Economic Origins of the Sicilian Mafia: A Simulation Feedback Model

Abstract

6.1 Introduction During the nineteenth century, Sicily underwent a series of political and land reforms that led to dismantling of large land ownership and culminated in the unification of the Italian state in 1861. In the new economic and political regime, banditry and a general sense of lawlessness proliferated (Del Monte and Pennacchio 2012). The Italian government proved ineffective at enforcing the rule of law on the island (Buonanno et al. 2015; Dimico et al. 2017; Acemoglu et al. 2020). In that environment, the mafia emerged as a private response to the inadequate protection by the state (Gambetta 1993). The mafia offered private protection from bandits to landowners who could not rely on protection and enforcement of property rights by the state (Blok 1969; Bandiera 2003). In many parts of the world, organized crime has acted as a parallel legal system, taking advantage of the high demand for protection and enforcement services during periods characterized by the absence of effective government institutions (Blok 1969; Skaperdas 2001). Research has documented similarities between organized crime syndicates in Sicily, Japan and Russia (Gambetta 1993; Bandiera 2003). As in Sicily, yakuza emerged in post-feudal Japan (Bandiera 2003; Milhaupt and West 2000). Based on extensive data, Milhaupt and West (2000) show that yakuza complemented inefficiencies in state legal and enforcement structures by providing contract enforcement and private property protection. Russian mafia emerged during the post-Communist transition of the 1990s when legal institutions required for the market economy were weak (Varese 1994). In interviews, small businesses in Russia indicated that they viewed mafia as a substitute to police protection and state-provided courts (Frye and Zhuravskaya 2001). * Cite as: Pavlov, O. V., & Sardell, J. M. (2021). Economic Origins of the Sicilian Mafia: A Simulation Feedback Model. In R. Y. Cavana, B. C. Dangerfield, O. V. Pavlov, M. J. Radzicki, & I. D. Wheat (Eds.), Feedback Economics: Economic Modeling with System Dynamics (pp. 137-161). New York: Springer