Weak States: Causes and Consequences of the Sicilian Mafia

Daron Acemoglu, Giuseppe De Feo and Giacomo De Luca

The Review of Economic Studies, 2020, vol. 87, issue 2, 537-581

Abstract: We document that the spread of the Mafia in Sicily at the end of the 19th century was in part caused by the rise of socialist Peasant Fasci organizations. In an environment with weak state presence, this socialist threat triggered landowners, estate managers, and local politicians to turn to the Mafia to resist and combat peasant demands. We show that the location of the Peasant Fasci is significantly affected by a severe drought in 1893, and using information on rainfall, we estimate the impact of the Peasant Fasci on the location of the Mafia in 1900. We provide extensive evidence that rainfall before and after this critical period has no effect on the spread of the Mafia or various economic and political outcomes. In the second part of the article, we use this source of variation in the strength of the Mafia in 1900 to estimate its medium-term and long-term effects. We find significant and quantitatively large negative impacts of the Mafia on literacy and various public goods in the 1910s and 20s. We also show a sizable impact of the Mafia on political competition, which could be one of the channels via which it affected local economic outcomes. We document negative effects of the Mafia on longer-term outcomes (in the 1960s, 70s, and 80s) as well, but these are in general weaker and often only marginally significant. One exception is its persistent and strong impact on political competition.

Keywords: Criminal organizations; Economic development; Mafia; Political competition; Weak states (search for similar items in EconPapers)
JEL-codes: H11 H75 K42 P16 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (61)

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Working Paper: Weak States: Causes and Consequences of the Sicilian Mafia (2017)
Working Paper: Weak States: Causes and Consequences of the Sicilian Mafia (2017)
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