Weak States: Causes and Consequences of the Sicilian Mafia

65 Pages Posted: 7 Dec 2017  

Daron Acemoglu

Massachusetts Institute of Technology (MIT) - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Giuseppe De Feo

University of Strathclyde, Glasgow - Strathclyde Business School - Department of Economics; University of Pavia - Department of Political Economy and Quantitative Methods

Giacomo De Luca

University of York - Department of Economics and Related Studies; KU Leuven - Centre for Institutions and Economic Performance (LICOS)

Multiple version iconThere are 3 versions of this paper

Date Written: November 2017

Abstract

We document that the spread of the Mafia in Sicily at the end of the 19th century was in part shaped by the rise of socialist Peasant Fasci organizations. In an environment with weak state presence, this socialist threat triggered landholders, estate managers and local politicians to turn to the Mafia to resist and combat peasant demands. We show that the location of the Peasant Fasci is significantly affected by an exceptionally severe drought in 1893, and using information on rainfall, we establish the causal effect of the Peasant Fasci on the location of the Mafia in 1900. We provide extensive evidence that rainfall before and after this critical period has no effect on the spread of the Mafia or various economic and political outcomes. In the second part of the paper, we use the source of variation in the location of the Mafia in 1900 to estimate its medium-term and long-term effects. We find significant and quantitatively large negative impacts of the Mafia on literacy and various public goods in the 1910s and 20s. We also show a sizable impact of the Mafia on political competition, which could be one of the channels via which it affected local economic outcomes. We document negative effects of the Mafia on longer-term outcomes (in the 1960s, 70s and 80s) as well, but these are in general weaker and often only marginally significant. One exception is its persistent and strong impact on political competition.

Keywords: criminal organizations, economic development, Mafia, political competition, weak states

JEL Classification: P16, K42, H11, H75

Suggested Citation

Acemoglu, Daron and De Feo, Giuseppe and De Luca, Giacomo, Weak States: Causes and Consequences of the Sicilian Mafia (November 2017). MIT Department of Economics Working Paper No. 17-10. Available at SSRN: https://ssrn.com/abstract=3083520 or http://dx.doi.org/10.2139/ssrn.3083520

Daron Acemoglu (Contact Author)

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Giuseppe De Feo

University of Strathclyde, Glasgow - Strathclyde Business School - Department of Economics ( email )

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HOME PAGE: http://www.strath.ac.uk/economics/staff/defeogiuseppedr/

University of Pavia - Department of Political Economy and Quantitative Methods ( email )

27100 Pavia
Italy

Giacomo De Luca

University of York - Department of Economics and Related Studies ( email )

Heslington
York, YO1 5DD
United Kingdom

KU Leuven - Centre for Institutions and Economic Performance (LICOS) ( email )

Waaistraat, 6
Leuven, B-3000
Belgium

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