There are a few academic papers on this topic (see here) but my interest is in the sheer inefficiency of gangster-like rule of a country. I have not read any of the scholarly accounts but have gleaned most of my insight from Peter Robb’s meandering Midnight in Sicily – it is one of the most entertaining and well-written treatments of the modern history of this region I have seen.
Interspersed with mouth-watering descriptions of Italian tucker is a rollicking good modern history of the region with an emphasis on the role of the Mafia.
This is a cruel organization that has penetrated the highest levels of Italian politics. But as an economist what struck me was the enormous social inefficiency of meeting a ‘property rights failure’ in western Sicily with rule by a mob of hoods which instituted killing as the punishment for rule-breaking. This sort of social history is the ultimate anti-libertarian tract since the overwhelming implication is that strong central government, based on western-style democratic values, vastly outperforms rule by a mob of hoods. Self-interest decidedly does not drive the social advantage.
Delayed and inefficient economic development, low productivity and a social culture based on fear are some of the worst implications of mob rule. It is both unfair to citizens subject to its rule but also grossly economically inefficient – even ignoring the transfers the society is impoverished by having a bunch of illiterate thugs running things. Social Darwinism fails.