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

  • Paolo Buonanno
  • Ruben Durante
  • Giovanni Prarolo
  • Paolo 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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File URL: http://www.carloalberto.org/assets/working-papers/no.261.pdf
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Paper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 261.

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Length: 35 pages
Date of creation: 2012
Date of revision:
Handle: RePEc:cca:wpaper:261
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  8. 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.
  9. Stelios Michalopoulos & Alireza Naghavi & Giovanni Prarolo, 2010. "Trade and Geography in the Economic Origins of Islam: Theory and Evidence," Working Papers 2010.75, Fondazione Eni Enrico Mattei.
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  11. 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.
  12. G�ran Therborn & K.C. Ho, 2009. "Introduction," City, Taylor & Francis Journals, vol. 13(1), pages 53-62, March.
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  14. Anderson, James E. & Bandiera, Oriana, 2005. "Private enforcement and social efficiency," Journal of Development Economics, Elsevier, vol. 77(2), pages 341-366, August.
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  16. Durante, Ruben, 2009. "Risk, Cooperation and the Economic Origins of Social Trust: an Empirical Investigation," MPRA Paper 25887, University Library of Munich, Germany.
  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. Oded Galor, 2006. "The Demographic Transition," Working Papers 2006-24, Brown University, Department of Economics.
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