Weak Institutions and Social Conflict: Peasants' Revolts and the Rise of the Sicilian Mafia

Event Date: 28 January 2015

Speaker: Giuseppe De Feo, Department of Economics

ABSTRACT

The literature on the economics of organised crime has identified in the presence of weak institutions, poor law enforcement, and lack of public and private trust the conditions that favour the emergence of criminal organisations. The reason is that they establish themselves as private providers of protection of property rights and of contract enforcement.

Recent contributions has investigated the reason why criminal organisations have emerged in one region or area and not in others sharing the same institutional framework. The focus has been on the demand side of the market for private protection and have highlighted that criminal organizations are more likely to emerge in wealthier areas where the willingness to pay for protection is higher.

Using a novel database of Sicilian economic and social characteristics, we show that, in addition to the protection provided to the rich export-oriented productions, the mafia has also developed in order to contrast the emerging peasants' socialist organisations which were threatening the landlords' rent and the profit of rural entrepreneurs and managers in the late XIX century rural Sicily of the latifundia.

Published: 11 February 2015