<p><strong>There is an extensive literature about the relationships between organized crime and economic activity in Italy.</strong></p>
<p>I’m not sure to understand what you precisely refer to when you say</p>
<blockquote>
<p>I'm looking for some <em>net effect</em></p>
</blockquote>
<p>because the impact of organized crime can be analyzed in several respects, from a  regional and territorial  point of view, or by sector of economic activity, or for its impact on the distribution of income, or on investment, or from a microeconomic point of view, and so on.</p>
<p>But I suppose that you are referring first of all to <strong>a macroeconomic point of view,</strong> that is the impact of organized crime <strong>on the level of PIL and on economic growth</strong>.</p>
<p><strong>It must be said that there aren’t  conclusive  statements  about this impact,</strong> because of  many difficulties linked also to the lack of reliable data.</p>
<p><span class="math-container">$\;$</span></p>
<p>The first source to look at when investigating an aspect of Italy's economy is, of course, the publications by the <strong>Banca d'Italia</strong> (the Italian Central Bank) and its research center, which is the most authoritative non-academic research center in Italy.<span class="math-container">$^1$</span></p>
<p><strong>A recent paper by Banca d’Italia</strong> deals with the impact of organized crime on economy:</p>
<p><a href="https://www.bancaditalia.it/pubblicazioni/qef/2021-0661/QEF_661_21.pdf" rel="nofollow noreferrer">Mocetti S., Rizzica L., <em>La criminalità organizzata in Italia: un'analisi economica</em> (Organized Crime in Italy: an Economic Analysis), Questioni di economia e finanza, Banca d’Italia, 2021</a></p>
<p>The abstract:</p>
<blockquote>
<p>Organized crime affects the social and economic development of the
territories where it is rooted through several channels. Therefore,
it is difficult to analyze these effects, also because of the
impossibility to observe and measure for certain the presence of
Mafia. […] this paper (i) analyzes the territorial diffusion of
organized crime in Italy; (ii) describes the contexts that  could have
favored the origin and diffusion of mafias beyond traditional
boundaries; (iii) examines the impact on economic growth and the
different channels through which these effects occur .(<em>my
translation</em>).</p>
</blockquote>
<p><strong>A recent study has been made by Cgia Mestre</strong> ((Italian Association of Artisans and Small Companies):</p>
<p>The picture that emerges from this study by<a href="https://www.cgiamestre.com/la-mafia-spa-fattura-40-miliardi-lanno/" rel="nofollow noreferrer"> Cgia di Mestre </a>
estimates  at 40 billions of euros  the volume of transactions of organized crime – that is 2% Italian  PIL.</p>
<p><span class="math-container">$$\qquad$$</span></p>
<p><strong>Below a recent book about the impact of criminality on economic activity:</strong></p>
<p><a href="https://www.giappichelli.it/media/catalog/product/excerpt/9788892134683.pdf" rel="nofollow noreferrer">Patalano R., Capitalismo criminale. Analisi economica del crimine organizzato, Giappicchelli,  2020</a><span class="math-container">$^2$</span></p>
<p><span class="math-container">$$\;$$</span></p>
<p>In the previous papers and book  you can find a vast bibliography  from both a theoretical and empirical point of view about the overall effects of organized crime on economic activity.</p>
<p><span class="math-container">$$***$$</span></p>
<p><strong>For  more specific or sectorial impacts of organized crime,</strong> there are many aspects that have been analyzed:</p>
<p><strong>An overview can be found in the introduction to a special number of the journal <a href="https://www.researchgate.net/publication/330934046_Economia_e_criminalita_in_Italia_Un%27introduzione" rel="nofollow noreferrer">Moneta e Credito about economy and criminality  in Italy (December 2018)</a></strong></p>
<p>From the abstract :</p>
<blockquote>
<p>The study of criminal behavior from the point of view of economics is
mostly brought back to the canon of rationality. In this introduction
to the special issue on crime and economy, we explain why it can be
appropriate to move away from the extremely widespread vision that
leads criminal actions to the microeconomic approach and, in
particular, to the logic of business choices, to assume the point of
view of those who choose to study crime as a governance structure. In
particular, it is important to recognize that the activities of
criminal organizations which have the main economic and political
repercussions always take on an international dimension. This is an
extremely important issue for economic policy in Europe.</p>
</blockquote>
<p>Abot the <strong>impact on productivity</strong>:</p>
<p>Albanese G. e Marinelli G. (2013), “Organized Crime and Productivity: Evidence from Firm-Level Data”, Rivista
italiana degli economisti, 18 (3), pp. 367-394.</p>
<p>About the <strong>impact on environment</strong>:</p>
<p>Pergolizzi A. (2018), “L’economia avvelenata del crimine ambientale”, Moneta e Credito, 71 (284), pp. 337-353. <span class="math-container">$^3$</span></p>
<p>The following  is an article on lavoce.info, a well-known online economic journal, about the infiltration of the mafia in the sector of wind energy, after the Green Deal:</p>
<p><a href="https://lavoce.info/archives/89363/sugli-incentivi-alleolico-il-vento-delle-infiltrazioni-mafiose/" rel="nofollow noreferrer"><em>Sugli incentivi all’eolico il vento dell’infiltrazione mafiosa</em></a><span class="math-container">$^4$</span></p>
<p>About the <strong>impact on income distribution</strong>:</p>
<p>Clementi F. e Valentini E. (2018), “Economia irregolare, criminalità e diseguaglianza dei redditi: un circolo vizioso?”,
Moneta e Credito, 71 (284), pp. 283-296.<span class="math-container">$^5$</span></p>
<p>About <strong>the impact on foreign investments</strong>:</p>
<p><a href="https://econpapers.repec.org/article/eeepoleco/v_3a27_3ay_3a2011_3ai_3a1_3ap_3a132-142.htm" rel="nofollow noreferrer">Daniele V. e Marani U. (2011), <em>Organized Crime, the Quality of Local Institutions and FDI in Italy: A Panel Data
Analysis</em>, European Journal of Political Economy, 27 (1), pp. 132-142.</a></p>
<p>Abstract:</p>
<blockquote>
<p>This paper examines the impact of crime on foreign direct investment
(FDI) inflows in the Italian provinces. The incidence of organized
crime is measured by the number of complaints regarding criminal
offences of different kinds traditionally related to the mafia
organizations. The results show how the correlation between organized
crime and FDI is both negative and significant, even when an indicator
of financial incentives for investment is included in the regressions.
Our analysis shows that crime represents a deterrent for foreign
investors, suggesting that high levels of (certain) crimes may be
perceived as a signal of a local socio-institutional environment
unfavorable for FDI.</p>
</blockquote>
<p><span class="math-container">$\;$</span></p>
<p>Other information and data can be found in this <a href="https://www.econopoly.ilsole24ore.com/2018/06/22/mafia-impresa-criminalita/" rel="nofollow noreferrer"><strong>recent article on Sole24ore</strong></a>, the most important Italian economic newspaper, which is a reliable source to be consulted when inquiring about Italian economy.</p>
<hr />
<p><span class="math-container">$^1$</span> <sup> Forgive me if I say some obvious things, but I write also for possible readers who don't know Italy's institutions  and Italian economy.</sup></p>
<p><span class="math-container">$^2$</span> <sup><em>Criminal Capitalism: an Economic Analysis of Organized Crime</em>.</sup></p>
<p><span class="math-container">$^3$</span> <sup><em>The  Poisoned Economy of Environmental Crime.</em></sup></p>
<p><span class="math-container">$^4$</span> <sup><em>The wind of Mafia Infiltration over the Incentives for Wind Power.</em></sup></p>
<p><span class="math-container">$^5$</span> <sup>  <em>Illegal Economy, criminality and income inequality: a Vicious Circle?</em></sup></p>

CC BY-SA 4.0
2023-10-20T15:59:24.207Z
2023-10-22T14:31:18.480Z
2023-10-22T14:31:18.480Z
BakerStreet
<p>In connection to this <a href="https://economics.stackexchange.com/questions/56637/how-is-italy-so-rich-given-its-high-corruption-and-crime/56639#56639">question</a> are there any empirical estimates of the effect of organized crime on economy of Italy? I am looking for some net effect.</p>

<macroeconomics><reference-request><italy>
What is the net effect of organized crime on the economy of Italy?
Lorenzo Pozzi
# What is the net effect of organized crime on the economy of Italy?

(Asked by: username_0 on 2023-10-17)

In connection to this [question](https://economics.stackexchange.com/questions/56637/how-is-italy-so-rich-given-its-high-corruption-and-crime/56639#56639) are there any empirical estimates of the effect of organized crime on economy of Italy? I am looking for some net effect.

**Tags:** macroeconomics, reference-request, italy


---

## 1 answers

### Answer by username_1 on 2023-10-20. Score: 6 | Accepted answer

**There is an extensive literature about the relationships between organized crime and economic activity in Italy.**

I’m not sure to understand what you precisely refer to when you say

> I'm looking for some *net effect*

because the impact of organized crime can be analyzed in several respects, from a regional and territorial point of view, or by sector of economic activity, or for its impact on the distribution of income, or on investment, or from a microeconomic point of view, and so on.

But I suppose that you are referring first of all to **a macroeconomic point of view,** that is the impact of organized crime **on the level of PIL and on economic growth**.

**It must be said that there aren’t conclusive statements about this impact,** because of many difficulties linked also to the lack of reliable data.

$\;$

The first source to look at when investigating an aspect of Italy's economy is, of course, the publications by the **Banca d'Italia** (the Italian Central Bank) and its research center, which is the most authoritative non-academic research center in Italy.$^1$

**A recent paper by Banca d’Italia** deals with the impact of organized crime on economy:

[Mocetti S., Rizzica L., *La criminalità organizzata in Italia: un'analisi economica* (Organized Crime in Italy: an Economic Analysis), Questioni di economia e finanza, Banca d’Italia, 2021](https://www.bancaditalia.it/pubblicazioni/qef/2021-0661/QEF_661_21.pdf)

The abstract:

> Organized crime affects the social and economic development of the
> territories where it is rooted through several channels. Therefore,
> it is difficult to analyze these effects, also because of the
> impossibility to observe and measure for certain the presence of
> Mafia. […] this paper (i) analyzes the territorial diffusion of
> organized crime in Italy; (ii) describes the contexts that could have
> favored the origin and diffusion of mafias beyond traditional
> boundaries; (iii) examines the impact on economic growth and the
> different channels through which these effects occur .(*my
> translation*).

**A recent study has been made by Cgia Mestre** ((Italian Association of Artisans and Small Companies):

The picture that emerges from this study by [Cgia di Mestre](https://www.cgiamestre.com/la-mafia-spa-fattura-40-miliardi-lanno/) 
estimates at 40 billions of euros the volume of transactions of organized crime – that is 2% Italian PIL.

$$\qquad$$

**Below a recent book about the impact of criminality on economic activity:**

[Patalano R., Capitalismo criminale. Analisi economica del crimine organizzato, Giappicchelli, 2020](https://www.giappichelli.it/media/catalog/product/excerpt/9788892134683.pdf)$^2$

$$\;$$

In the previous papers and book you can find a vast bibliography from both a theoretical and empirical point of view about the overall effects of organized crime on economic activity.

$$\*\*\*$$

**For more specific or sectorial impacts of organized crime,** there are many aspects that have been analyzed:

**An overview can be found in the introduction to a special number of the journal [Moneta e Credito about economy and criminality in Italy (December 2018)](https://www.researchgate.net/publication/330934046_Economia_e_criminalita_in_Italia_Un%27introduzione)**

From the abstract :

> The study of criminal behavior from the point of view of economics is
> mostly brought back to the canon of rationality. In this introduction
> to the special issue on crime and economy, we explain why it can be
> appropriate to move away from the extremely widespread vision that
> leads criminal actions to the microeconomic approach and, in
> particular, to the logic of business choices, to assume the point of
> view of those who choose to study crime as a governance structure. In
> particular, it is important to recognize that the activities of
> criminal organizations which have the main economic and political
> repercussions always take on an international dimension. This is an
> extremely important issue for economic policy in Europe.

Abot the **impact on productivity**:

Albanese G. e Marinelli G. (2013), “Organized Crime and Productivity: Evidence from Firm-Level Data”, Rivista
italiana degli economisti, 18 (3), pp. 367-394.

About the **impact on environment**:

Pergolizzi A. (2018), “L’economia avvelenata del crimine ambientale”, Moneta e Credito, 71 (284), pp. 337-353. $^3$

The following is an article on lavoce.info, a well-known online economic journal, about the infiltration of the mafia in the sector of wind energy, after the Green Deal:

[*Sugli incentivi all’eolico il vento dell’infiltrazione mafiosa*](https://lavoce.info/archives/89363/sugli-incentivi-alleolico-il-vento-delle-infiltrazioni-mafiose/)$^4$

About the **impact on income distribution**:

Clementi F. e Valentini E. (2018), “Economia irregolare, criminalità e diseguaglianza dei redditi: un circolo vizioso?”,
Moneta e Credito, 71 (284), pp. 283-296.$^5$

About **the impact on foreign investments**:

[Daniele V. e Marani U. (2011), *Organized Crime, the Quality of Local Institutions and FDI in Italy: A Panel Data
Analysis*, European Journal of Political Economy, 27 (1), pp. 132-142.](https://econpapers.repec.org/article/eeepoleco/v_3a27_3ay_3a2011_3ai_3a1_3ap_3a132-142.htm)

Abstract:

> This paper examines the impact of crime on foreign direct investment
> (FDI) inflows in the Italian provinces. The incidence of organized
> crime is measured by the number of complaints regarding criminal
> offences of different kinds traditionally related to the mafia
> organizations. The results show how the correlation between organized
> crime and FDI is both negative and significant, even when an indicator
> of financial incentives for investment is included in the regressions.
> Our analysis shows that crime represents a deterrent for foreign
> investors, suggesting that high levels of (certain) crimes may be
> perceived as a signal of a local socio-institutional environment
> unfavorable for FDI.

$\;$

Other information and data can be found in this [**recent article on Sole24ore**](https://www.econopoly.ilsole24ore.com/2018/06/22/mafia-impresa-criminalita/), the most important Italian economic newspaper, which is a reliable source to be consulted when inquiring about Italian economy.

---

$^1$  Forgive me if I say some obvious things, but I write also for possible readers who don't know Italy's institutions and Italian economy.

$^2$ *Criminal Capitalism: an Economic Analysis of Organized Crime*.

$^3$ *The Poisoned Economy of Environmental Crime.*

$^4$ *The wind of Mafia Infiltration over the Incentives for Wind Power.*

$^5$  *Illegal Economy, criminality and income inequality: a Vicious Circle?*


---

