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ALL IS NOT LOST: Organized Crime and Social Capital Formation

Author

Listed:
  • Paolo Buonanno

    (Department of Economics, University of Bergamo)

  • Irene Ferrari

    (Department of Economics, Ca' Foscari University of Venice; NETSPAR)

  • Alessandro Saia

    (Department of Economics, University of Bologna)

Abstract

We investigate how a disruptive social event, namely the emergence of organized crime infiltration in the local government, shapes social capital. We exploit the dismissal of city councils infiltrated by organized crime and a novel and fine-grained measure of social capital in Italy. Using a difference-indifferences strategy, we show that municipalities' dissolution is associated with a significant and sizable increase in social capital. We document the mechanisms through which the presence of organized crime affects social capital, including trust diversion, changes in civic engagement, and its impact on local institutions and governance.

Suggested Citation

  • Paolo Buonanno & Irene Ferrari & Alessandro Saia, 2023. "ALL IS NOT LOST: Organized Crime and Social Capital Formation," Working Papers 2023: 16, Department of Economics, University of Venice "Ca' Foscari", revised 2024.
    • Handle: RePEc:ven:wpaper:2023:16
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    organized crime; social capital; Italy; 5 per Mille;
    All these keywords.

    JEL classification:

    • A13 - General Economics and Teaching - - General Economics - - - Relation of Economics to Social Values
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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