The macroeconomic impact of organized crime: a neo-Kaleckian perspective
AbstractThe paper analyzes how organized crime aﬀects the economy through its impact on the eﬀective demand, following the Neo-Kaleckian approach. From this perspective, the presence of organized crime, on the one hand, tends to reduce the eﬀective demand draining resources through extortion, bribery of public oﬃcials and encouraging consumption of criminal goods (illegal goods and goods produced in the underground economy), on the other hand, tends to increase the eﬀective demand using the proceeds of criminal activity in the purchase of legal consumption and investment goods. The model highlights the opposing action of these two forces and identiﬁes the conditions for a negative impact on the degree of capacity utilization and the growth rate. For the latter, these conditions tend to be more stringent, due to the direct impact of organized crime on investment decisions. Overall, the operation of organized crime tends to negatively inﬂuence the economic activity to the extent that the income drained from the legal sector is not reused into the same sector.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 40077.
Date of creation: Jul 2012
Date of revision:
Neo-Kaleckian; macroeconomics; organized crime; illegal or illicit markets;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- O17 - Economic Development, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
- K4 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-23 (All new papers)
- NEP-IUE-2012-07-23 (Informal & Underground Economics)
- NEP-MAC-2012-07-23 (Macroeconomics)
- NEP-PKE-2012-07-23 (Post Keynesian Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Antonio Acconcia & Claudia Cantabene, 2006.
"A Big Push to Deter Corruption: Evidence from Italy,"
CSEF Working Papers
159, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 01 May 2008.
- Antonio Acconcia & Claudia Cantabene, 2008. "A Big Push To Deter Corruption:Evidence From Italy," Giornale degli Economisti, GDE (Giornale degli Economisti e Annali di Economia), Bocconi University, vol. 67(1), pages 75-102, March.
- Centorrino M. & Ofria F., 2008. "Organized crime and labour productivity in the Mezzogiorno: an application of the "Kaldor-Verdoorn" model," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1, pages 163-188.
- Daniele V. & Marani U., 2008. "The effect of organized crime on foreign investments: an empirical analysis for the Italian Provinces," Rivista economica del Mezzogiorno, Società editrice il Mulino, issue 1, pages 189-218.
- Del Monte, Alfredo & Papagni, Erasmo, 2007. "The determinants of corruption in Italy: Regional panel data analysis," European Journal of Political Economy, Elsevier, vol. 23(2), pages 379-396, June.
- Claudio Detotto & Edoardo Otranto, 2010. "Does Crime Affect Economic Growth?," Kyklos, Wiley Blackwell, vol. 63(3), pages 330-345, 08.
- Anderson, David A, 1999. "The Aggregate Burden of Crime," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 611-42, October.
- Peri Giovanni, 2004. "Socio-Cultural Variables and Economic Success: Evidence from Italian Provinces 1951-1991," The B.E. Journal of Macroeconomics, De Gruyter, vol. 4(1), pages 1-36, September.
- Paolo Buonanno & Daniel Montolio & Paolo Vanin, 2006.
"Does Social Capital Reduce Crime?,"
0605, University of Bergamo, Department of Economics.
- Paolo Pinotti, 2012.
"The Economic Costs of Organized Crime: Evidence from Southern Italy,"
054, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
- 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.
- Vittorio, Daniele, 2009. "Organized crime and regional development. A review of the Italian case," MPRA Paper 16547, University Library of Munich, Germany.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.