A well known characteristic of Italy is the deep gap in the economic development between the North and the South, but there is also a huge difference in the quality of social capital, so that the culture of illegality is much more present in some of southern regions, where organised crime is particularly strong. The first part of this paper describes the main differences among the most important criminal organizations of Southern Italy. The second part examines the major effects of organised crime in the economy of Mezzogiorno. In addition to a description of the link between the presence of mafia and the economic underdevelopment, that has been already discussed in other researches, this study focuses on local public service costs in some southern municipalities where the work of mafia is more pervasive. The econometric analyses confirms the hypothesis that the presence of mafia can be the cause of higher costs, especially in funeral transports and in the collection and disposal of waste material.
Jel Code: L99, O18