The effects of mafia infiltration on public procurement performance

Ravenda, Diego; Giuranno, Michele G.; Valencia‐Silva, Maika M.; Argilés‐Bosch, Josep M.; García-Blandón, Josep

doi:10.1016/j.ejpoleco.2020.101923

Cited by 19 publications

(9 citation statements)

References 44 publications

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“…3 This empirical set-up uniquely gives us a set of proven positive and negative cases to train our models on. Our approach differs from previous studies that took proven cases of mafia infiltration and contrasted them with the rest of the sample assuming that there is no mafia infiltration in unknown cases (Ravenda et al, 2020). This is an assumption that we deliberately depart from and use a set of proven non-infiltrated cases instead.…”

Section: Methods and Causal Identificationmentioning

confidence: 99%

“…A growing literature is scrutinizing their governance functions (Lessing, 2020), shedding lights on a variety of organizations, operating both in illegal and legal markets of various countries, including Mexico (Morris, 2013), Brazil (Lessing & Willis, 2019; Magaloni et al, 2020), Honduras (Berg & Carranza, 2018), and even in established democracies, such as Japan (Hill, 2003) and Italy (Catino, 2019; Gambetta, 1993). More specifically, their presence in the legitimate economy and in the public sector can deeply affect corruption and cartels formation in public procurement (Caneppele et al, 2009; Gambetta & Reuter, 1995; Montani, 2013; Ravenda et al, 2020).…”

Section: The Governance Of Cartels and Bribes: Egos As An Enabler Of ...mentioning

confidence: 99%

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The extra‐legal governance of corruption: Tracing the organization of corruption in public procurement

2021

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This article traces the organization of corruption in public procurement, by theoretically and empirically assessing the contribution of extra‐legal governance organizations (EGO) to supporting it. Theoretically, we explore the governance role played by organized criminal groups in corruption networks, facilitating corrupt transactions by lowering search costs, bargaining costs, and enforcement cots. Empirically, the analysis exploits a rare empirical setup of proven cases of both EGO presence and absence in contract awards by Italian municipalities. We use traditional regression and supervised machine‐learning methods for identifying and validating proxy indicators for EGO presence in public procurement such as single bidding or municipal spending concentration. Internal validity of our models is very high, 85% of unseen contracts are correctly classified. External validity is moderate, our predicted EGO presence score correlates with established indicators of organized criminality across the whole of Italy and Europe with a linear correlation coefficient of about 0.4.

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Section: Methods and Causal Identificationmentioning

confidence: 99%

Section: The Governance Of Cartels and Bribes: Egos As An Enabler Of ...mentioning

confidence: 99%

The extra‐legal governance of corruption: Tracing the organization of corruption in public procurement

2021

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“…infiltration of organized crime (Ravenda et al 2020). Such differences depend on the quality of institutions, thus when the spending allocation among levels of governments change also the costs of public good provision change.…”

Section: The Economymentioning

confidence: 99%

Asymmetric decentralization: distortions and opportunities

2020

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This paper studies the interplay between central and local governments in defining the optimal degree of decentralization in terms of public goods supply. The choice between full centralization and asymmetric decentralization implies a trade-off between the possibility to provide public goods at a lower cost, wherever this is possible by decentralizing, and the possibility to fully internalize spillovers by full centralization. We find that asymmetric decentralization introduces distortions into the public decision-making process. We also demonstrate that the power to interfere in the central government’s ruling mechanisms should be reduced for the jurisdictions that have decentralized, in order to make their decentralization choice convenient even for the citizens in the less efficient jurisdictions. Finally, we find the conditions under which asymmetric decentralization can be simultaneously advantageous for both rich and poor regions through the design of appropriate equalization transfers.

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“…Several studies and police investigations (Scaglione, 2016;Scognamiglio, 2018;Ravenda et al, 2020 andEuropol, 2013) have documented that ma a clans in Italy have been massively involved in money laundering, entering markets such as public/private construction, waste disposal, leisure industries, the renewable energy sector and many other kinds of businesses. Reganati and Oliva (2018), in their empirical study on Italian regions between 2008 and 2013, show that the incidence of ma a is one of the main determinants of money laundering.…”

Section: Introductionmentioning

confidence: 99%