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An empirical analysis of organized crime, corruption and economic growth

Author

Listed:
  • Kyriakos C. Neanidis

    (University of Manchester)

  • Maria Paola Rana

    (University of Manchester)

  • Keith Blackburn

    (University of Manchester)

Abstract

In a companion study, Blackburn et al. (Econ Theory Bull, 2017), we have developed a theoretical framework for studying interactions between organized crime and corruption, with the view of examining the combined effects of these phenomena on economic growth. The analysis therein illustrates that organized crime has a negative effect on growth, but that the magnitude of the effect may be either enhanced or mitigated in the presence of corruption. In this paper we tackle the ambiguity produced by the coexistence of the two illicit activities with an empirical investigation using a panel of Italian regions for the period 1983–2009. We find that organized crime distorts growth less when it coexists with corruption and show our results to be robust to different specifications, measures of organized crime, and estimation techniques.

Suggested Citation

  • Kyriakos C. Neanidis & Maria Paola Rana & Keith Blackburn, 2017. "An empirical analysis of organized crime, corruption and economic growth," Annals of Finance, Springer, vol. 13(3), pages 273-298, August.
    • Handle: RePEc:kap:annfin:v:13:y:2017:i:3:d:10.1007_s10436-017-0299-7
    DOI: 10.1007/s10436-017-0299-7
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    Cited by:

    1. Keith Blackburn & Kyriakos C. Neanidis & Maria Paola Rana, 2017. "A theory of organized crime, corruption and economic growth," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 5(2), pages 227-245, October.
    2. Clement Olalekan Olaniyi, 2022. "On the transmission mechanisms in the finance–growth nexus in Southern African countries: Does institution matter?," Economic Change and Restructuring, Springer, vol. 55(1), pages 153-191, February.
    3. Tamara Fioroni & Andrea Mario Lavezzi & Giovanni Trovato, 2023. "Organized Crime, Corruption and Economic Growth," Discussion Papers 2023/298, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    4. Afonso, Oscar & Bandeira, Ana Maria & Lima, Pedro G., 2022. "Growth and welfare effects of corruption penalties," Economic Systems, Elsevier, vol. 46(3).
    5. Giovanni Bernardo & Irene Brunetti & Mehmet Pinar & Thanasis Stengos, 2021. "Measuring the presence of organized crime across Italian provinces: a sensitivity analysis," European Journal of Law and Economics, Springer, vol. 51(1), pages 31-95, February.

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    More about this item

    Keywords

    Corruption; Economic growth; Italy; Organized crime;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • K49 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Other
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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