Economic Structure and Vulnerability to Organised Crime: Evidence from Sicily

Abstract

The economic analysis of organised crime suggests that some economic activities are particularly vulnerable to penetration by criminal organisations. This paper provides an analysis of the structure of the Sicilian economy and shows that, when compared with other Italian regions, it is characterised by a disproportionate presence of such activities. In particular, the economy of Sicily appears characterised by: (i) a large dimension of traditional sectors, such as the Construction sector, which also has a strong territorial specificity; (ii) a large presence of small firms; (iii) a low level of technology; (iii) a large public sector. The joint presence of these features creates fertile soil for the typical activities of organised crime, such as extortion and cartel enforcement. Hence, we propose an alternative explanation of the persistence of organised crime with respect to explanations based on cultural and social factors.