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Poor Institutions, Rich Mines: Resource Curse and the Origins of the Sicilian Mafia

This study explains the emergence of the Sicilian mafia in the XIX century as the
product of the interaction between natural resource abundance and weak institutions. We advance
the hypothesis that the mafia emerged after the collapse of the Bourbon Kingdom in a context
characterized by a severe lack of state property-right enforcement in response to the rising demand
for the protection of sulfur - Sicily's most valuable export commodity - whose demand in the
international markets was soaring at the time. We test this hypothesis combining data on the early
presence of the mafia and on the distribution of sulfur reserves across Sicilian municipalities and
find evidence of a positive and significant effect of sulphur availability on mafia's diffusion. These
results remain unchanged when including department fixed-effects and various geographical and
historical controls, when controlling for spatial correlation, and when comparing pairs of
neighboring municipalities with and without sulfur.