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Organised Crime and Technology

Author

Listed:
  • Mustafa Caglayan

    () (Heriot Watt University)

  • Alessandro Flamini

    () (Department of Economics and Management, University of Pavia)

  • Babak Jahanshahi

    () (University of Edinburgh)

Abstract

This paper shows that organised crime harms technological development. We provide evidence that forced resettlement of bosses promoted the mafia’s rooting in northern Italy. With forced resettlement as an exogenous source of variation, we unveil that mafias cause a reduction in technology levels. Moving from the technology stock to a flow generating it -innovation- we demonstrate that mafias stifle innovation. We argue that without mafia, Nature selects agents for their innovation capacity. Instead, with mafia, agents face an alternative strategy: relate with mafia; this strategy, infringing property rights and competition, hinders innovation. Using evolutionary dynamics, we show that while mafias decrease innovation, proper sanctions/indemnities can address the problem.

Suggested Citation

  • Mustafa Caglayan & Alessandro Flamini & Babak Jahanshahi, 2018. "Organised Crime and Technology," DEM Working Papers Series 143, University of Pavia, Department of Economics and Management.
  • Handle: RePEc:pav:demwpp:demwp0143
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    References listed on IDEAS

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    Cited by:

    1. Mustafa Caglayan & Alessandro Flamini & Babak Jahanshahi, 2017. "Organized Crime and Technology," DEM Working Papers Series 136, University of Pavia, Department of Economics and Management.
    2. repec:fan:steste:v:html10.3280/ste2016-118016 is not listed on IDEAS

    More about this item

    Keywords

    Organised crime; evolutionary game theory; innovation; technology.;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • K14 - Law and Economics - - Basic Areas of Law - - - Criminal Law
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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