Capuano, Carlo and Purificato, Francesco (2012): The macroeconomic impact of organized crime: a neo-Kaleckian perspective.
Download (620Kb) | Preview
The paper analyzes how organized crime aﬀects the economy through its impact on the eﬀective demand, following the Neo-Kaleckian approach. From this perspective, the presence of organized crime, on the one hand, tends to reduce the eﬀective demand draining resources through extortion, bribery of public oﬃcials and encouraging consumption of criminal goods (illegal goods and goods produced in the underground economy), on the other hand, tends to increase the eﬀective demand using the proceeds of criminal activity in the purchase of legal consumption and investment goods. The model highlights the opposing action of these two forces and identiﬁes the conditions for a negative impact on the degree of capacity utilization and the growth rate. For the latter, these conditions tend to be more stringent, due to the direct impact of organized crime on investment decisions. Overall, the operation of organized crime tends to negatively inﬂuence the economic activity to the extent that the income drained from the legal sector is not reused into the same sector.
|Item Type:||MPRA Paper|
|Original Title:||The macroeconomic impact of organized crime: a neo-Kaleckian perspective|
|Keywords:||Neo-Kaleckian, macroeconomics, organized crime, illegal or illicit markets|
|Subjects:||E - Macroeconomics and Monetary Economics > E1 - General Aggregative Models > E12 - Keynes; Keynesian; Post-Keynesian
E - Macroeconomics and Monetary Economics > E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O17 - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
K - Law and Economics > K4 - Legal Procedure, the Legal System, and Illegal Behavior
|Depositing User:||Carlo Capuano|
|Date Deposited:||15. Jul 2012 20:24|
|Last Modified:||12. Feb 2013 14:39|
Acconcia, A. and C. Cantabene (2008): "A Big Push To Deter Corruption: Evidence From Italy", Giornale degli Economisti, GDE, Bocconi University, vol. 67(1), pp. 75-102.
Agarwal, J. D. and A. Agarwal (2006): "Money Laundering: New Forms of Crime, and Victimization", presented at the National Workshop on New Forms of Crime, and Victimization, with reference to Money Laundering, Indian Society of Victimology, Department of Criminology, University of Madras, India.
Anderson, D. A. (1999): "The aggregate burden of crime", Journal of Law and Economics, vol. 42, pp. 611--642.
Blecker, R.(2002): "Distribution, Demand and Growth in Neo-Kaleckian Macro-Models", in M. Setterfield (edited by), The economics of Demand-Led Growth, Edward Elgar, pp. 129-52.
Block, A.(1980): "East Side - West Side. Organizing Crime in New York 1930-1940", University College Cardiff Press, Cardiff.
Buonanno, P. D., Montolio and P. Vanin (2009): "Does Social Capital Reduce Crime?", Journal of Law and Economics, University of Chicago Press, vol. 52(1), pp. 145-170.
Centorrino, M. and F. Ofria (2008): "Criminalità organizzata e produttività del lavoro nel Mezzogiorno: un'applicazione del modello «Kaldor-Verdoorn»", Rivista Economica del Mezzogiorno, no. 1, pp. 163-189.
Centorrino, M. and G. Signorino (1993): "Criminalità e modelli di economia locale", in: Zamagni S., Mercati illegali e mafie -- L'economia del crimine organizzato, Bologna, Il Mulino.
Centorrino, M. and G. Signorino (1997): Macroeconomia della mafia, La Nuova Italia Scientifica, Roma.
Cressey, D. (1972): Criminal organizations: Its elementary forms. New York: Harper and Row.
Czabanski, J. (2008): Estimates of cost of crime: history, methodologies, and implications, Berlin, Springer.
Daniele, V. (2009): "Organized crime and regional development. A review of the Italian case", MPRA Paper no. 16547.
Daniele, V. and U. Marani (2008): "Criminalità e investimenti esteri. Un'analisi per le province italiane", Rivista Economica del Mezzogiorno, no. 1.
Del Monte, A and E. Papagni (2007): "The Determinants of Corruption in Italy: Regional Panel Data Analysis", European Journal of Political Economy, vol. 23, no. 2, pp. 379-396.
Detotto, C. and E. Otranto (2010): "Does Crime Affect Economic Growth?", KYKLOS, vol. 63, no. 3, pp. 330-345.
Felli, E. and G. Tria (2000): "Produttività e crimine organizzato: Un'analisi delle regioni italiane", Sviluppo economico, vol. 4, no. 1, pp. 79-101.
Fiorentini, G. (2000): "Organized crime and illegal markets" in B. Bouckaert e A. De Geest (edited by) "Encyclopedia of Law and Economics", Edward Elgar.
Finckenauer, J. (2005): "Problems of definition: what is organized Crime?", Trends in Organized Crime, vol. 8, no. 3, Spring 2005.
Gimenez-Salinas Framis, A. (2011): "Illegal Networks Or Criminal Organizations", http://www.erdr.org/textes/gimenez_salinas-framis.pdf.
Gambetta, D. (1993): `The Sicilian Mafia: The Business of Private Protection', Cambridge,Harvard University Press.
Hagan, F. (2006): "Organized Crime" and "organized crime": Indeterminate problems of definition, Trends in Organized Crime, vol. 9, no. 4.
Kaldor, N. (1966): "Marginal Productivity and the Macroeconomic Theories of Distribution: Comment on Samuelson and Modigliani", Review of Economic Studies, vol. 33, no. 4.
Konrad, K. and S. Skaperdas (1998): "Extortion", Economica, no. 65, pp. 461-477.
Kumar, V. and S. Skaperdas (2009): "Organized Crime", in Garoupa Nuno (edited by),Criminal Law and Economics, Edward Elgar.
Levitt, S.D. (2001): "Alternative Strategies for Identifying the Link Between Unemployment and Crime", Journal of Quantitative Criminology, vol. 17(Issue 4), pp. 377-390.
Masciandaro, D. (2007): "Money Laundering", in B. Lomborg (edited by), Solving the World's Problems: the Benefits and Costs, Cambridge University Press, Cambridge.
McIllwain, J.S. (1999): Organized Crime: A social network approach. Crime, Law and Social Change, 32, pp. 301-324.
Monzini, P. (1993): "L'estorsione nei mercati leciti e illeciti". Liuc Papers no. 1 - Serie Storia, impresa e società.
Morselli, C. (2008): Inside Criminal Networks. New York: Springer.
OECD (2002): "Measuring the Non-Observed Economy, A Handbook".
Paoli, L. (2002): "The paradoxes of organized crime", Crime, Law & Social Change, vol. 37(1), pp. 51-97.
Peri, G. (2004): "Socio-Cultural Variables and Economic Success: Evidence from Italian Provinces 1951-1991", Berkeley Electronic Journal, Topics in Macroeconomics, vol. 4, no. 1, article 12, September.
Pinotti, P. (2012): "The economic costs of organized crime: evidence from southern Italy", Temi di Discussione, Banca d'Italia, no. 868.
Rapporto SOS Imprese (2011): "Le mani della crimininalità sulle imprese", http://www.quaderniartigianato.com/wp-content/uploads/2011/05/03_Sos-impresa-Confesercenti_-Le-mani-della-criminalit%C3%A0..N.50.pdf.
Reuter, P. (1983): Disorganized Crime. The Economics of the Visible Hand, Cambridge: The MIT Press.
Reuter, P. (1985): "The Organization of Illegal Markets: An Economic Analysis", National Institute of Justice, Washinghton D.C..
Schelling, T. C. (1971), "What is the Business of organized crime?", Journal of Public Law, vol. 20, pp. 71-84. Sciarrone, R. (1998): "Mafie vecchie, mafie nuove. Radicamento ed espansione", Donzelli, Roma.
Skaperdas, S. (2001): "The political economy of organized crime: providing protection when the state does not", Economics of Governamce, vol. 2, pp. 173--202.
Spencer, J., K. Aromaa, M. Junninen, A. Markina, J. Saar and T. Vijanen, (2006): "Organized Crime, Corruption and the Movement of People across Borders in the New Enlarged EU: A Case Study of Estonia, Finland and the UK", HEUNI Report no. 69. Helsinki: HEUNI.
Transcrime (2009): "Study on Extortion Racketeering the Need for an Instrument to Combat Activities of Organized Crime", Final Report prepared for The European Commission, Bruxel.
Walker, J (2007): "Measuring Global Money Laundering", Paper presented at the conference `Tackling Money Laundering', University of Utrecht, Utrecht, Netherlands, November 2007.