FT Alphaville " Property rights and the economic origins of the Sicilian mafia Fascinating abstract of a new paper by Paolo Buonanno, Ruben Durante, Giovanni Prarolo, and Paolo Vanin: This research attempts to explain the large differences in the early diffusion of the mafia across different areas of Sicily. We advance the hypothesis that, after the demise of Sicilian feudalism, the lack of publicly provided property-right protection from widespread banditry favored the development of a florid market for private protection and the emergence of a cartel of protection providers: the mafia. This would especially be the case in those areas (prevalently concentrated in the Western part of the island) characterized by the production and commercialization of sulphur and citrus fruits, Sicily's most valuable export goods whose international demand was soaring at the time. Via NEP-HIS and a hat tip to Jason Zweig's twitter feed. The paper is an attempt to explain why the mafia arose in Sicily's west about a hundred years before it appeared on the rest of the island. NEP-HIS explains what the findings add to earlier academic research attempting to answer the same question: Diego Gambetta, a sociologist at Nuffield College Oxford, has long argued that eastern landlords were better equipped to maintain control as they were present on their lands, whilst western absentee-landlords left their tenants vulnerable to violence by bandits, therefore creating a market for mafiosi. Oriana Bandiera, an economist at the LSE, advances a model that implies that the mafia were more active where landholdings were fragmented. Buonanno et al. add another explanation: there was a high demand for protection in those areas in which citrus crops and sulphur mining were the most important economic activities. These commodities were vulnerable to predatory attacks by bandits when being transported to markets. Property rights on the island were weak, and so areas which specialised in these vulnerable commodities demanded protection services in order to stay in business. ... and also writes about the authors" methodology: The authors use a sociological survey of Sicily's mafia conducted in 1900 to code the level of mafia presence at the municipality level. This dataset, which the authors argue has never before been analysed quantitatively, covers more of the island than any other historical source, and does not suffer from the biases inherent in government-collected data. The authors use regression analysis to explain mafia activity with geomorphological (topography), census and road infrastructure data. The NEP-HIS review does include a few criticisms of the paper and we recommend the whole post. Again the paper is here. Related links: So a Sicilian mafioso walks into HSBC - FT Alphaville Goodfella game theory - FT Alphaville This entry was posted by Cardiff Garcia on Monday, March 12th, 2012 at 16:13 and is filed under Capital markets. Tagged with Italy, mafia, Sicilian Mafia.