The paper analyses the spread of organized crime in Italy and describes the institutional environment that may have favoured the birth of mafias and their subsequent spread beyond traditional borders. We further evaluate the impact on economic growth and the different channels through which these effects occur. The analysis draws from the most recent literature and employs new data sources.
The new indicator of organized crime prevalence that we propose highlights a growing presence of mafias in some areas of the Center and the North. The geographical expansion is driven by economic and social factors, such as the predetermined level of GDP per capita and the degree of corruption in the target areas. In the long term, the areas with a higher mafia presence recorded significantly lower growth rates in value added compared to other areas.
Forthcoming in: Italian Economic Journal / Rivista italiana degli economisti.
