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

Abstract

This study explains the emergence of the Sicilian mafia in the XIX century as the product of the interaction between natural resource abundance and weak institutions. We advance the hypothesis that the mafia emerged after the collapse of the Bourbon Kingdom in a context characterized by a severe lack of state property-right enforcement in response to the rising demand for the protection of sulfur -Sicily's most valuable export commodity -whose demand in the international markets was soaring at the time. We test this hypothesis combining data on the early presence of the mafia and on the distribution of sulfur reserves across Sicilian municipalities and find evidence of a positive and significant effect of sulphur availability on mafia's diffusion. These results remain unchanged when including department fixed-effects and various geographical and historical controls, when controlling for spatial correlation, and when comparing pairs of neighboring municipalities with and without sulfur.

This Mine is Mine! How Minerals Fuel Conflicts in Africa

“…This is why we favor, in our baseline, specifications including the set of cells without mines, coding as zero the world price for these cells. Alternatively, we implement a neighbor-pair fixed effects methodology in the spirit of Acemoglu, García-Jimeno, and Robinson (2012) and Buonanno et. al (2015): equation (2) is estimated on the subsample of mining cells and their immediate neighboring cells without mines.…”

“…First, natural 3 Natural resources have also been found to empirically matter for homicides (Couttenier, Grosjean, and Sangnier forthcoming), for organized crime (Buonanno et al 2015), for interstate wars (Caselli, Morelli, and Rohner 2015), and for mass killings of civilians (Esteban, Morelli, and Rohner 2015). 4 See De Soysa (2002), Fearon and Laitin (2003), Ross (2004Ross ( , 2006, Fearon (2005), and Humphreys (2005) in the case of oil; Lujala, Gleditsch, and Gilmore (2005), Humphreys (2005), Ross, (2006), and Lujala (2010) focusing on diamonds; and Angrist and Kugler (2008) and Lujala (2009) on narcotics.…”

The Wild West IS Wild: The Homicide Resource Curse

“…All of these studies deal with contexts in which the state is weak or absent and conclude that natural resources lead to violence by organized groups such as warlords, drug gangs, or rebel groups. This violent curse is persistent, as suggested by Buonanno et al (2015) who report that the Sicilian Mafia originated from 19th century commodity price shocks.…”

Trust and in-group favoritism in a culture of crime

“…Sicily, like most of Southern Italy, consisted of clan-like communities whose low social capital developed through a history of occupation and poverty (Banfield, 1958;Putnam et al, 1994;Guiso et al, 2006). Unable to trust institutions or outsiders, Sicilians bought protection through association with local Mafia clans (Gambetta, 1993;Bandiera, 2003;Buonanno et al, 2012).…”