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Organised Crime and Technology

Mustafa Caglayan (), Alessandro Flamini () and Babak Jahanshahi ()
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Babak Jahanshahi: University of Edinburgh

No 143, DEM Working Papers Series from University of Pavia, Department of Economics and Management

Abstract: This paper shows that organised crime harms technological development. We provide evidence that forced resettlement of bosses promoted the mafia’s rooting in northern Italy. With forced resettlement as an exogenous source of variation, we unveil that mafias cause a reduction in technology levels. Moving from the technology stock to a flow generating it -innovation- we demonstrate that mafias stifle innovation. We argue that without mafia, Nature selects agents for their innovation capacity. Instead, with mafia, agents face an alternative strategy: relate with mafia; this strategy, infringing property rights and competition, hinders innovation. Using evolutionary dynamics, we show that while mafias decrease innovation, proper sanctions/indemnities can address the problem.

Keywords: Organised crime; evolutionary game theory; innovation; technology. (search for similar items in EconPapers)
JEL-codes: O17 O30 C73 R11 K14 K42 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-ent and nep-hrm
Date: 2018-11
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http://economia.unipv.it/docs/dipeco/quad/ps/RePEc/pav/demwpp/DEMWP0143.pdf (application/pdf)

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