Organised Crime and Technology
55 Pages Posted: 8 Nov 2019
Date Written: November 2019
We show that mafias harm technological development. We provide evidence that forced resettlement of bosses promoted mafias rooting in northern Italy. With forced resettlement as exogenous source of variation, we unveil that mafias cause a reduction in technology levels. Moving to a technology generating flow - 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.
Keywords: organised crime, evolutionary game theory, innovation, technology
JEL Classification: O17, O30, C73, R11, K14, K42
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