Organised crime infiltration in the legitimate private economy - An empirical network analysis approach

It is estimated that Italian Mafias registered €135 billion in profits only in 2010 (SOS Impresa, 2010). Part of this huge amount of money – coming mostly from the drugs, prostitution and arms illicit markets – is often used to invest into the legitimate private economy. At the end of 2011, for instance, several former members of the Camorra – an organised crime group1 based in Naples, Italy – confessed that the great majority of firms dealing with major economic transactions in their territory of influence is either directly or indirectly connected to the Mafioso group (Iurillo, 2011). As a consequence, the affected economy destabilises, becomes entrenched with violent forms of competition and is bound to stagnation. Such phenomena are observable also in the Italian regions of Apulia and Basilicata, where Mafioso activity represents an economic shock that diminishes the expected GDP per capita by 16% on average, according to a recent econometric study by the Bank of Italy (Pinotti, 2012).