Mafia’s grip linked to increased poverty across southern Italy

• Organised crime responsible for 20% fall in regions’ economic output
• Five regions worst hit by criminal organisations are Italy’s poorest

Research has revealed the devastating effect that Mafia activity has had on Italy’s economy.

Paolo Pinotti, an economics professor in the department of policy analysis and public management at Bocconi University in Milan, has studied the effects of various Mafia organisations in the southern Italian regions of Puglia and Basilicata.

His research shows that, since the “mafia wars” of the mid-1970s, which saw an influx of criminal organisations such as the Mafia, Camorra and ‘Ndrangheta into the south-east of the country, the homicide rate quadrupled in the two regions while their growth rates fell from the highest in the country to the lowest.

Comparing Puglia and Basilicata with the other regions in southern Italy, Pinotti’s research, published in the August 2015 issue of the Economic Journal, calculates that organised crime was responsible for a 20% fall in their economic output, or GDP, between the mid-1970s and mid-2000s.

The regions’ marked decline underscores the debilitating impact of organised crime on a local economy. Until the beginning of the 1970s, Puglia and Basilicata represented the two success stories of southern Italy. They had low levels of crime, a relatively high level of economic development and the highest growth rate among all Italian regions.

However, as criminal gangs moved in, the homicide rate in Puglia and Basilicata jumped from one for every 100,000 inhabitants – comparable to the centre-north of Italy – to more than four homicides for every 100,000 inhabitants.

“Sluggish economic performance was triggered by a strong contraction of private investment in the wake of increasing violence,” Pinotti said. “Although private capital was gradually replaced by public investment, the latter was much less productive as criminal organisations distort and corrupt the public procurement process.”

Giovanni Falcone
The Italian anti-mafia prosecutor, Giovanni Falcone. Photograph: Associated Press

According to the Italian judge Giovanni Falcone, who led the “Maxi Trial” against the Sicilian Mafia in 1987 and was assassinated by the organisation, “more than one-fifth of Mafia profits come from public investment”.

Pinotti suggests that, as the presence of organised crime in Puglia and Basilicata is more recent and much less severe than in Sicily, Campania and Calabria, it was likely that the economic costs in these regions were even higher.

“Certainly, the five Italian regions with the highest presence of criminal organisations – Sicily, Campania, Calabria, Puglia and Basilicata – are also the poorest of the country,” Pinotti said.

Contributor

Jamie Doward

The GuardianTramp

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