Land Reform, the Market for Protection and the Origins of the Sicilian Mafia: Theory and Evidence
Posted: 29 Mar 2003
Historical records show that the Sicilian mafia developed to protect land from predatory attacks, at a time when publicly provided security was scarce and banditry widespread. Using a common-agency model, the paper shows that: (i) it is optimal for each landowner to voluntarily buy protection even if this results in a worse equilibrium for the landowning class and (ii) other things equal, mafia profits are higher where land is more fragmented. The argument is based on the fact that protection each landowner deflects thieves on others' properties. Using qualitative data from a parliamentary survey (1881), the paper also shows that in 19th century rural Sicily, mafia was in fact more likely to be active in towns where land was more divided.
Keywords: Protection, property rights enforcement, common agency, Sicily-history
JEL Classification: 017, D23, C70, N43
Suggested Citation: Suggested Citation