Identification and Economic Analysis of Governance Mechanisms in Legally Registered Mafia Firms

Abstract

The Mafias, which are considered to be the most sophisticated form of criminal organization, do not confine their activities to illicit trafficking. They also develop businesses in the lawful economic sphere. The economic impact of such businesses can be striking: the assets owned by Italian Mafia families in 1999 and 2000 were estimated at €5.2bn in the retail and tourism industries, €4.2bn in services, €7.8bn in import and export trade activities, €3.12bn in the construction industry, €13.1bn in finance, €2.6bn in the insurance business, and €10.5bn in real-estate activities (Confcommercio, 1999, 2000). In 2011, the global revenues generated by Italian Mafia businesses reached €140bn, which accounts for 5% of Italy’s GDP. In Japan, meanwhile, light was shed on the penetration of the Yakuza clans in the lawful economy during the burst of the real-estate bubble at the beginning of the 1990s. According to the Japanese authorities, 30% of the US$600bn of unrecovered loans made by local banks was granted to legally registered firms controlled by Yakuza clans.