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The Effect Of Mafia On Public Transfers

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Author Info

  • Guglielmo Barone

    ()
    (Bank of Italy, Economic Research Department, Branch of Bologna, Piazza Cavour 6, 40124, Bologna, Italy)

  • Gaia Narciso

    ()
    (Trinity College Dublin, CReAM and IIIS, Department of Economics, 3012 Arts Building, Dublin 2, Ireland)

Abstract

This paper analyzes the impact of organized crime on the allocation of public transfers. We assemble an innovative data set on Italian mafia and public funds to businesses at municipality level and instrument current mafia activity with rainfall in the XIX century and geographical shifters of land productivity. We show that organized crime greatly increases the amount of public funds to businesses. Mafia is also found to lead to episodes of corruption in the public administration sector. Our results suggest that the design of geographically targeted aid policies should take into account local crime conditions.

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Bibliographic Info

Paper provided by IIIS in its series The Institute for International Integration Studies Discussion Paper Series with number iiisdp398.

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Length: 37 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:iis:dispap:iiisdp398

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Keywords: organized crime; public transfers; corruption;

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References

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  1. Paolo Buonanno & Ruben Durante & Giovanni Prarolo & Paolo Vanin, 2012. "Poor institutions, rich mines: resource curse and the origins of the Sicilian mafia," Working Papers 2012/29, Institut d'Economia de Barcelona (IEB).
  2. Fernanda Brollo & Tommaso Nannicini & Roberto Perotti & Guido Tabellini, 2009. "The Political Resource Curse," Working Papers 356, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
  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. Bernini, Cristina & Pellegrini, Guido, 2011. "How are growth and productivity in private firms affected by public subsidy? Evidence from a regional policy," Regional Science and Urban Economics, Elsevier, vol. 41(3), pages 253-265, May.
  5. Buonanno, Paolo & Durante, Ruben & Prarolo, Giovanni & Vanin, Paolo, 2011. "On the historical and geographic origins of the Sicilian mafia," MPRA Paper 37009, University Library of Munich, Germany, revised 01 Feb 2012.
  6. Marcelo J. Moreira, 2003. "A Conditional Likelihood Ratio Test for Structural Models," Econometrica, Econometric Society, vol. 71(4), pages 1027-1048, 07.
  7. Michael P. Murray, 2006. "Avoiding Invalid Instruments and Coping with Weak Instruments," Journal of Economic Perspectives, American Economic Association, vol. 20(4), pages 111-132, Fall.
  8. Paolo Pinotti, 2012. "The economic costs of organized crime: evidence from southern Italy," Temi di discussione (Economic working papers) 868, Bank of Italy, Economic Research and International Relations Area.
  9. 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.
  10. Mendelsohn, Robert & Nordhaus, William D & Shaw, Daigee, 1994. "The Impact of Global Warming on Agriculture: A Ricardian Analysis," American Economic Review, American Economic Association, vol. 84(4), pages 753-71, September.
  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. Bronzini, Raffaello & de Blasio, Guido, 2006. "Evaluating the impact of investment incentives: The case of Italy's Law 488/1992," Journal of Urban Economics, Elsevier, vol. 60(2), pages 327-349, September.
  13. Alberto Abadie & Javier Gardeazabal, 2003. "The Economic Costs of Conflict: A Case Study of the Basque Country," American Economic Review, American Economic Association, vol. 93(1), pages 113-132, March.
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  1. Les liens du 11 mai 2012
    by jcbriquet in Ressources pour économistes on 2012-05-11 11:17:16
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Cited by:
  1. Paolo Pinotti, 2012. "The Economic Costs of Organized Crime: Evidence from Southern Italy," Working Papers 054, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.

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