Poor institutions, rich mines: Resource curse in the origins of the Sicilian mafia. Economic Journal, forthcoming

Under weak law-enforcement institutions a positive shock to the value of natural resources can increase demand for private protection and opportunities for rent appropriation through extortion, favoring the emergence of mafia-type organi-zations specialized in such activities. We test this hypothesis by investigating mafia’s emergence in XIX century Sicilian municipalities, where a severe lack of state property-right enforcement coincided with a steep rise in international demand for sulfur, Sicily’s most valuable export commodity. We find robust ev-idence of higher early mafia activity in municipalities with greater sulfur avail-ability. Other proposed drivers of mafia’s origins are neither clearly identifiable nor statistically relevant