May 15, 2012

The economic cost of organized crime

The graph below is from a fascinating paper by Paolo Pinotti, the full titles is: "The economic costs of organized crime: evidence from southern Italy" (April 2012):

The author explains:
This graph shows the relationship between organized crime and GDP per capita across Italian regions. Bold triangles denote regions with a historical presence of mafia organizations, hollow triangles denote regions with a more recent presence while circles denote all other regions.
Another illustrative graph - mafia allegations vs homicide rate:

Another one: 

The graph compares the time series of GDP per capita in Apulia and Basilicata (“actual with mafia”) and in a synthetic control that is a weighted average of the other Italian regions excluding those with a historical presence of mafia-type organizations (Sicily, Campania and Calabria) . . .
The author concludes:
The results suggest that the aggregate loss implied by the presence of organized crime amounts to a significant reduction of GDP per capita and goes mainly through a reallocation from private economic activity to (less productive) public investment.

I find this map intriguing:

Why is this map intriguing? Contrast it with the map below:
Map of civic capital:

There is an obvious negative geographic relationship between organized crime activity and measures of civic capital, which is not taken into consideration in Pinotti's paper.  

No comments:

Post a Comment