Origins of the Sicilian Mafia: The Market for Lemons
The Sicilian mafia is arguably one of the most infamous institutions in the Western world. After its first appearance in Sicily in the 1870s it soon infiltrated the economic and political spheres of Italy and of the United States and has, at times, been considered a serious threat to the rule of law in both countries. Although outcomes of the mafia’s actions such as murders, bombings, and embezzlement of public money have been observed during the last 140 years, the reasons behind its emergence are still obscure.
In a new article published in the Journal of Economic History, Dimico, Isopi and Olsson (2017) argue that the Sicilian mafia arose as a response to an exogenous shock in the demand for oranges and lemons, following Lind’s discovery in the late 18th century that citrus fruits cured scurvy. Given Sicily’s 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 harbours.
To test their hypothesis, the authors digitized data from the Damiani Inquiry (available from the Archive of State in Rome), a parliamentary inquiry conducted between 1881–1886. The Damiani Inquiry represents one of the earliest and most important primary sources about the economic and social conditions of Sicily in the 1880s and it was part of a larger inquiry, approved in March 1877, and proposed by Stefano Jacini, that aimed at assessing the conditions of the agricultural sector and the conditions of peasantry in every region of Italy after the independence of Italy. Using this data they show that mafia presence in the 1880s is strongly associated with the prevalence of citrus cultivation and no other crop or industry has a robust impact on mafia activity. As a robustness check, they also test the same hypothesis using additional data from 1900 (Cutrera 1900) and they find similar results.
Unlike existing works that emphasize political and historical factors, this study identifies the importance of an exogenous shock in the international demand (specifically lemons). The extraordinary revenues that certain producers received, combined with the general political insecurity and weak rule of law, provided an ideal breeding ground for the emergence of a mafia that provided protection and acted as intermediaries.
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by Arcangelo Dimico, Alessia Isopi and Ola Olsson