Litterio Mirenda, Sauro Mocetti, Lucia Rizzica, 26 October 2019

The expansion of organised crime generates losses in economic growth and social welfare. This column estimates the impact of mafia penetration in the legal economy in Italy, looking both at the micro-level effects on firms infiltrated by 'ndrangheta members and at the more aggregate long-run effects on local economic growth. It finds that infiltrated firms are disproportionately in the utilities and financial services sectors and that infiltration has a strong negative effect on local long-term employment growth. 

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, 13 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.

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.

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