Why is Italy Disproportionally Corrupt?: A Conjecture

Different indicators show that Italy is an outlier in terms of corruption. As developed a country as Italy should have a much lower level of corruption. All the factors scholars have found to be affecting corruption fail to explain this puzzle. I start instead from the assumption that corrupt exchanges thrive when parties can trust each other both to comply with their obligations and not to snitch. Could Italians enjoy a greater ability to cooperate successfully in illegal markets, and could this ability to make their illegal pacts stick explain their anomalous propensity at striking corrupt deals? One could think of mafia enforcement, which certainly helps. Yet, corruption occurs also outside the regions with heavy mafia presence—it seems rather a white-collar affair in which threats are unnecessary and no blood is spilt. I consider a special bonding mechanism, the sharing of compromising information (SCI), and—relying on evidence from case studies and an experiment—I illustrate how SCI works in bringing about cooperation in other illegal markets. But why should Italians be in a better position to rely on SCI to pursue their corrupt deals? The answer, I contend, lies in the peculiarity of Italy’s judicial system, which is at once inefficient yet independent, and jointly these features make it exploitable by villains as a cheap, reliable and unwitting enforcing mechanism for their deals.