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Poor Institutions, Rich Mines: Resource Curse in the Origins of the Sicilian Mafia

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  • Paolo Buonanno
  • Ruben Durante
  • Giovanni Prarolo
  • Paolo Vanin

Abstract

With weak law†enforcement institutions, a positive shock to the value of natural resources may increase demand for private protection and opportunities for rent appropriation through extortion, favouring the emergence of mafia†type organisations. We test this hypothesis by investigating the emergence of the mafia in twentieth century Sicily, where a severe lack of state property†rights enforcement coincided with a steep rise in international demand for sulphur, Sicily's most valuable export commodity. Using historical data on the early incidence of mafia activity and on the distribution of sulphur reserves, we document that the mafia was more present in municipalities with greater sulphur availability.

Suggested Citation

  • Paolo Buonanno & Ruben Durante & Giovanni Prarolo & Paolo Vanin, 2015. "Poor Institutions, Rich Mines: Resource Curse in the Origins of the Sicilian Mafia," Economic Journal, Royal Economic Society, vol. 125(586), pages 175-202, August.
    • Handle: RePEc:wly:econjl:v:125:y:2015:i:586:p:f175-f202
    DOI: 10.1111/ecoj.12236
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    More about this item

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • N33 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Europe: Pre-1913
    • N54 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - Europe: 1913-
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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