In this paper we study the impact of organized crime on electoral competition. We identify
two determinants affecting the extent to which parties engage in electoral deals with criminal
organization: first, parties get a larger support from organized crime when its control
of the territory is tighter, i.e. when it is more effective in controlling votes; secondly, deals
with organized crime become more salient and more decisive in the presence of strong
electoral competition. Using Sicily as a case, we document the impact of the Sicilian
mafia on parliamentary elections in the period 1946-1992. We find evidence consistent
with the existence of an electoral deal between the mafia and the Christian Democrats:
starting from the 1970s, the Christian Democratic party consistently increased their vote
shares in municipalities in which the mafia operates with respect to the other municipalities.
The results are robust to a variety of specifications, including instrumental variable
models, and to the adoption of alternative measures for the presence of the mafia. The
magnitude of the impact is substantial: our preferred IV specification measures an average
impact of almost 9 additional percentage points which are attributable to the Sicilian
mafia after 1970 in mafia-ridden municipalities.
The empirical findings are consistent with our theoretical predictions, as political
competition increased dramatically during the 1970s and the Sicilian mafia experienced
an extensive centralization process at the beginning of the 1970s, which increased substantially
its control of the territory.