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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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  12. Mastrobuoni Giovanni & Patacchini Eleonora, 2012. "Organized Crime Networks: an Application of Network Analysis Techniques to the American Mafia," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-43, September.
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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. 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).
  3. 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.
  4. Guglielmo Barone & Gaia Narciso, 2011. "The effect of mafia on public transfers," Trinity Economics Papers tep2111, Trinity College Dublin, Department of Economics.
  5. 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.

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