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Research reveals organised crime might fall with corruption

Thursday 3 October 2019

A University of Salford academic has discovered that, despite common assumption, corruption may make organised crime less damaging to economic growth.

Dr Maria Paola Rana, lecturer in Economics, conducted the research using regional data from Italy between 1983 and 2009 and her paper has been published in the journal Annals of Finance.  

Maria, who is originally from Sardinia, explained that Italy was chosen because of the availability of official data on organised crime and mafia related crimes. 

She explained: “The availability of official data provided by the Italian office for national statistics (ISTAT) is clearly due to the historical presence of organised crime in Italy and widespread corruption in the country.” 

The empirical analysis highlighted that, whilst organised crime alone causes harm to economic growth, this damage may be less when corruption is present. The research revealed that, for the case of Italy, the negative effect of organized crime on economic growth is mitigated by the presence of corruption.

The researchers that a possible explanation maybe that where there is corruption, criminals will have less money to invest in crime such as the purchasing of weapons, as they are spending more money on bribing public officials to avoid being caught.  

This therefore leads to the criminals having less money to commit crimes; however, they will likely not be caught for the crimes that they are committing because of corruption. 
These findings highlight the importance of treating both crime and corruption in terms of growth analysis.

Dr Rana said: “The fight against corruption and organised crime is now a key priority for sustainable development and it has also been included by the United Nations among the Sustainable Development Goals to be reached by 2030.

“In order to be successful¿in reducing corruption and organised crime around the world, we need to better understand their nature and links in different countries. 

“The findings for Italy should not be interpreted as support for corruption but rather as an invitation to better understand the two phenomena and their effect on economic growth.”  

In the future Maria hopes to carry out further research in the UK. 

She added: “I would like to better understand organised crime and its activity in the UK, since this is now also a government’s priority, as well as the costs and effects of organised crime on the British economy and business activity.” 

The research was carried out with Keith Blackburn, professor in Macroeconomics at the University of Manchester and Dr Kyriakos Neanidis, reader in Macroeconomics at the University of Manchester. 

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Sam Wood

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