Organized crime and corruption: a theoretical and empirical analysis

Nowadays a large part of academic literature and international organizations largely and increasingly recognize that corruption acts as a major impediment to growth. However, there are still some doubts and large room to further investigate the economic consequences of corruption. Very recently, the most important international agency focused on fighting corruption (Transparency International) has underlined the importance to better understand the links between corruption and organized crime and their combined effects on economic growth. The purpose of our research is to further investigate these issues, both theoretically and empirically. More precisely, thinking about the phenomena of corruption and organized crime, the questions we try to answer through our research are: i) is there some relationship between the two phenomena? ii) if yes, can we explain this relationship using a theoretical model? iii) can we find appropriate proxies and indexes of organized crime and corruption in order to empirically test the theoretical model described in point ii)? and moreover: iv) is there some possibility to solve the doubts about the economic effects of corruption taking into account the relationship between the two phenomena? These are the main questions which lead our research and that we try to answer in this dissertation. Clearly, in order to better understand these questions and related answers, a detailed literature review of theoretical and empirical studies on corruption, crime and organized crime will be presented (Chapter 1). Then, we develop a simple theoretical framework which analyses the effects of the two phenomena on the economy and empirically test the effects of the two illegal activities on the economic growth of Italian regions (Chapter 2 and Chapter 3 respectively).