Measuring the presence of organized crime across Italian provinces: a sensitivity analysis
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Measuring the presence of organized crime across Italian provinces: a sensitivity analysis Giovanni Bernardo1 · Irene Brunetti2 · Mehmet Pinar3 · Thanasis Stengos4 Accepted: 17 November 2020 © The Author(s) 2020
Abstract The existing literature identifies different indicators to construct organized crime indices and places equal importance to different concepts of organized crime. This paper examines the sensitivity of organized crime across Italian provinces when different set of indicators and weights are used to combine crime indicators. Our findings suggest that there is a remarkable variation in the distribution of organized crime across Italian provinces based on the choice of indicators and the importance given to different crime indicators. It is also found that the relationship of organized crime with socioeconomic and political factors varies depending on the normative choices made in the construction of an organized crime index. Keywords Organized crime · Composite index · Italian provinces · Mafia · Stochastic dominance JEL Classification C12 · C14 · C15 · K49 · R58
* Mehmet Pinar [email protected] Giovanni Bernardo [email protected] Irene Brunetti [email protected] Thanasis Stengos [email protected] 1
Department of Law, University of Palermo, Palermo, Italy
2
National Institute for Public Policies Analysis, Rome, Italy
3
Business School, Edge Hill University, Ormskirk, Lancashire, UK
4
Department of Economics and Finance, University of Guelph, Guelph, Canada
13
Vol.:(0123456789)
European Journal of Law and Economics
1 Introduction Considering the interdependent links between organized crime and the political and socio-economic settings, the economic analysis of crime has grown to become an important research agenda (Gonzalez-Ruiz and Buscaglia 2002; Pinotti 2020). Organized crime has, in fact, extensive economic consequences: in the short term, violence and predatory activities destroy part of the physical and human capital stock; in the long run, the presence of criminal organizations increases the riskiness and uncertainty of the business environment, which ultimately lowers the growth potential of the economy (Pinotti 2015a, b). From a theoretical point of view, only a limited number of research papers examined the economics of organized crime. Becker’s (1968) pioneering article shows that even individuals involved in illegal or criminal activities behave rationally. The idea of Becker’s model is that a rational offender faces a gamble: the individual rationally decides whether or not to commit a crime by comparing benefits and costs of crime with those of alternative (legitimate) activities. Consequently, if the government enhances the probability and severity of punishment, crime becomes less attractive. The economic literature has also stressed welfare comparisons between monopoly and competitive supply of illegal activities. Buchanan (1973) argues that monopoly in the supply of illegal activities is socially desirable because of the output restrict
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