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When the Mafia Comes to Town

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This paper investigates the effect of diffusion of organized crime on local economies by examining a legal institution that operated in Italy between 1956 and 1988. The law allowed Public Authorities to force mafiosos to resettle to another town. Using variation in the number of resettled mafia members across destination provinces in a differences-in-differences setting, I find no conclusive evidence on the effect of the policy on crime or homicides, while there is a very robust positive impact on employment in the construction sector. Results are consistent with mafia exploiting these new locations mainly for money laundering. JEL Classification: K42, O17.

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  • Annalisa Scognamiglio, 2015. "When the Mafia Comes to Town," CSEF Working Papers 404, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    • Handle: RePEc:sef:csefwp:404
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    Cited by:

    1. Francesca Maria Calamunci & Federico Fabio Frattini, 2023. "When Crime Tears Communities Apart: Social Capital and Organised Crime," Working Papers 2023.08, Fondazione Eni Enrico Mattei.
    2. Mustafa Caglayan & Alessandro Flamini & Babak Jahanshahi, 2017. "Organized Crime and Technology," DEM Working Papers Series 136, University of Pavia, Department of Economics and Management.
    3. Pierfrancesco Rolla & Patricia Justino, 2022. "The social consequences of organized crime in Italy," WIDER Working Paper Series wp-2022-106, World Institute for Development Economic Research (UNU-WIDER).
    4. Tomas Williams & Pablo Slutzky & Mauricio Villamizar-Villegas, 2019. "Drug Money and Bank Lending: The Unintended Consequences of Anti-Money Laundering Policies," Working Papers 2019-5, The George Washington University, Institute for International Economic Policy, revised May 2020.
    5. Caglayan, Mustafa & Flamini, Alessandro & Jahanshahi, Babak, 2021. "Hindering human capital accumulation: A hidden cost of the silent mafia?," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 828-845.
    6. Beqiraj, Elton & Fedeli, Silvia & Giuriato, Luisa, 2020. "Policy tolerance of economic crime? An empirical analysis of the effect of counterfeiting on Italian trade," European Journal of Political Economy, Elsevier, vol. 65(C).
    7. Francesca M. Calamunci & Livio Ferrante & Rossana Scebba, 2022. "Closed for mafia: Evidence from the removal of mafia firms on commercial property values," Journal of Regional Science, Wiley Blackwell, vol. 62(5), pages 1487-1511, November.
    8. Fortuna Casoria & Marianna Marino & Pierpaolo Parrotta & Davide Sala, 2019. "Local Government and Innovation: the case of Italian provinces," Working Papers halshs-02278092, HAL.
    9. Marco Di Cataldo & Nicola Mastrorocco, 2022. "Organized Crime, Captured Politicians, and the Allocation of Public Resources [“Mafiaand Public Spending: Evidence on the Fiscal Multiplier from a Quasi-Experiment]," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 38(3), pages 774-839.
    10. Rosario Crinò & Giovanni Immordino & Salvatore Piccolo, 2018. "Fighting Mobile Crime," DISCE - Working Papers del Dipartimento di Economia e Finanza def071, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    11. Lavinia Piemontese, 2021. "Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering," Working Papers halshs-02928546, HAL.
    12. Litterio Mirenda & Sauro Mocetti & Lucia Rizzica, 2019. "The real effects of 'ndrangheta: firm-level evidence," Temi di discussione (Economic working papers) 1235, Bank of Italy, Economic Research and International Relations Area.
    13. Lavinia Piemontese, 2020. "Uncovering Illegal and Underground Economies: The Case of Mafia Extortion Racketeering," Working Papers 2025, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    14. Silvia Fedeli & Vitantonio Mariella & Marco Onofri, 2018. "Determinants of Joblessness During the Economic Crisis: Impact of Criminality in the Italian Labour Market," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 139(2), pages 559-588, September.
    15. Rosario Crinó & Giovanni Immordino & Salvatore Piccolo, 2021. "Criminal mobility, fugitives, and extradition rules," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 23(1), pages 69-104, February.

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    More about this item

    Keywords

    Organized crime; law making; shadow economy.;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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