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Organized Crime, Corruption and Growth: Theory and Evidence

Listed author(s):
  • Keith Blackburn
  • Kyriakos C. Neanidis
  • Maria Paola Rana

We develop a framework for studying the interactions between organized crime and corruption, together with the individual and combined effects of these phenomena on economic growth. Criminal organizations co-exist with law-abiding productive agents and potentially corrupt law enforcers. The crime syndicate obstructs the economic activities of agents through extortion, and may pay bribes to law enforcers in return for their compliance in this. We show how organized crime has a negative e¤ect on growth, and how this e¤ect may be either enhanced or mitigated in the presence of corruption. The latter of these possibilities is evidenced strongly in an exhaustive empirical investigation using a panel of Italian regions for the period 1983-2009.

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File URL: http://hummedia.manchester.ac.uk/schools/soss/cgbcr/discussionpapers/dpcgbcr210.pdf
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Paper provided by Economics, The Univeristy of Manchester in its series Centre for Growth and Business Cycle Research Discussion Paper Series with number 210.

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Length: 51 pages
Date of creation: 2015
Handle: RePEc:man:cgbcrp:210
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Web page: http://www.socialsciences.manchester.ac.uk/subjects/economics/our-research/centre-for-growth-and-business-cycle-research/

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  18. Del Monte, Alfredo & Papagni, Erasmo, 2007. "The determinants of corruption in Italy: Regional panel data analysis," European Journal of Political Economy, Elsevier, vol. 23(2), pages 379-396, June.
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  23. Besley, Timothy & McLaren, John, 1993. "Taxes and Bribery: The Role of Wage Incentives," Economic Journal, Royal Economic Society, vol. 103(416), pages 119-141, January.
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