1. Dynamics of Illegality.
The case of Mafia systems
Rosaria Conte1
Federico Cecconi1
Barbara Sonzogni2
1 LABSS (Laboratory of Agent Based
Social Simulation), Roma, ISTC-CNR
2 RISMES, Roma, Univ. Sapienza

2. Features of Complex Systems
 Far-reaching and accelerated diffusion
 Multiple levels with multidirectional connections
 Heterogeneous interfering networks
 ICT-driven innovation
 Fuzzy confines
 Competitive evolutionary processes (economic
growth ≠ demographic growth)

3. One major problem
 With globalization and liberalization
 Increasing spread and prosperity of illegality
 Illegal systems contribute to national and
worldwide wealth!

4. In this paper
 Call attention to dynamics of Mafia systems, a
serious social pathology insufficiently perceived at
the international level, also by research funding
agencies
 Pizza, computer and finance: Discuss the new
character of Mafia systems
 Why bother with Mafia in complexity?
 Simulation potential for the study of this
phenomenon
 Potential application to theory-driven policy modeling

5. Dynamics of
(Il)legallity
 Ilegal systems
flourish in typologies,
frequency,
spreading, and
related costs
 Corruption
 Organized crime
 Extortion racketeering
 Terrorism

6. A myopic and
hypocritical view
 EU Cooperation research funding agency lists
terrorism and corruption as the highest priorities
in crime fight and prevention (both SSH and
Security)
 A submitted project on extortion racketeering (in
particular, Mafia) was rejected under the main
consideration that “Mafia is mainly an Italian
problem”
 False assumption and wrong order of priority!

7. Terrorism
 Financial costs and casualties are lower when compared with the
costs of other forms of illegality (source: the World Bank, 2008:
http://www.cambridge.org/us/catalogue/catalogue.asp?isbn=97805218
87588&ss=exc )
 Victims:
• 2001 shows terrorismʼs highest peak (3250 victims, from Frey et al. 2004)
• against organized crime 16,000 murders per yr in the last decade:
• 6 times the number of people who died on 9/11
• more than a 1000 times greater than the number of Americans who died in terrorist
incidents in a typical year prior to 2001
 Ecomomic costs:
• Enders and Sandler estimate of the economic costs of terrorism to the U.S.
economy = $90 billion of lost output),
• Anderson (1999) estimated the cost of organized crime in the United States
to be more than $1 trillion annually.

8. Corruption
 Costs dear to public administration (its costs are evaluated around 4% of
GDP in high-corruption countries like Italy or Greece)
 Generally, corruption entails a severe loss of competitiveness (see data from
the World Economic Forum
http://www.forbes.com/forbes/2007/0416/062a.html
 But is strongly path-dependent: it tends to increase in countries which score
high on TI cross-national comparison (see Conte, 2010; see also Svensson,
2005; Della Porta, 2009; and TI data at http://www.transparency.org/ )
 No matter how fast it increases and spreads in those areas, traditionally low-
corruption countries - like Northern European ones - tend to have corruption
as a marginal phenomenon, usually kept under control.
 And if they see some increase, this is mainly due to other forms of illegality
taking root (like for example, Mafia or ʻNdrangheta organizations; cf.
Forgione, 2010; Gratteri, 2009))

9. Mafia
 Many territorial systems
 Cosa Nostra
 ʻNdrangheta
 Camorra
 Sacra Corona Unita
 Stidda
 Basilischi
 Which migrated to regions characterized by
richer markets!
 Lets hear Paolo Borsellino (Italian
magistrate who played a major role in Anti
Mafia investigations) on 26 January 1989, 3
ys before being killed by Cosa Nostra.

10. In 21 ys from Borsellinoʼs lecture,
the Mafia export made progress…
 In2010
Forgione,
former
President of
Antimafia
Commission,
published the
geo-criminal
maps of mafia
export
Data from
sentences
and trials
Legal
documents
and judiciary
activity
reports.

11. As a present to our hosts :-)…
 Geo-criminal
map of
Camorra in
Spain and
Portugal
 At the
international
level
Camorra
conquered
all the
markets of
falsification

12. Unlike
corruption…
 Mafia systems prosper
even in Northern
European countries
 ʻNdrangheta became
the major international
broker of cocaine (see
also Gratteri, 2009)
‘Ndrangheta in Germany

13. In the US
 Obviously,
Mafia
export is
particularly
evident,
thanks to
first wave
migration
of Cosa
Nostra in
the 30s.

14. How about fight
against Mafia
systems?
 181 round-ups executed
 Arrested 50 fugitive bosses
(included Giuseppe Nirta, the
responsible for the Duisburg
slaughter, 6th August 2007)
 Arrested 104 dangerous
criminals and 2.080 affiliates
to Mafia systems
 confiscated a value equal to 4
billion Eur

15. National fight insufficient
 However, Mafia systems are endowed with an
extraordinary reproductive power, mostly due to their
penetration in the rest of the world
 Mafia bosses invest out of Italy
 In the processes of liberalization that prevailed in Western
societies in the last ys, the Mafia systems have become
dynamic factors of globalization, not only criminal but also
economic-entrepreunurial.
 ʻNdrangheta got ahold of narco-traffic monopoly once it
acquired an international dimension
 Once capitals are so large, Mafia systems can but land at
wealthy countries,
 Hence Mafia systems easily expanded

16. Mafia enterprise
 Mafia systems are exported not
only in the criminal dimension
but also in its economic-
financial dimension
 Mafia systems are no more only
criminal systems but also large
holdings: globalization
represented a very good
opportunity, determining a great
expansion for the Mafia
systems with respective
specializations:

17. Some figures
in Italy
 Mafia in Italy is the 1st
enterprise (source:
Eurispes and Sos-
Impresa)
 yearly sales = 120-180
billions (5-7% of GDP),  Only 40-50% of such gains is
reinvested in traditional criminal activity
 net income of 70-80 billions
 Affiliatesʼ salaries
 give work to 10% of active
pop. in Southern Italy  Assistence to affiliates in prison and
their families
 Economic costs  Purchase of drugs and weapons
 250 millions p.d. from legal
to illegal economy  The remaining is legalised
 equivalent loss of fiscal  They contribute to the world GDP with
entries economic strength of small countries

18. In the world
 Mafia systems share of world GDP 3-5% - simulations about potential
gains from all illegal businesses: Drugs, weapons, counterfeited goods,
trade of humans, prostitution, trade of organs
 Global amount > global sales of world-wide trade of iron and steel
 No surprise if one considers the amount of wealth produced p.y. by the
cycle of cocaine:
 From producers, 1 k of cocaine costs about 1300-1500 eur.
 Same quantity wholesale goes up to 40,000 eur
 According to UN 994 tons were produced in 2008
 994 times 4,5 (from pure to cut cocaine)= 4473 tons introduced into the
global market
 Retail price goes up to 70 eur p.g.
 Proceeds = 313,110 billions eur.
 If we consider of trade passages and some fixed costs of intermediation,
we can conclude that in one year the market of cocaine produces about
354,661 billions eur.

19. Mafia Vs other forms of ilegality
 All are fast spreading
 Network-based (this is true also for Mafia
systems that were originally territorial)
 Unlike corruption and terrorism, Mafia systems
are culture-insensitive
 although originally the culture of honor mattered in
Mafia systems
 current recruitment is indifferent to cultural,
ideological, religious affiliation

20. Mafia as institutional systems
 Mafia systems combine local hierarchies and global
networks
 At the global level, network-based enterprises
 At the local level institutional systems
• Social order (Pax mafiosa: see the Rosarno event) around a
• Respected authorities based on
• Terror, culture of honor and social capital (trust networks)
• Normatve code
• Centralised and distributed control
• Satisfaction of individual needs
• Etc.
 The fundamental role of trust (see Borsellino, 2008;
http://www.youtube.com/watch?v=ChgP2YbBR5s&fe
ature=related )

21. Evolving systems?
 Can we say that Mafia systems are
evolving systems in a social evolutionary
sense?
 Ever since it made its first appearance in
Spain in the 16th century, it started to migrate
soon to other regions and penetrate deeply
into them

22. Still about
European hypocrisy 1/2
 After Duisburg, Petra Reski writes the story
of Mafia penetration in Germany.
 Mafia. Of Gofathers, pizzashops and false
priests - the German Gomorra - appears in
German bookshops in 2008
 A few days from publication, the book is
censored with a double sentence by
Duisburgʼs and Munichʼs Courts: magistrates
protect the reputation of people who,
according to both Italian authorities and BKA,
are associated to ʻNdrangheta.
 Why this sentence? Those people have a
clean record in Germany because in this
country there is not (yet) a law against
“associazione a delinquere di stampo
mafioso” (association in Mafia system)

23. European hypocrisy 2/2
 We should get rid of the hypocrisy, to use
Forgioneʼs words, to say that “mafia does not
exist until streets are not blood-stained”
 Indeed, we should search for mafia criminals
before streets are stained with blood! We
should not wait Duisburg slaughter to
understand that ʻNdrangheta makes business
and investment in Germany since at least 20
ys.

24. Efficient fighting
policies are not
obvious
 There is a growing  Arrests amount to not
need to endow much: the systems
governments and regenerate
intelligences of  Even
different countries counterproductive:
with common costs of legal
instruments both assistence for
 for investigation affiliates in prison
 for penal and judiciary embitter racketeering
activity and protection-money

25. What is going to happen where
and how?
 So far no investigation of the dynamics of
Mafia systems
 Under what economic, institutional, social,
cultural conditions do they succeed in taking
roots in one society
 When do they migrate
 Where are they most likely to move to
 Which policies are most efficient

26. Need for innovative scientific
instruments
 At the theoretical
 Methodological
 Technical level
 Simulation techniques and platforms are
needed
 To investigate dynamics
 Within society: beside economic conditions, which
social-cognitive factors favor the penetration of
Mafia systems
 Between societies

27. Not any simulation model
 In particular, agent based models are needed
 Where complex aspects of autonomy agency
can be implemented
 Generate own beliefs and goals
 Recognize norms and authorities
 Adopt norms (see EMIL-A, Conte et al., 2011; EMIL-
S from Troitzsch and Gulyas, 2011)

28. DyLEG-1: A preliminary model of the intra-societal
dynamics of Extortion Racket Systems (ERSs)
1. how does a settlement with ERS behave over time?
2. equilibrium or dynamic trends?
3. Which one does better? ERS or PP and POs?
4. Under what conditions ERS withdraw or grow up?
5. which policies work better?
n Prosecute ERS affiliates, comparing entity of sanction, certainty of
sanctions, frequency of arrest, time elapsed between arrest and
sanction
n Prosecute victims yielding to extortion
n More licence and infrastructures
n Reduced probability to be punished
n Better salaries to PO (to discourage bribery)
n Reduce taxation, and favor firms' survival
n Run protection programs for collaborating ERS affiliates etc.

29. The model
 World = One settlement (town or village) ie., one set
of agents. No topological representation
 It includes a public pool (revenues from tax payers
plus possible extraordinary resources) and a certain
number of firms. Taxes and racket are
parameterised. If the public pool is above a
threshold, public officials (fighters and
administrators) and infrastructures for investments
are available. If it is below, no policy can be made.

30. Parameters
 Number of agents per type (see below)
 Number of firms
 PP threshold
 Demand
 Discount factor
 Capital multiplier
 Salaries (for employees and POs)
 Tax (amount)
 Bribe (amount)
 Racket (amount)
 Punishment (amount and probability)
 Sanction (amount and probability)

31. Events
 At each tournament agents accomplish one simple action (part
of a complex action).
 When firms give no revenues, they exit the settlement. The main
behavior for firms is: to hire/to fire
 Revenues depend on
• Demand
• Infrastructures, automatically set up as a share of public pool (PP). PP acts
as a multiplier of the firms' product if it exceeds the threshold. In the
opposite case, it acts as discount factor.
• Racketeering
• Taxes. These are automatically and regularly issued.
 Bribes inflate the capital needed for investment. Large firms survive,
small firms extinguish
 Increased PP lead to more infrastructures and PO units.

32. Measures
 Revenue computation. Each
firm has a demand for his production. InvD = a – Demand
GrossRevenue = ln (InvD · NEmpoloyees) · K
If demand increase, then firms tend Taxable = InvD · NEmpoloyees
to take on workers, otherwise tend to
fire them. Costs = c · NEmpoloyees + b ·Taxable
FirmRevenue=GrossRevenue-
Cost-RacketPaid
Public Pool = ∑ Taxable i - ((c · NPos) + Bribes + Infrastructure Costs)
for each firm i
ERS Revenue = ∑ RacketPaid i - (Punishment + Sanction )
for each firm i

33. Agent typologies
 ERS affiliates
 PO: Public officials (policemen,
magistrates)
 A: administrators
 V: victims
 firm employers,
 employees,
 may intersect with PO
 B: bribes (subset of PO)

34. Goals Propensities
 AG: make money  Survive > freedom > parsimony
 MG1: survive  Freedom > survival > parsimony
 MG2: don't go to jail  Freedom > parsimony > survival
 Survival > parsimony > freedom
 MG3: don't lose money
 Parsimony > freedom > survival
 MG4: don't waste time
 Parsimony > survival > freedom
 MGs are here arranged in a
decreasing order of
importance. Order can
change according to
individual propensities (see
below).

35. Very preliminary but…
 Already useful to investigate effects of racketeering on firmsʼ
revenues
 The critical level of resources (PP and PO) for containing
expansion of ERSs
 Short-term upates, DyLEG-2
 the role of infrastructures
 bribery in administration
 Mid-term updates, DyLEG-3
 External settlements and migration: will ERSs migrate? Where will
they move to and when?
 Compare different ERSs based on real database from Univ. of
Palermo and Fondazione Rocco Chinnici

36. Conclusions 1/2
 Mafia = organized crime at world level!
 Although its costs > other form of criminality, media and
governments seem to pay more attention to the latter
 And yet, we cannot afford wait further! Only coordination at
international level will achieve efficient fight, if not
prevention
 Mafia is NOT a consequence of poverty. Mafia prospers in
wealthy societies
 Mafia systems are evolving systems
 Large pool grants selection
 A subset of systems replicates and grows
 Needs new markets to conquer and hybridates

37. Conclusions 2/2
 What makes some ERSs outcompete other (legal)
systems?
 Santi Romano (1947) spoke about a “parainstitutional”
system. What did he mean? Operational translation!
Simulation can provide one.
 Long-term update (DyLEG-4):
• Implement model on EMIL-S
• Under what conditions mafia-antagonist norms
emerge and spread?
• Compare “institutional” and “para-institutional”
systems and check conditions under which one is
more efficient than the other
• Check efficacy of more complex policies