Land Reform, the Market for Protection and the Origins of the Sicilian Mafia: Theory and Evidence

Posted: 29 Mar 2003

See all articles by Oriana Bandiera

Oriana Bandiera

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Abstract

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

Bandiera, Oriana, Land Reform, the Market for Protection and the Origins of the Sicilian Mafia: Theory and Evidence. Journal of Law, Economics and Organization, Vol. 19, No. 1, pp. 218-244, 2003. Available at SSRN: https://ssrn.com/abstract=355307

Oriana Bandiera (Contact Author)

London School of Economics & Political Science (LSE) - Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7519 (Phone)
+44 20 7055 6951 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

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