Organised crime, captured politicians, and the allocation of public resources

Marco Di Cataldo and Nicola Mastrorocco

No 2020:04, Working Papers from Department of Economics, University of Venice "Ca' Foscari"

Abstract: What is the impact of organised crime on the allocation of public resources and on tax collection? This paper studies the consequences of collusion between members of criminal organisations and politicians in Italian local governments. In order to capture the presence of organised crime, we exploit the staggered enforcement of a national law allowing the dissolution of a municipal government upon evidence of collusion between elected officials and the mafia. We measure the consequences of this infiltration of mafia groups within local governments by using data on public spending, local revenues, and elected politicians at the municipality level. Difference-in-differences estimates reveal that infiltrated local governments spend more on average for construction and waste management, less for municipal police and public transport, and collect fewer taxes for waste and garbage. In addition, we uncover key elements of local elections associated with mafia-government collusion.

Keywords: Organised crime; collusion; local public finance; municipalities; Italy (search for similar items in EconPapers)
JEL-codes: D72 H72 K42 (search for similar items in EconPapers)
Pages: 70 pages
Date: 2020
New Economics Papers: this item is included in nep-cdm, nep-eur and nep-law
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Organized Crime, Captured Politicians, and the Allocation of Public Resources (2022)
Working Paper: Organised Crime, Captured Politicians and the Allocation of Public Resources (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:ven:wpaper:2020:04

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