The course studies criminal behaviour and criminal organizations with the tools and through the lens of applied eco nomics. The first block develops the rational-choice model of crime and confronts each of its predictions with credible quasi-experimental evidence, before moving beyond the model to non-economic drivers and to the behaviour of enforcers. The second block turns to organized crime, analyzing its origins, its economics structure as a firm, and its economic, political, and social consequences. Each lecture pairs a small number of foundational and frontier papers.

Section 1 — The determinants of criminal behaviour
Lecture 1. Foundations: the economic model of crime
We introduce the economics of crime as a field and Becker’s rational-choice model, in which a potential offender weighs the expected gains from crime against the probability of apprehension, the severity of punishment, and the returns available in legal activity. The empirical readings then take the model to the data one parameter at a time: how detection technology and sentencing shift deterrence, how access to legal employment and income shocks move the opportunity cost of crime, and how early exposure to illegal markets raises the lifetime returns to offending.

1. Becker, G. S. (1968). “Crime and Punishment: An Economic Approach.” Journal of Political Economy.
2. Doleac, J. L. (2017). “The Effects of DNA Databases on Crime.” American Economic Journal: Applied Economics.
3. Drago, F., Galbiati, R., & Vertova, P. (2009). “The Deterrent Effects of Prison: Evidence from a Natural Experiment.” Journal of Political Economy.
4. Pinotti, P. (2017). “Clicking on Heaven’s Door: The Effect of Immigrant Legalization on Crime.” American Economic Review.
5. Britto, D. G., Pinotti, P., & Sampaio, B. (2022). “The Effect of Job Loss and Unemployment Insurance on Crime in Brazil.” Econometrica.
6. Sviatschi, M. M. (2022). “Making a Narco: Childhood Exposure to Illegal Labor Markets and Criminal Life Paths.” Econometrica.

Lecture 2. Beyond Becker: preferences, norms, and enforcement
We relax two assumptions of the baseline model. First, offending is not driven by material incentives alone: taste for violence and prevailing social norms shape the private cost of committing a crime. Second, we open up the enforcer’s problem. In line with Becker, police effort reduces crime, but this effort does not respond to crime minimization alone: media scrutiny, political incentives, and racial bias also shape how much the police exert, and who ends up stopped, searched, and arrested.

1. Baysan, C., Burke, M., Gonz´alez, F., Hsiang, S., & Miguel, E. (2019). “Non-economic Factors in Violence: Evidence from Organized Crime, Suicides and Climate in Mexico.” Journal of Economic Behavior & Organization.
2. Gulino, G., & Masera, F. (2023). “Contagious Dishonesty: Corruption Scandals and Supermarket Theft.” American Economic Journal: Applied Economics.
3. Draca, M., Machin, S., & Witt, R. (2011). “Panic on the Streets of London: Police, Crime, and the July 2005 Terror Attacks.” American Economic Review.
4. Knowles, J., Persico, N., & Todd, P. (2001). “Racial Bias in Motor Vehicle Searches: Theory and Evidence.” Journal of Political Economy.
5. Grosjean, P., Masera, F., & Yousaf, H. (2023). “Inflammatory Political Campaigns and Racial Bias in Policing.” Quarterly Journal of Economics.
6. Mastrorocco, N., & Ornaghi, A. (2025). “Who Watches the Watchmen? Local News and Police Behavior in the United States.” American Economic Journal: Economic Policy.

Section 2 — The economics of organized crime
Lecture 3. The origins of organized crime
Why do criminal organizations arise, and where? We start from the classic weak state theory, which ties the birth of the Sicilian mafia to a state unable to protect property and enforce contracts. We then follow work showing how armed actors build proto-state institutions and tax the populations they control, how gangs govern in direct competition with a functioning state, and how mafias expand into strong states and transplant across borders through migration.

1. Acemoglu, D., De Feo, G., & De Luca, G. (2020). “Weak States: Causes and Consequences of the Sicilian Mafia.” Review of Economic Studies.
2. S´anchez de la Sierra, R. (2020). “On the Origins of the State: Stationary Bandits and Taxation in Eastern Congo.” Journal of Political Economy.
3. Blattman, C., Duncan, G., Lessing, B., & Tob´on, S. (2024). “Gang Rule: Understanding and Coun tering Criminal Governance.” Review of Economic Studies.
4. Dipoppa, G. (2025). “How Criminal Organizations Expand to Strong States: Local Agreements and Migrant Exploitation in Northern Italy.” Journal of Politics.
5. Anelli, M., Pinotti, P., & Porreca, Z. (2025). “The Departed: Italian Migration and the American Mafia.” Working paper.

Lecture 4. Criminal organizations as firms: the industrial organization of crime
We treat criminal organizations as profit-maximizing firms operating in illegal markets, and ask how they respond to economic conditions. The readings trace how enforcement reshapes trafficking routes and network structure, how shocks to the price of inputs and outputs change the incentive to enter and to fight over drug production, and how criminal firms diversify across illegal businesses.

1. Dell, M. (2015). “Trafficking Networks and the Mexican Drug War.” American Economic Review.
2. Dube, O., Garc´ia-Ponce, O., & Thom, K. (2016). “From Maize to Haze: Agricultural Shocks and the Growth of the Mexican Drug Sector.” Journal of the European Economic Association.
3. Castillo, J. C., Mej´ia, D., & Restrepo, P. (2020). “Scarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War.” Review of Economics and Statistics.
4. Battiston, G., Daniele, G., Le Moglie, M., & Pinotti, P. (2024). “Fuelling Organised Crime: The Mexican War on Drugs and Oil Theft.” Economic Journal.

Lecture 5. The consequences of organized crime
Organized crime not only operates as an (illegal) firm, but also as a governance actor that imposes externalities. We organize the evidence by the type of effect each study identifies: economic, political, and social. We look at local growth and labour markets; the capture of elections and the allocation of public resources; and the human costs of violence, displacement, and expanding drug markets.

Economic effects
1. Fenizia, A., & Saggio, R. (2024). “Organized Crime and Economic Growth: Evidence from Municipalities Infiltrated by the Mafia.” American Economic Review.
2. Melnikov, N., Schmidt-Padilla, C., & Sviatschi, M. M. (2025). “Gangs, Labor Mobility, and Develop ment.” Econometrica.

Political effects
3. De Feo, G., & De Luca, G. (2017). “Mafia in the Ballot Box.” American Economic Journal: Economic Policy.
4. Di Cataldo, M., & Masrorocco, N. (2022). “Organized Crime, Captured Politicians, and the Allocation of Public Resources.” Journal of Law, Economics, and Organization.

Social effects
5. Daniele, G., Le Moglie, M., & Masera, F. (2023). “Pains, Guns and Moves: The Effect of the U.S. Opioid Epidemic on Mexican Migration.” Journal of Development Economics.
6. Daniele, G., Soliman, A., & Vargas, J. (2026). “Cocaine Goes Bananas: Global Spillovers from an Illicit Supply Shock.” Working paper