The Political Economy of Criminal Capturing

• In Event: Crime and Organized Crime

Abstract

Organized crime groups seek to cultivate a close connection to the political world to distort public policies to their advantage and re-direct public resources to sectors of strategic interest for them. However, when and how criminal organizations seek to capture politicians? We study this question in the context of Italian municipalities and we show that criminal decisions are driven by variation in economic benefits that criminal organizations can expect to extract following the infiltration. We provide a theoretical framework of our intuition which we then test empirically by measuring shocks in economic benefits with earthquakes episode at the municipal levels. Difference in differences estimate reveal that shocks in economic opportunity do not just affect the criminal attempts to capture politicians but also the timing and the typology of violence that they put in place.

Authors

• Livio Di Lonardo, Bocconi University

• Nicola Mastrorocco, London School of Economics