Organized crime and business subsidies: Where does the money go?

Barone, Guglielmo; Narciso, Gaia

doi:10.1016/j.jue.2015.01.002

Cited by 239 publications

(50 citation statements)

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“…Furthermore, there are empirical studies that show a positive relationship between government expenditure and organized crime (Caruso, 2009;Gennaioli et al, 2010;Neanidis et al, 2014). The plausible interpretation for these findings give support to the hypothesis that more State in the market create opportunities for the criminal associations, which are particularly interested in the appropriation of public money (Barone et al, 2015). However since government must allocate scarce resources among various priorities (defence, education, environment, etc.…”

Section: Introductionmentioning

confidence: 67%

“…However, these findings diverge from those reported in the literature, that show a positive impact of public spending on organized crime (Caruso, 2009;Gennaioli et al, 2010;Neanidis et al, 2014). The positive relationship finds support in the fact that criminal organizations are particularly interested in the appropriation of public money (Barone et al, 2015). Two motivations can explain the weak or null association with respect to the positive relationship.…”

Section: Resultsmentioning

confidence: 95%

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An Empirical Analysis of the Public Spending Decomposition on Organized Crime

Berrittella

Provenzano

2016

SSRN Journal

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The aim of this paper is to investigate, empirically, what components of the public spending imply a decreasing effect on the organized crime and what components create opportunities for the organized crime, discussing also the role of government efficiency. The findings show a strikingly consistent pattern. Organized crime mainly operates in the distribution of the public spending for health, housing and community amenities. There is a decreasing effect on organized crime of the public expenditure devoted to education and to create morality values, such as the expenditure for recreation, culture and religion. Finally, government efficiency in public spending is beneficial for reducing the opportunities of the organized crime.

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Section: Introductionmentioning

confidence: 67%

Section: Resultsmentioning

confidence: 95%

An Empirical Analysis of the Public Spending Decomposition on Organized Crime

Berrittella

Provenzano

2016

SSRN Journal

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“…Such a possibility is unlikely to happen. As noted by Barone and Narciso (2015), the current role of the agricultural sector in the Italian economy is consistently lower than it used to be. 26 In addition, in our regression we address possible differences in the importance of the agricultural sector across provinces by including the percentage of employed people within the primary sector in each province.…”

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confidence: 97%

“…Foreign directed investments (FDI) are also negatively affected by the local presence of criminal organizations (Daniele and Marani, 2011). 8 Finally, although it is undeniable that mafia-type organizations constitute a deterrent for both national and international private investors, Barone and Narciso (2015) demonstrate how mafia presence is associated with higher probability to receive public funds in the form of business subsidies.…”

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confidence: 99%

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'Mafia Inc.': When Godfathers Become Entrepreneurs

Moglie

Sorrenti

2017

SSRN Journal

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We study the investment of criminal organizations in the legal economy. We focus on Italy, a country historically plagued by a conspicuous presence of mafia-type organizations. By using the exogenous credit contraction imposed by the 2007 financial crisis we highlight how the consequences for newly established enterprises have been less severe in areas with organized crime. Although criminal organizations are largely detrimental for local economic conditions, their economic activity might act as an economic stabilizer in the short-run, especially in a context of weak institutional presence. The investment in the legal economy allows criminal organizations to launder money, make profits, and raise social consensus through the provision of alternative sources of social insurance.JEL classification: K42, L26.

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The effects of public governance and national culture on money laundering: A structured equation modeling approach

Al-Qudah

Bani‐Mustafa

Nimer

et al. 2021

Journal of Public Affairs

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In this study, we investigate the role of public governance in mediating the impact of a country's culture on money laundering. We assess whether interference in the form of public governance can reduce or offset cultural effects with respect to the risks associated with money laundering across 92 countries over a 6‐year period (2012–2017).Design/methodology/approachThis research uses structural modeling to examine the direct path between culture and money laundering, and the indirect path between culture and money laundering that passes through public governance as a mediator. We use Hofstede's cultural variables as a proxy for measuring culture, and Worldwide Governance Indicators (WGIs) to measure public governance in different countries. The Basel anti‐money laundering index is also used as a proxy for measuring money laundering risk.FindingsOur results show that public governance fully mediates the relationship between culture and money laundering. The direct path shows a significant relationship between culture and money laundering, but this relationship becomes insignificant when public governance is introduced as a mediator.Originality/valueThis study indicates that governments can reduce money‐laundering risk by paying more attention to the quality of public governance and its potential as a tool in reducing money laundering.

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Organized crime and business subsidies: Where does the money go?

Cited by 239 publications

References 20 publications

An Empirical Analysis of the Public Spending Decomposition on Organized Crime

An Empirical Analysis of the Public Spending Decomposition on Organized Crime

'Mafia Inc.': When Godfathers Become Entrepreneurs

The effects of public governance and national culture on money laundering: A structured equation modeling approach

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