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Poor Institutions, Rich Mines: Resource Curse and the Origins of the Sicilian Mafia

  • P. Buonanno
  • R. Durante
  • G. Prarolo
  • P. Vanin

This study explains the emergence of the Sicilian mafia in the XIX century as the product of the interaction between natural resource abundance and weak institutions. We advance the hypothesis that the mafia emerged after the collapse of the Bourbon Kingdom in a context characterized by a severe lack of state property-right enforcement in response to the rising demand for the protection of sulfur - Sicily's most valuable export commodity - whose demand in the international markets was soaring at the time. We test this hypothesis combining data on the early presence of the mafia and on the distribution of sulfur reserves across Sicilian municipalities and find evidence of a positive and significant effect of sulphur availability on mafia's diffusion. These results remain unchanged when including department fixed-effects and various geographical and historical controls, when controlling for spatial correlation, and when comparing pairs of neighboring municipalities with and without sulfur.

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Paper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number wp844.

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Date of creation: Sep 2012
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Handle: RePEc:bol:bodewp:wp844
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  2. Michalopoulos, Stelios & Naghavi, Alireza & Prarolo, Giovanni, 2010. "Trade and Geography in the Economic Origins of Islam: Theory and Evidence," MPRA Paper 23136, University Library of Munich, Germany.
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  14. Konrad, Kai A. & Skaperdas, Stergios, 1999. "The Market for Protection and the Origin of the State," CEPR Discussion Papers 2173, C.E.P.R. Discussion Papers.
  15. Varese, Federico, 2005. "The Russian Mafia: Private Protection in a New Market Economy," OUP Catalogue, Oxford University Press, number 9780199279494, March.
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