Trust and In-Group Favoritism in a Culture of Crime

67 Pages Posted: 24 May 2014

See all articles by Stephan Meier

Stephan Meier

Federal Reserve Bank of Boston; IZA Institute of Labor Economics; Columbia Business School - Management

Lamar Pierce

Washington University, Saint Louis - John M. Olin School of Business

Antonino Vaccaro

University of Navarra - IESE Business School

Abstract

We use experiments in high schools in two neighborhoods in the metropolitan area of Palermo, Italy to experimentally demonstrate that the historical informal institution of organized crime can undermine current institutions, even in religiously and ethnically homogeneous populations. Using trust and prisoner's dilemma games, we found that students in a neighborhood with high Mafia involvement exhibit lower generalized trust and trustworthiness, but higher in-group favoritism, with punishment norms failing to resolve these deficits. Our study suggests that a culture of organized crime can affect adolescent norms and attitudes that might support a vicious cycle of in-group favoritism and crime that in turn hinders economic development.

Keywords: organized crime, trust, in-group favoritism, Mafia

JEL Classification: C91, C92

Suggested Citation

Meier, Stephan and Pierce, Lamar and Vaccaro, Antonino, Trust and In-Group Favoritism in a Culture of Crime. IZA Discussion Paper No. 8169. Available at SSRN: https://ssrn.com/abstract=2441465

Stephan Meier (Contact Author)

Federal Reserve Bank of Boston ( email )

600 Atlantic Avenue
Boston, MA 02210
United States

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Columbia Business School - Management ( email )

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New York, NY 10027
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Lamar Pierce

Washington University, Saint Louis - John M. Olin School of Business ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States
314-935-5205 (Phone)

Antonino Vaccaro

University of Navarra - IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain

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