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Tag Archives: southern italy

Southern Italy’s Hidden Economy

Many of my recent posts have been about what economic statistics tell us or don’t tell us about the reality on the ground.

Southern Italy is often portrayed as a backward region mired in corruption and sucking endless money from more prosperous parts of Italy and Europe.

I was reading a wikipedia article on organized criminals in Southern Italy and a source cited there opined that Calabria would be a “failed state” if not for the rest of Italy holding it up.

At first glance, unemployment is ridiculously high in the Mezzogiorno yet people somehow spend far more per capita than they supposedly earn.
The numbers just don’t add up.

To get a complete picture of the reality of Southern Italy and a more accurate idea of the gap between North and South, one absolutely must take the workings of the black economy into account.
This is where much of the real money is made.
And explains why organized criminals are such an embedded part of the region’s culture.
Much of their role is simply substituting for government and police: for a fee(aka taxes), they guarantee “black” commercial transactions and contracts through the threat of force.

LINK

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