t too far of a stretch. These intellectuals would not only supply the Turinese government with a full roster of capable public administrators, but influence public discourse and entice the small state to take action bringing about the unification of Italy.