ECCS10 - Lisbon


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ECCS10 - Lisbon

  1. 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. 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. 3. One major problem  With globalization and liberalization  Increasing spread and prosperity of illegality  Illegal systems contribute to national and worldwide wealth!
  4. 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. 5. Dynamics of (Il)legallity  Ilegal systems flourish in typologies, frequency, spreading, and related costs  Corruption  Organized crime  Extortion racketeering  Terrorism
  6. 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. 7. Terrorism  Financial costs and casualties are lower when compared with the costs of other forms of illegality (source: the World Bank, 2008: 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. 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  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 )  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. 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. 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. 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. 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. 13. In the US  Obviously, Mafia export is particularly evident, thanks to first wave migration of Cosa Nostra in the 30s.
  14. 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. 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. 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. 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. 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. 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. 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; ature=related )
  21. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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