Daron Acemoğlu, Giuseppe De Feo, Giacomo De Luca, 02 March 2018

The Mafia is often cited as one of the main reasons why Sicily has lagged behind the rest of Italy in economic and social development. This column describes how in an environment with weak state presence, the socialist threat of Peasant Fasci organisations at the end of the 19th century induced landholders, estate managers, and local politicians in Sicily to turn to the Mafia to resist and combat peasant demands. Within a few decades, the presence of the Mafia appears to have significantly reduced literacy, increased infant mortality, limited the provision of a variety of local public goods, and may also have significantly reduced local political competition.

Pietro A. Bianchi, Antonio Marra, Donato Masciandaro, Nicola Pecchiari, 12 September 2017

Economic theory doesn’t provide a clear prediction on how a firm’s performance will be affected if some of its board members have ties to organised crime. This column explores this issue using a unique Italian dataset that includes confidential information about ongoing investigations. Seven percent of firms are found to have at least one director under investigation, and these firms demonstrate, on average, lower levels of cash holdings and worse profitability compared with ‘untainted’ firms.

Roberto Ganau, Andrés Rodríguez-Pose, 19 August 2017

Whether organised crime undermines productivity has been studied extensively in broad terms, but not at the firm level. This column uses extensive firm-level data from across Italy to suggest that this is firmly the case, both through direct and indirect channels. The results point to a substantial negative direct effect of organised crime on firms' productivity growth. Moreover, any positive impact derived from industrial clustering and agglomeration economies is thoroughly debilitated by a strong presence of organised criminality.

Giovanni Mastrobuoni, 20 May 2016

Education usually has a protective effect – people with higher levels of education are less likely to start criminal activities. In this video, Giovanni Mastrobuoni discusses the benefits of education on members of the Italian-American Mafia. Although the nature of the business is illegal, those involved in business-related crimes (loan sharking, drug dealing) are those who gain the most from an extra year in school. This video was recorded in March 2016 during the Royal Economic Society’s Annual Conference held at the University of Sussex.

Arcangelo Dimico, Ola Olsson, Alessia Isopi, 13 May 2012

If it were a business, the Mafia would be one of Italy’s most successful and one of the largest in Europe. But how did it come to be so powerful? This column argues that it began with control of the international lemon trade in the 19th century.

Guglielmo Barone, Gaia Narciso, 05 May 2012

Can organised crime divert public spending? This column presents evidence of the Mafia influencing public transfers and argues that geographically targeted aid should take into account the risk that at least part of the funding feeds into organised crime.

Giancarlo Corsetti, Saverio Simonelli, Antonio Acconcia, 04 April 2011

Few things divide the economics profession more than this question: How much economic activity does $1 of government spending generate? This column provides a new angle. Looking at local councils in Italy between 1990 and 1999, it examines variation in budgets due to the removal of funds by central government if mafia involvement is suspected. It finds that the fiscal multiplier starts at 1.4 and rises to 2.0.

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