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.