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An Economic Analysis of the Mafia
David Maddison & Marilena Pollicino, World Economics, June 2003
This paper reviews the current economic thinking on the Mafia phenomenon. It distinguishes the Mafia from ordinary criminal gangs by the desire of the former for the exclusive right to commit criminal acts. The existence of the Mafia in particular locations at particular times is explained by the abdication of power or by the state’s unwitting creation of illegal markets. The Mafia’s involvement in the supply of illicit goods is due to its ability to prey on common criminals, while its involvement in the supply of legal goods is in order to police anti-competitive agreements amongst businessmen. Contrary to common belief, there may even be instances in which the Mafia promotes public welfare. More research is required to explain the continuing popularity of the Mafia and to identify the social costs that make it worthwhile tackling the Mafia.

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