Organized Crime Groups in Italy - Essay Example

? SICILIAN MAFIA: ORGANIZED CRIME GROUPS IN ITALY Introduction Italy has many ongoing criminal activities because of the formation of several crime mafias. The concept of mafia basically originated in the 18th century. Since then, these mafia groups have deteriorated the social and economic life of Italy and have affected the entire world as well. Many groups have been formulated in Italy, which are very notorious and popular because of their deadly criminal activities. Sicilian Mafia (Cosa Nostra) is among the highly dangerous organized criminal groups of Italy. This research paper will discuss regarding the background, history, and formation, past and present criminal activities of the Sicilian Mafia. It will highlight how it has impacted the social and economic life of the people in the world and which policies have been made by the authorities to restrict the mafia from affecting the lives of the people. Whether there has been any restriction policy on this major mafia group or not is another big question which will be answered by this research paper (Sinai, 2007). The paper will start with background information following the related theories regarding the Sicilian Mafia. The current situations of the criminal group along with their economic impact on the entire world will be discussed. The methodology of the research paper will also be presented and the results will be drawn out of the economic statistics. The main objective of this research paper is to check the association of the origin of Sicilian Mafia with the higher profits earned in the lemon and citrus fruits markets. The work has basically been done by taking the data from the imperfect market situations of the 19th century. The paper is going to highlight the facts regarding the Italian imperfect markets of citrus fruits where the fixed costs of growing citrus fruits were very high. This entry barrier caused only a few people to grow these fruits, thus earning significantly higher profits as well (Dimico, 2012). At that time the government rule was also very poor, but in order to prevent the people from earning higher profits, government imposed certain property restrictions on these people. In order to protect their property rights, they hired mafia for the protection purpose. This was the basic origin of the Mafia in Italy (Dimico, 2012). The mafia has spread to large numbers now and is creating its impact on the entire world in the most negative aspects. This entire paper is going to explain the present situation of the Sicilian Mafia and will also explain its future position and its impact on the world as well (FBI, 2012). The entire research is followed by a conclusion which will give the answers of the hypothesis regarding the association of the origin of Sicilian Mafia with the imperfect market competitions in the 19th century in Italy. The paper will also discuss some recommendations, which need to be implemented in order to reduce the impact of this dangerous organized crime group on the rest of the world. The origin of the Sicilian Mafia basically initiated in the beginning of the 19th century in an Italian city named as Sicily. The roots of this Mafia system lied in the feudal lord system of that city. There were no central government, no rules and regulations, and no monarchy in Sicily at that period of time. People of Sicily kept looking for a protection from the rulers, but when they were not provided with the proper lawful protection, Mafia came in to existence and they took over the charge of their city’s protection in their own hands (Sinai, 2007). The Cosa Nostra started offering a complete protection to the property of the landlords of Sicily because of the lack of proper governance and protection policies. They combined in huge numbers, took over the police force of the area and started their oppressive rule for the sake of the protection of the property rights of the landlords who were earning higher profits from the production of citrus fruits (lemons and oranges) and were facing property restrictions from the present government. The Mafia basically served as intermediaries for carrying out the contracts and transactions for the private parties (Shanty and Mishra, 2008). Soon after their string power, the Mafia people started showing up in the politics of Italy as well. Their real power showed up in the electoral reforms which were held in 1882. As their position was strong in their own rural area, their winning chances were very strong as well. The Mafia won the electoral reforms and the Sicilian Mafia brought a great revolution in Sicily. Previously, there were no proper roads to Sicilia, but now in the golden period of 1882-1890, the Sicilian Mafia did a lot of work to bring reforms in their area. At that time, when the Sicilian Mafia was at a very good position, it demanded to dominate some parts that linked the local community with the world outside, and thus earned a political presence as well (Sinai, 2007). During their golden era, the Sicilian Mafia was known to be a very honorable group of people. People used to honor their presence in the meetings and their political presence was much positive as well. The word Mafia meant ‘manly’ in Sicily. In 1920s, the Mafia converted in to an organized criminal group of Italy because of the strong political powers they held at that time. The group made a lot of money by taking over the building contracts because of the existing political powers they had. They made millions of dollars with this profession and maintained an international organized crime group in 1950s. Now, they are regarded as the second most powerful group of Italy (FBI, 2012). In 1992, Sicilian Mafia attacked the Italian Magistrate, Giovanni Falcone, who was with his wife and three children. The Mafia killed the entire family by attacking them with a bomb. Falcone was also the Criminal Affairs Director of Rome at that time. Soon after this incident, the killings began. One month later, on 19th July, they attacked Falcone’s replacement officer, Judge Paolo Borsellino in Sicily. A bomb was fitted in his car and he died along with his five bodyguards. From then, the Italian governments and the FBI have been doing a lot of efforts to reduce their criminal activities in Italy but their efforts are not showing up with desirable results (FBI, 2012). The criminal activities of Sicilia have now taken their adverse form as now they are operating at an international level as well. Basically Sicilian Mafia is famous for political corruption and interference, drugs smuggling, counterfeiting, human trafficking and many other fraudulent activities as well. The Sicilian Mafia has 250,000 people roaming around in the world. 3000 members and affiliated people are spread in the United States and are earning billions from their fraudulent activities as well. Most of the database network is present in New York, Philadelphia and New Jersey as well (FBI, 2012). Italian Government has been seen doing a very hard work on the reduction of the criminal activities of Sicilian Mafia for a long period of time. They have fought against the Mafia by every possible way they can. They have arrested various bosses, important people of the Mafia and have given a lot of strength to people to resist these shocks. This has done a great progress in the country but the mob is seen to grow over a period of time. They are also becoming a reason of financial loss for the big businesses of Italy (FOX News, 2009). In 2007, November, the boss of Sicilian Mafia, Lo Piccolo got arrested by the Italian Police. He was caught while he was running from the Police. The Italian Police found some documents with him as well. One of the documents was released in the news press, which stated the commandments of the Sicilian Mafia. This paper consisted of 10 rules and policies which were fixed by the Sicilian authorities for those people who wanted to join Mafia. These commandments came as a shock to the Italian citizens. They were very strict rules which indicated that loyalty to the Mafia was above the health of family members (BBC, 2007). In December, 2008 a police operation was done by the Italian Police on Sicilian Mafia. A raid was carried out on the island, which is considered as the homeland of Sicilian Mafia. A lot of important people of Sicilian Mafia were caught during the raid and this step was considered as a great progress in the fight of Italian Government against the Italian mafia. At that time, the Sicilian Mafia was very low because Piccolo was caught a year before this raid. Bosses of the bosses were caught in the raid and the criminal activities were reduced to a great extent. This gave a blow to the activities of Sicilian Mafia in Italy. The people who were caught were about to plan some very serious attacks on the officers and other important people of Italy. This raid saved Italy from some very big troubles which were going to be caused to them by the activities of Sicilian Mafia (The Telegraph, 2008). Different people have done various researches on the Mafia history. According to Gambetta, Mafia was originated because of the security concerns of different small cities of Italy. As there was no proper government rule and there were security issues and the Mafia came up as the perfect security for the city (Dimico, 2012). According to Dickie, Mafia originated when some men of honor overtook the lemon grove of a landlord with the help of increased exploitation and violence. Dr. Galati exposed the increasing crime rate in Sicily, and on the basis of his work, the government of Italy started taking control over the activities of organized crime groups in Sicily. He wrote some notes on the exploitation activities of Cosa Nostra in the Sicilian Mafia in Sicily. Their crime activities spread outside Sicily due to their increased political awareness and interference as well (Dimico, 2012). The total revenue of Sicilian Mafia is considerably a large amount and forms a considerable portion of the country’s GDP as well. They earn a lot of money from their criminal activities, and earn big amounts out of them. In other terms, Mafia is the largest business of Italy, as its revenue forms almost 12% of the total GDP of Italy. This 12% comprises of 180 billion Euros revenue. Sicilian Mafia has spread its business in almost 620 towns of Italy, where 13 million people are taking care of their informal business. This 12 million forms 22 percent of the population of the entire country. The vast spread of Italian Mafia has attracted different politicians and scientists from all over the world because of its widespread databases network (Dimico, 2012). Different people have worked on the issue as to why the mafia only originates from the small areas of the country. Various reasons have been proposed by different people as well. The researchers say that the main reason as to why the Mafia originated from the smaller portions of Italy is because the small areas have very poor governance. They do not have proper lawful environments and mostly feudal system prevails in these areas. This is because some powerful men come up and replace the authorities and start ruling in these areas. Mainly, most of the researchers stated that the main cause of the origination of the Mafia was the weak governance. A lot of people did a vast research on this area of study and found out that poor government regulations were the cause of the evolution of the Mafia in the Italian state. These researches state that when there is no government in a state or if there is bad governance and the people are not provided with full protection, in these cases, most of the strong groups of the society come forward and fill these positions. The same thing happened with the Sicilian Mafia (Dimico, 2012). Different works have been done on the social and capital losses of the small cities due to the rule of Mafia. The development of organized crimes is affected by the social and capital losses because of kinship and corruption as well. The researches considered the fact that private trust is very important rather than the public trust. Another research stated that the firms which use a very high cost to regulate their firms force them to shift from regular and legal markets to imperfect and illegal markets as well. These illegal and irregular markets are mostly controlled by Mafia. Thus high regulatory cost is another factor which is responsible for the evolution of Mafia. It has also been seen that most of the people shift their markets from legal to irregular ones in order to earn high profit levels as well. This moves the market from perfect competition to imperfect competition. This situation disturbs the perfect competition in the market (Dimico, 2012). The entire literature reviews explain the fact that Mafia mostly appears from very small cities and areas. The bad governance, illegal actions, protection issues and ignorance of the government are the main issues which are held responsible for the origin of Mafia. After originating in a small amount, they start spreading to a large area and start impacting the rest of the world as well. So, it is important that we understand all those factors that are responsible for the evolution of the Mafia Groups (Dimico, 2012). The impact of Mafia on businesses can be demonstrated by the effect they have had on the citrus fruit market. A model can be used to explain the fact how the fixed costs of producing lemons and oranges affect the origin of Mafia. The model has taken the entire data from 1880s, and explains regarding the fact that how the higher costs of producing citrus fruits affects the evolution of Mafia. In this case the model which needs to be estimated is: Mi = ?i+?1?i+?2Xi+µi M is the dependant variable in the model which represents the probability of Mafia which if comes greater than 0 will be positively associated with the towns. The probability of mafia will be o if the variability comes as less than zero. The independent variable is the profits, which are basically associated with the fixed costs which are considered as a barrier of entry in the lemon and orange production market. This model explains that the smaller will be the number of people in a particular market, the larger will be the profits which will be earned by the people existing in the market. Xi highlights some other variables which can control the probability of the Mafia’s origin. Most of the factors which can be included in the Xi variables may be the government control, which if properly maintained can serve as an entry barrier as well. ?i and µi can be associated with each other which represent error terms and fixed costs as well (Dimico, 2012). The entire model explains the fact that high costs affected the production of Mafia in Italy. These high costs were entry barriers for most of the people of Sicily for starting the production of citrus in the area at that time. In order to prevent the government from interfering in the property rights, the lords started taking the services of Mafia. Therefore, mafia originated and started spreading in the entire world. So, according to the methodology used, fixed high costs of producing citrus are the reasons behind the evolution of Mafia in the 18th century (Dimico, 2012). The paper clearly explains the reasons for the origin of the Sicilian Mafia in the state of Italy. The aim of the paper was to explain the basic reasons for origination of the Sicilian Mafia and its impact on the world. The methodology used explains the fact that higher fixed cost of citrus fruits production acted as a barrier of growing lemon and orange fruits in Sicily. This proposition led to higher profit earnings of the producers at that time. To stop the government from interfering in the property rights, the feudal lords hired Mafia who were the strong men of Sicily, who protected all the contracts and transportation activities of the feudal lords. The Mafia now has a very strong hold in Italy and has a great effect on the economic and social activities in the country. A strong government and FBI action is required to stop the Sicilian Mafia from growing at a large pace. Bibliography Associated Press. (2009). Italian Mafia Rakes in Billions as Global Economy Struggles.[Online] FOX News. Available at: [Accessed 19 November 2012]. BBC News. (2007). Mafia's 'Ten Commandments' found. [Online] BBC News. Available at: [Accessed 19 November 2012]. DIMICO, A., ISOPI, A & OLSSON O. (2012). Origins of the Sicilian mafia: The market for lemons. [online].University of Gothenburg. School of Business, Economics and Law. Available at: [Accessed 19 November 2012] FBI.(n.d.)Italian Organized Crime.[Online] The Federal Bureau of Investigation. U.S. Department of Justice.Available at: [Accessed 19 November 2012]. SHANTY, F., & MISHRA, P. P. (2008). Organized crime: from trafficking to terrorism. Santa Barbara, Calif, ABC-CLIO. SINAI, T. (2007). "Terror at Midday" - The Cosa Nostra as a terrorist organisation.Mu?nchen, GRIN Verlag GmbH. Squires, N. (2008).Italians arrest 100 'Cosa Nostra mafia gangsters' in Siciliy raid. [Online] The Telegraph.Available at: [Accessed 19 November 2012]. Read More