The Cost of Protection Racket in Sicily

The purpose of this paper is to estimate the current cost of protection rackets in Sicily. By means of a database constructed on judicial evidence, it has been possible to come up with an estimate of the average and total costs of the protection-money system, as well as finding out in which sectors of economic activity and in which provinces is most pervasive. The average monthly payment is approximately 600 euros per business, with stronger effects in those areas with a relatively more traditional economic structure. As a whole, in monetary terms, the protection racket in Sicily accounts for over 1.4% of gross regional product. Finally, the paper supports the hypothesis that in most cases, the pervasive presence of the mafia represents a considerable constraint on business growth