Organized crime and labour productivity in the Mezzogiorno: an application of the "Kaldor-Verdoorn" model

Abstract

This paper verifies if the organised (camorra, and corona unita) has had a negative impact on the growth rate of labour productivity in Italian Regions mostly affected by such criminal phenomena (Calabria, Campania, Puglia and Sicily), during the period 1983-2005. The originality of this study, in comparison with previous ones on this subject, is the insertion of a proxy on criminal phenomena (that is the ratio between the homicide committed by mafia, camorra, cosa nostra, 'ndrangheta and sacra corona unita and the number of inhabitants in a particular Region) within the known model Kaldor-Verdoor that combines the growth rate of labour productivity and other economic variables. The econometric results regarding Southern Regions prove the negative effect of the variable crime on the growth rate of labour productivity, particularly in non-tradable sectors. It confirms the need of specific State policies in order to sustain the growth of labour productivity in the Mezzogiorno and to oppose the criminal phenomenon that hinders it.