Weak States: Causes and Consequences of the Sicilian Mafia

Working Paper: CEPR ID: DP12530

Authors: Daron Acemoglu; Giacomo De Luca; Giuseppe De Feo

Abstract: We document that the spread of the Mafia in Sicily at the end of the 19th century was in part shapedby the rise of socialist Peasant Fasci organizations. In an environment with weak state presence, thissocialist threat triggered landholders, estate managers and local politicians to turn to the Mafia to resistand combat peasant demands. We show that the location of the Peasant Fasci is significantly affected byan exceptionally severe drought in 1893, and using information on rainfall, we establish the causal effectof the Peasant Fasci on the location of the Mafia in 1900. We provide extensive evidence that rainfallbefore and after this critical period has no effect on the spread of the Mafia or various economic andpolitical outcomes. In the second part of the paper, we use the source of variation in the location of theMafia in 1900 to estimate its medium-term and long-term effects. We find significant and quantitativelylarge negative impacts of the Mafia on literacy and various public goods in the 1910s and 20s. We alsoshow a sizable impact of the Mafia on political competition, which could be one of the channels viawhich it affected local economic outcomes. We document negative effects of the Mafia on longer-termoutcomes (in the 1960s, 70s and 80s) as well, but these are in general weaker and often only marginallysignificant. One exception is its persistent and strong impact on political competition.

Keywords: criminal organizations; economic development; mafia; political competition; weak states

JEL Codes: P16; K42; H11; H75

Causal Claims

Cause	Effect
Mafia presence (K42)	Decrease in local economic outcomes (literacy rates, public goods provision) (H75)
Severe drought of 1893 (N52)	Increase in presence of peasant fasci organizations (B24)
Increase in presence of peasant fasci organizations (B24)	Increase in mafia presence (K42)