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

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  • Paolo Buonanno
  • Ruben Durante
  • Giovanni Prarolo
  • Paolo 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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Bibliographic Info

Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 261.

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Length: 35 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:cca:wpaper:261

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Keywords: Natural Resource Curse; Weak Institutions; Mafia-type Organizations;

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  1. Stelios Michalopoulos & Alireza Naghavi & Giovanni Prarolo, . "Trade and Geography in the Economic Origins of Islam: Theory and Evidence," Discussion Papers Series, Department of Economics, Tufts University 0750, Department of Economics, Tufts University.
  2. Paolo Buonanno & Giacomo Pasini & Paolo Vanin, 2008. "Crime and Social Sanction," "Marco Fanno" Working Papers 0071, Dipartimento di Scienze Economiche "Marco Fanno".
  3. Ruben Durante, 2010. "Risk, Cooperation and the Economic origins of social Trust: an empirical Investigation," Sciences Po publications info:hdl:2441/eu4vqp9ompq, Sciences Po.
  4. Stelios Michalopoulos, 2009. "The Origins of Ethnolinguistic Diversity," Carlo Alberto Notebooks 110, Collegio Carlo Alberto.
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  7. repec:rie:review:v:17:y:2012:i:3:n:2 is not listed on IDEAS
  8. Varese, Federico, 2005. "The Russian Mafia: Private Protection in a New Market Economy," OUP Catalogue, Oxford University Press, number 9780199279494.
  9. Arcangelo Dimico & Alessia Isopi & Ola Olsson, . "Origins of the Sicilian Mafia: The Market for Lemons," Discussion Papers 12/01, University of Nottingham, CREDIT.
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  11. 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.
  12. Del Monte, Alfredo & Pennacchio, Luca, 2011. "The structure of agricultural production and the causes of brigandage and criminal organisations in Italy after Unification: theory and evidence," MPRA Paper 38875, University Library of Munich, Germany.
  13. 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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  16. 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.
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Cited by:
  1. Guglielmo Barone & Gaia Narciso, 2011. "The effect of mafia on public transfers," Trinity Economics Papers tep2111, Trinity College Dublin, Department of Economics.
  2. De Feo, Giuseppe & De Luca, Giacomo, 2013. "Mafia in the ballot box," SIRE Discussion Papers 2013-104, Scottish Institute for Research in Economics (SIRE).
  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. 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.
  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).

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