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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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  1. Stelios Michalopoulos, 2009. "The Origins of Ethnolinguistic Diversity," Carlo Alberto Notebooks 110, Collegio Carlo Alberto.
  2. S. Michalopoulos & A. Naghavi & G. Prarolo, 2010. "Trade and Geography in the Economic Origins of Islam: Theory and Evidence," Working Papers 700, Dipartimento Scienze Economiche, Universita' di Bologna.
  3. G�ran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
  4. Dimico, Arcangelo & Isopi, Alessia & Olsson, Ola, 2012. "Origins of the Sicilian Mafia: The Market for Lemons," Working Papers in Economics 532, University of Gothenburg, Department of Economics.
  5. Oded Galor, 2006. "The Demographic Transition," Working Papers 2006-24, Brown University, Department of Economics.
  6. Edward L. Glaeser & Bruce Sacerdote, 1996. "Why is There More Crime in Cities?," Harvard Institute of Economic Research Working Papers 1746, Harvard - Institute of Economic Research.
  7. 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.
  8. J. Barkley Rosser, 2009. "Introduction," Chapters, in: Handbook of Research on Complexity, chapter 1 Edward Elgar.
  9. repec:rie:review:v:17:y:2012:i:3:n:2 is not listed on IDEAS
  10. Paolo Buonanno & Giacomo Pasini & Paolo Vanin, 2008. "Crime and Social Sanction," "Marco Fanno" Working Papers 0071, Dipartimento di Scienze Economiche "Marco Fanno".
  11. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, 08.
  12. David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
  13. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
  14. Kai A. Konrad & Stergios Skaperdas, 2005. "The Market for Protection and the Origin of the State," CESifo Working Paper Series 1578, CESifo Group Munich.
  15. Varese, Federico, 2005. "The Russian Mafia: Private Protection in a New Market Economy," OUP Catalogue, Oxford University Press, number 9780199279494, March.
  16. Mastrobuoni Giovanni & Patacchini Eleonora, 2012. "Organized Crime Networks: an Application of Network Analysis Techniques to the American Mafia," Review of Network Economics, De Gruyter, vol. 11(3), pages 1-43, September.
  17. Del Monte, Alfredo & Pennacchio, Luca, 2011. "The structure of agricultural production and the causes of brigandage and criminal organisations in Italy after Unification: theory and evidence," MPRA Paper 38875, University Library of Munich, Germany.
  18. Anderson, James E. & Bandiera, Oriana, 2005. "Private enforcement and social efficiency," Journal of Development Economics, Elsevier, vol. 77(2), pages 341-366, August.
  19. Durante, Ruben, 2009. "Risk, Cooperation and the Economic Origins of Social Trust: an Empirical Investigation," MPRA Paper 25887, University Library of Munich, Germany.
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