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Poor Institutions, Rich Mines: Resource Curse and the Origins of the Sicilian Mafia

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  • P. Buonanno
  • R. Durante
  • G. Prarolo
  • P. Vanin

Abstract

This study explains the emergence of the Sicilian mafia in the XIX century as the product of the interaction between natural resource abundance and weak institutions. We advance the hypothesis that the mafia emerged after the collapse of the Bourbon Kingdom in a context characterized by a severe lack of state property-right enforcement in response to the rising demand for the protection of sulfur - Sicily's most valuable export commodity - whose demand in the international markets was soaring at the time. We test this hypothesis combining data on the early presence of the mafia and on the distribution of sulfur reserves across Sicilian municipalities and find evidence of a positive and significant effect of sulphur availability on mafia's diffusion. These results remain unchanged when including department fixed-effects and various geographical and historical controls, when controlling for spatial correlation, and when comparing pairs of neighboring municipalities with and without sulfur.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp844.

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Date of creation: Sep 2012
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Handle: RePEc:bol:bodewp:wp844

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  1. Arcangelo Dimico & Alessia Isopi & Ola Olsson, . "Origins of the Sicilian Mafia: The Market for Lemons," Discussion Papers 12/01, University of Nottingham, CREDIT.
  2. Paolo Buonanno & Giacomo Pasini & Paolo Vanin, 2008. "Crime and Social Sanction," "Marco Fanno" Working Papers 0071, Dipartimento di Scienze Economiche "Marco Fanno".
  3. Oriana Bandiera, 2003. "Land Reform, the Market for Protection, and the Origins of the Sicilian Mafia: Theory and Evidence," Journal of Law, Economics and Organization, Oxford University Press, vol. 19(1), pages 218-244, April.
  4. Daron Acemoglu & Simon Johnson & James A. Robinson, 2000. "The Colonial Origins of Comparative Development: An Empirical Investigation," NBER Working Papers 7771, National Bureau of Economic Research, Inc.
  5. Stelios Michalopoulos, 2011. "The Origins of Technolinguistic Diversity," Economics Working Papers 0095, Institute for Advanced Study, School of Social Science.
  6. Michalopoulos, Stelios & Naghavi, Alireza & Prarolo, Giovanni, 2010. "Trade and Geography in the Economic Origins of Islam: Theory and Evidence," MPRA Paper 23136, University Library of Munich, Germany.
  7. Edward L. Glaeser & Bruce Sacerdote, 1996. "Why is There More Crime in Cities?," Harvard Institute of Economic Research Working Papers 1746, Harvard - Institute of Economic Research.
  8. Ruben Durante, 2010. "Risk, Cooperation and the Economic origins of social Trust: an empirical Investigation," Sciences Po publications info:hdl:2441/eu4vqp9ompq, Sciences Po.
  9. Halvor Mehlum & Karl Ove Moene & Ragnar Torvik, 2005. "Cursed by resources or institutions?," Working Paper Series 5705, Department of Economics, Norwegian University of Science and Technology.
  10. Anderson, James E. & Bandiera, Oriana, 2005. "Private enforcement and social efficiency," Journal of Development Economics, Elsevier, vol. 77(2), pages 341-366, August.
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  14. G�ran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
  15. Varese, Federico, 2005. "The Russian Mafia: Private Protection in a New Market Economy," OUP Catalogue, Oxford University Press, number 9780199279494.
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Cited by:
  1. Giuseppe De Feo & Giacomo De Luca, 2013. "Mafia in the ballot box," DEM Working Papers Series 057, University of Pavia, Department of Economics and Management.
  2. Guglielmo Barone & Gaia Narciso, 2012. "The Effect Of Mafia On Public Transfers," The Institute for International Integration Studies Discussion Paper Series iiisdp398, IIIS.
  3. 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.
  4. Kyriakos C. Neanidis & Maria Paola Rana, 2014. "Entrepreneurs, Risk Aversion and Dynamic Firms," Centre for Growth and Business Cycle Research Discussion Paper Series 190, Economics, The Univeristy of Manchester.
  5. Meier, Stephan & Pierce, Lamar & Vaccaro, Antonino, 2014. "Trust and In-Group Favoritism in a Culture of Crime," IZA Discussion Papers 8169, Institute for the Study of Labor (IZA).
  6. Mathieu Couttenier & Pauline Grosjean & Marc Sangnier, 2014. "The Wild West is Wild: The Homicide Resource Curse," Discussion Papers 2014-12, School of Economics, The University of New South Wales.

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