Lemons and the Origins of the Sicilian Mafia

This is in the Journal of Economic History:

In this article, we study the rise of the Sicilian mafia using a unique dataset from the end of the nineteenth century. The main hypothesis is that the growth and consolidation of the Sicilian mafia is strongly associated with an exogenous shock in the demand for lemons after 1800, driven by James Lind’s discovery on the effective use of citrus fruits in curing scurvy. Given Sicily’s already dominant position in the international market for citrus fruits, the increase in demand resulted in a very large inflow of revenues to citrus-producing towns during the 1800s. Citrus trees can be cultivated only in areas that meet specific requirements (such as mild and constant temperature throughout the year and abundance of water) guaranteeing substantial profits to relatively few local producers. The combination of high profits, a weak rule of law, a low level of interpersonal trust, and a high level of local poverty made lemon producers a suitable target for predation. Neither the Bourbon regime (1816–1860), nor the newly formed government after Italian independence in 1861 had the strength or the means to effectively enforce private property rights. Lemon producers, therefore, resorted to hiring mafia affiliates for private protection and to act as intermediaries between the retailers and exporters in the harbors

The bigger lesson here is that the presence of wealth in a context of weak organizations (including firms, social organizations/networks, states, etc) is likely to result in the emergence of sub-optimal forms of property rights protection (which, of course, is one of the core claims of the resource curse literature).

Gambeta’s book on the mafia is a classic. From what I remember Gambetta has some great sociological and economic analyses of the mafia’s private protection racket.

Read the whole paper here.

Where do robbers choose to locate?

Rob thy neighbor appears to be the decision rule for robbers, at least in Chicago. Bernasco, Block and Ruiter, writing in the January 2013 issue of the Journal of Economic Geography, present research on robbers’ choice of crime sites:

“This article analyzes how street robbers decide on where to attack their victims. Using data on nearly 13,000 robberies, on the approximately 18,000 offenders involved in these robberies, and on the nearly 25,000 census blocks in the city of Chicago, we utilize the discrete choice framework to assess which criteria motivate the location decisions of street robbers. We demonstrate that they attack near their own homes, on easily accessible blocks, where legal and illegal cash economies are present, and that these effects spill over to adjacent blocks.”

The graph below (on p. 129 in the paper) illustrates robbers’ tendency to carry out their activities closest to where they live (for reasons why see the paper).

crime location

crime frequency and distance from robber residence

The findings are at once obvious and insightful. The insightful bit is that because of the geographic concentration of crimes and criminals, sometimes it might make more sense from the point of view of authorities to just focus on containing criminal activity within specific neighborhoods, leading to further entrenchment of a culture of crime in those neighborhoods.

If you notice,  in most places – including Nairobi – certain types of crime only get reported when they cross these implicit barriers. Otherwise, crime in bad neighborhoods becomes a case of if a tree falls in the forest.