IDEAS home Printed from https://ideas.repec.org/a/eee/poleco/v55y2018icp573-590.html
   My bibliography  Save this article

When the mafia comes to town

Author

Listed:
  • Scognamiglio, Annalisa

Abstract

This paper investigates the diffusion of organized crime in new areas by examining a legal practice in effect in Italy between 1956 and 1988, namely the power for the authorities to force mafiosi to relocate to another town. Using the variation in the number of relocated mafia members according to destination provinces in a difference-in-differences setting, I find no conclusive evidence on crime and a very robust positive impact on employment in the construction industry. I show that the effect is driven primarily by provinces that had a low ex-ante level of financial development, suggesting that mafias take advantage of investment opportunities in the construction sector that are left unexploited due to liquidity constraints.

Suggested Citation

  • Scognamiglio, Annalisa, 2018. "When the mafia comes to town," European Journal of Political Economy, Elsevier, vol. 55(C), pages 573-590.
    • Handle: RePEc:eee:poleco:v:55:y:2018:i:c:p:573-590
    DOI: 10.1016/j.ejpoleco.2018.05.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0176268017303774
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejpoleco.2018.05.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Nicola Daniele Coniglio & Giuseppe Celi & Cosimo Scagliusi, 2010. "Organized Crime, Migration and Human Capital Formation: Evidence from the South of Italy," SERIES 0028, Dipartimento di Economia e Finanza - Università degli Studi di Bari "Aldo Moro", revised Mar 2010.
    2. Giuseppe De Feo & Giacomo Davide De Luca, 2017. "Mafia in the Ballot Box," American Economic Journal: Economic Policy, American Economic Association, vol. 9(3), pages 134-167, August.
    3. Oriana Bandiera, 2003. "Land Reform, the Market for Protection, and the Origins of the Sicilian Mafia: Theory and Evidence," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 19(1), pages 218-244, April.
    4. Andrea Ichino & Giovanni Maggi, 2000. "Work Environment and Individual Background: Explaining Regional Shirking Differentials in a Large Italian Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(3), pages 1057-1090.
    5. Luigi Guiso & Paola Sapienza & Luigi Zingales, 2004. "The Role of Social Capital in Financial Development," American Economic Review, American Economic Association, vol. 94(3), pages 526-556, June.
    6. Benjamin A. Olken & Patrick Barron, 2009. "The Simple Economics of Extortion: Evidence from Trucking in Aceh," Journal of Political Economy, University of Chicago Press, vol. 117(3), pages 417-452, June.
    7. Paolo Buonanno & Francesco Drago & Roberto Galbiati & Pietro Vertova, 2018. "How much should we trust crime statistics? A comparison between EU and US," European Journal of Law and Economics, Springer, vol. 46(3), pages 343-357, December.
    8. Stergios Skaperdas, 2001. "The political economy of organized crime: providing protection when the state does not," Economics of Governance, Springer, vol. 2(3), pages 173-202, November.
    9. Alberto Alesina & Salvatore Piccolo & Paolo Pinotti, 2019. "Organized Crime, Violence, and Politics," Review of Economic Studies, Oxford University Press, vol. 86(2), pages 457-499.
    10. Marianne Bertrand & Simeon Djankov & Rema Hanna & Sendhil Mullainathan, 2007. "Obtaining a Driver's License in India: An Experimental Approach to Studying Corruption," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(4), pages 1639-1676.
    11. Emilia Bonaccorsi di Patti, 2009. "Weak institutions and credit availability: the impact of crime on bank loans," Questioni di Economia e Finanza (Occasional Papers) 52, Bank of Italy, Economic Research and International Relations Area.
    12. Guglielmo Barone & Gaia Narciso, 2013. "The effect of organized crime on public funds," Temi di discussione (Economic working papers) 916, Bank of Italy, Economic Research and International Relations Area.
    13. Gianmarco Daniele & Benny Geys, 2015. "Organised Crime, Institutions and Political Quality: Empirical Evidence from Italian Municipalities," Economic Journal, Royal Economic Society, vol. 125(586), pages 233-255, August.
    14. Guglielmo Barone & Gaia Narciso, 2011. "The effect of mafia on public transfers," Trinity Economics Papers tep2111, Trinity College Dublin, Department of Economics.
    15. Daniele, Vittorio & Marani, Ugo, 2011. "Organized crime, the quality of local institutions and FDI in Italy: A panel data analysis," European Journal of Political Economy, Elsevier, vol. 27(1), pages 132-142, March.
    16. Rogers, Douglas B. & Smith, Adam C. & Wilson, Bart J., 2013. "Violence, access, and competition in the market for protection," European Journal of Political Economy, Elsevier, vol. 29(C), pages 1-17.
    17. Buonanno, Paolo & Prarolo, Giovanni & Vanin, Paolo, 2016. "Organized crime and electoral outcomes. Evidence from Sicily at the turn of the XXI century," European Journal of Political Economy, Elsevier, vol. 41(C), pages 61-74.
    18. Paolo Pinotti, 2015. "The Economic Costs of Organised Crime: Evidence from Southern Italy," Economic Journal, Royal Economic Society, vol. 125(586), pages 203-232, August.
    19. Buonanno, Paolo & Pazzona, Matteo, 2014. "Migrating mafias," Regional Science and Urban Economics, Elsevier, vol. 44(C), pages 75-81.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Francesca Maria Calamunci & Federico Fabio Frattini, 2023. "When Crime Tears Communities Apart: Social Capital and Organised Crime," Working Papers 2023.08, Fondazione Eni Enrico Mattei.
    2. Mustafa Caglayan & Alessandro Flamini & Babak Jahanshahi, 2017. "Organized Crime and Technology," DEM Working Papers Series 136, University of Pavia, Department of Economics and Management.
    3. Litterio Mirenda & Sauro Mocetti & Lucia Rizzica, 2019. "The real effects of 'ndrangheta: firm-level evidence," Temi di discussione (Economic working papers) 1235, Bank of Italy, Economic Research and International Relations Area.
    4. Pierfrancesco Rolla & Patricia Justino, 2022. "The social consequences of organized crime in Italy," WIDER Working Paper Series wp-2022-106, World Institute for Development Economic Research (UNU-WIDER).
    5. Tomas Williams & Pablo Slutzky & Mauricio Villamizar-Villegas, 2019. "Drug Money and Bank Lending: The Unintended Consequences of Anti-Money Laundering Policies," Working Papers 2019-5, The George Washington University, Institute for International Economic Policy, revised May 2020.
    6. Lavinia Piemontese, 2020. "Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering," Working Papers 2025, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    7. Fortuna Casoria & Marianna Marino & Pierpaolo Parrotta & Davide Sala, 2019. "Local Government and Innovation: the case of Italian provinces," Working Papers halshs-02278092, HAL.
    8. Caglayan, Mustafa & Flamini, Alessandro & Jahanshahi, Babak, 2021. "Hindering human capital accumulation: A hidden cost of the silent mafia?," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 828-845.
    9. Rosario Crinò & Giovanni Immordino & Salvatore Piccolo, 2018. "Fighting Mobile Crime," DISCE - Working Papers del Dipartimento di Economia e Finanza def071, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    10. Silvia Fedeli & Vitantonio Mariella & Marco Onofri, 2018. "Determinants of Joblessness During the Economic Crisis: Impact of Criminality in the Italian Labour Market," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(2), pages 559-588, September.
    11. Beqiraj, Elton & Fedeli, Silvia & Giuriato, Luisa, 2020. "Policy tolerance of economic crime? An empirical analysis of the effect of counterfeiting on Italian trade," European Journal of Political Economy, Elsevier, vol. 65(C).
    12. Marco Di Cataldo & Nicola Mastrorocco, 2022. "Organized Crime, Captured Politicians, and the Allocation of Public Resources [“Mafiaand Public Spending: Evidence on the Fiscal Multiplier from a Quasi-Experiment]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 38(3), pages 774-839.
    13. Francesca M. Calamunci & Livio Ferrante & Rossana Scebba, 2022. "Closed for mafia: Evidence from the removal of mafia firms on commercial property values," Journal of Regional Science, Wiley Blackwell, vol. 62(5), pages 1487-1511, November.
    14. Rosario Crinó & Giovanni Immordino & Salvatore Piccolo, 2021. "Criminal mobility, fugitives, and extradition rules," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(1), pages 69-104, February.
    15. Lavinia Piemontese, 2021. "Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering," Working Papers halshs-02928546, HAL.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marco Le Moglie & Giuseppe Sorrenti, 2017. "Revealing “Mafia Inc.”? Financial crisis, organized crime, and the birth of new enterprises," ECON - Working Papers 251, Department of Economics - University of Zurich, revised Dec 2019.
    2. Daron Acemoglu & Giuseppe De Feo & Giacomo Davide De Luca, 2020. "Weak States: Causes and Consequences of the Sicilian Mafia," Review of Economic Studies, Oxford University Press, vol. 87(2), pages 537-581.
    3. Nicola Mastrorocco, 2018. "Organised Crime, Captured Politicians and the Allocation of Public Resources," Trinity Economics Papers tep1018, Trinity College Dublin, Department of Economics.
    4. Caglayan, Mustafa & Flamini, Alessandro & Jahanshahi, Babak, 2021. "Hindering human capital accumulation: A hidden cost of the silent mafia?," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 828-845.
    5. Francesca M. Calamunci & Livio Ferrante & Rossana Scebba, 2022. "Closed for mafia: Evidence from the removal of mafia firms on commercial property values," Journal of Regional Science, Wiley Blackwell, vol. 62(5), pages 1487-1511, November.
    6. Marco Le Moglie & Giuseppe Sorrenti, 2022. "Revealing "Mafia Inc."? Financial Crisis, Organized Crime, and the Birth of New Enterprises," The Review of Economics and Statistics, MIT Press, vol. 104(1), pages 142-156, March.
    7. Mustafa Caglayan & Alessandro Flamini & Babak Jahanshahi, 2017. "Organized Crime and Technology," DEM Working Papers Series 136, University of Pavia, Department of Economics and Management.
    8. Paolo Buonanno & Irene Ferrari & Alessandro Saia, 2023. "ALL IS NOT LOST: Organized Crime and Social Capital Formation," Working Papers 2023: 16, Department of Economics, University of Venice "Ca' Foscari", revised 2024.
    9. Marco Di Cataldo & Nicola Mastrorocco, 2022. "Organized Crime, Captured Politicians, and the Allocation of Public Resources [“Mafiaand Public Spending: Evidence on the Fiscal Multiplier from a Quasi-Experiment]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 38(3), pages 774-839.
    10. Cavalieri, Marina & Finocchiaro Castro, Massimo & Guccio, Calogero, 2023. "Organised crime and educational outcomes in Southern Italy: An empirical investigation," Socio-Economic Planning Sciences, Elsevier, vol. 89(C).
    11. Marina Cavalieri & Massimo Finocchiaro Castro & Calogero Guccio, 2020. "Does the Fish Rot from the Head? Organised Crime and Educational Outcomes in Southern Italy," Working papers 97, Società Italiana di Economia Pubblica.
    12. Baraldi, Anna Laura & Immordino, Giovanni & Stimolo, Marco, 2022. "Self-selecting candidates or compelling voters: How organized crime affects political selection," European Journal of Political Economy, Elsevier, vol. 71(C).
    13. Livio Ferrante & Stefania Fontana & Francesco Reito, 2021. "Mafia and bricks: unfair competition in local markets and policy interventions," Small Business Economics, Springer, vol. 56(4), pages 1461-1484, April.
    14. Filippo Boeri & Marco Di Cataldo & Elisabetta Pietrostefani, 2022. "Localised Effects of Re-allocated Real Estate Mafia Assets," Working Papers 2022:10, Department of Economics, University of Venice "Ca' Foscari".
    15. Giovanni Bernardo & Irene Brunetti & Mehmet Pinar & Thanasis Stengos, 2021. "Measuring the presence of organized crime across Italian provinces: a sensitivity analysis," European Journal of Law and Economics, Springer, vol. 51(1), pages 31-95, February.
    16. Francesca Maria Calamunci & Federico Fabio Frattini, 2023. "When Crime Tears Communities Apart: Social Capital and Organised Crime," Working Papers 2023.08, Fondazione Eni Enrico Mattei.
    17. Daniele, Gianmarco & Dipoppa, Gemma, 2017. "Mafia, elections and violence against politicians," Journal of Public Economics, Elsevier, vol. 154(C), pages 10-33.
    18. Marco Dugato & Francesco Calderoni & Gian Maria Campedelli, 2020. "Measuring Organised Crime Presence at the Municipal Level," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 147(1), pages 237-261, January.
    19. Daniele, Gianmarco, 2019. "Strike one to educate one hundred: Organized crime, political selection and politicians’ ability," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 650-662.
    20. Ylenia Brilli & Marco Tonello, 2015. "The contemporaneous effect of education on adolescent crime. Mechanisms and evidence from regional divides," CHILD Working Papers Series 41 JEL Classification: I2, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.

    More about this item

    Keywords

    Organized crime; Law making; Shadow economy;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:poleco:v:55:y:2018:i:c:p:573-590. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505544 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.