Purpose The main purpose of this paper is to analyze the determinants of money laundering in Italy. Given the high heterogeneity in terms of economic, social and institutional characteristics, Italy is a compelling case study. Design/methodology/approach By using annual data over the period 2008 to 2013, the authors estimate a balanced panel data linear model using feasible generalized least squares. Following the main literature on the economics of crime, the authors regress the crime rate in each region-year against a set of determinants that include socio-economic, enforcement and crime-specific factors. Findings The authors’ findings reveal that, in most Italian regions, enforcement activities do exert significant deterrence on criminal behaviors: and a negative relationship between enforcement and money laundering can be identified only when there are high levels of enforcement efforts. Moreover, the authors find that the major determinants influencing the rate of money laundering differ between northern, central and southern regions, confirming the existence of regional dualism. In particular, the crime rate in the northern and central area is positively related to the level of corruption and the incidence of mafia-type crimes and negatively related to educational attainment, whereas in the southern regions, money laundering is positively related to the size of the gaming and gambling sector. Originality/value The present paper contributes to the extant literature on the economics of crime in several ways. First, it explicitly analyzes a specific type of financial crime, which presents the higher degree of sanctioning regime in the Italian legislation. Second, Italy offers an important country study because of the forceful presence of mafia clans and organized crime systems operating in the illegal market.

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Purpose According to the INTERPOL definition, money laundering is: “any act or attempted act to conceal or disguise the identity of illegally obtained proceeds so that they appear to have originated from legitimate sources”. Along this line, the purpose of this paper is to investigate the link amongst money laundering, mafia and food activities, in the Italian provinces. Design/methodology/approach By using annual data over the period 2010 to 2018, the author estimates balanced panel data using the instrumental variables approach. The analysis includes both fixed and random effects, as well as robustness checks. Findings The main findings of this paper reveal that, in most Italian provinces, money launderers are deterred by the probability of being identified. In particular, the deterrent action of police and investigative forces seems to be very effective. Moreover, the results of the empirical analysis show that mafia-type organisations and food activities are positively correlated with money laundering. Originality/value This paper aims to provide a specific study on the link between apparently legal activities (food and beverage) and money laundering; a link that has so far been analysed mainly on a theoretical level. Moreover, it provides several insights in terms of policy implications.

Money laundering and waste-related crimes are widely studied by the literature. However, few attention has been paid to the connection between the latter and the former. Using Italian data at provincial level, the analysis presented here shows that also waste-related crimes generate illegal proceeds that increase the flows of dirty money that needs laundering. Moreover, evidence about cross-provincial spillovers is provided. Fighting money laundering and following dirty money (perhaps also internationally) may help decreasing illegal waste disposals and traffics, decreasing the yields generated by these crimes. JEL Codes: K32, Q53

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