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

Author

Listed:
  • Paolo Buonanno

    (University of Bergamo)

  • Ruben Durante
  • Giovanni Prarolo

    (University of Bologna, Department of Economics)

  • Giovanni Prarolo

    (University of Bologna, Department of Economics)

Abstract

Under weak law-enforcement institutions, a positive shock to the value of natural resources can increase demand for private protection and opportunities for rent appropriation through extortion, ultimately favoring the emergence of mafia-type organizations specialized in such activities. Using a newly collected municipal level dataset, we test this hypothesis by investigating mafia’s emergence in XIX century Sicily, where a severe lack of state property-right enforcement coincided with a steep rise in international demand for sulfur, Sicily’s most valuable export commodity. Consistently with this hypothesis, we find robust evidence of significantly higher early mafia activity in municipalities with greater sulfur availability.

Suggested Citation

  • Paolo Buonanno & Ruben Durante & Giovanni Prarolo & Giovanni Prarolo, 2013. "Rich Mines, Poor Institutions: Resource Curse and the Origins of the Sicilian Mafia," Sciences Po publications info:hdl:2441/16jvuuvsuc9, Sciences Po.
  • Handle: RePEc:spo:wpmain:info:hdl:2441/16jvuuvsuc939q3mrra3k9t0sa
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    File URL: http://spire.sciencespo.fr/hdl:/2441/16jvuuvsuc939q3mrra3k9t0sa/resources/mafia.pdf
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    References listed on IDEAS

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    2. Paolo Buonanno & Giacomo Pasini & Paolo Vanin, 2012. "Crime and social sanction," Papers in Regional Science, Wiley Blackwell, vol. 91(1), pages 193-218, March.
    3. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    4. Frankel, Jeffrey A., 2010. "The Natural Resource Curse: A Survey," Scholarly Articles 4454156, Harvard Kennedy School of Government.
    5. 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.
    6. Stelios Michalopoulos & Alireza Naghavi & Giovanni Prarolo, 2012. "Trade and Geography in the Origins and Spread of Islam," Working Papers 2012-12, Brown University, Department of Economics.
    7. 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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    12. Dimico, Arcangelo & Isopi, Alessia & Olsson, Ola, 2017. "Origins of the Sicilian Mafia: The Market for Lemons," The Journal of Economic History, Cambridge University Press, vol. 77(04), pages 1083-1115, December.
    13. 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.
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    1. repec:bla:pacecr:v:22:y:2017:i:3:p:410-434 is not listed on IDEAS

    More about this item

    Keywords

    Resource Curse; Weak Institutions; Mafia-type Organizations;

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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