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Land Reform, the Market for Protection, and the Origins of the Sicilian Mafia: Theory and Evidence


  • Oriana Bandiera


Historical records show that the Sicilian mafia developed to protect land from predatory attacks at a time when publicly provided security was scarce and banditry widespread. Using a common-agency model, this article shows that (i) it is optimal for each landowner to voluntarily buy protection even if this results in a worse equilibrium for the landowning class and (ii) all things equal, mafia profits are higher where land is more fragmented. The argument is based on the fact that protection involves an externality, in the sense that by buying protection, each landowner deflects thieves on others' properties. Using qualitative data from a parliamentary survey (1881), the article also shows that in 19th century rural Sicily the mafia was in fact more likely to be active in towns where land was more divided. Copyright 2003, Oxford University Press.

Suggested Citation

  • 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.
  • Handle: RePEc:oup:jleorg:v:19:y:2003:i:1:p:218-244

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    References listed on IDEAS

    1. Brunetti, Aymo & Weder, Beatrice, 2003. "A free press is bad news for corruption," Journal of Public Economics, Elsevier, vol. 87(7-8), pages 1801-1824, August.
    2. Torsten Persson & GĂ©rard Roland & Guido Tabellini, 1997. "Separation of Powers and Political Accountability," The Quarterly Journal of Economics, Oxford University Press, vol. 112(4), pages 1163-1202.
    3. Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
    4. Rogowski, Ronald, 1987. "Trade and the variety of democratic institutions," International Organization, Cambridge University Press, vol. 41(02), pages 203-223, March.
    5. Knack, Stephen & Keefer, Philip, 1995. "Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Indicators," MPRA Paper 23118, University Library of Munich, Germany.
    6. John Ferejohn, 1986. "Incumbent performance and electoral control," Public Choice, Springer, vol. 50(1), pages 5-25, January.
    7. Robert Barro, 1973. "The control of politicians: An economic model," Public Choice, Springer, vol. 14(1), pages 19-42, March.
    8. repec:cup:apsrev:v:91:y:1997:i:03:p:531-551_21 is not listed on IDEAS
    9. Kaufmann, Daniel & Kraay, Aart & Zoido-Lobaton, Pablo, 1999. "Aggregating governance indicators," Policy Research Working Paper Series 2195, The World Bank.
    10. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
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