Organized crime and corruption: what are the consequences for Italian Cohesion Policy investments?

The paper evaluates the effect of illegal activities on Cohesion Policy implementation. This issue is fundamental in Italy, where large delays in expenditure risk to undermine the growth-enhancing effects of funds. To explain delays, we focus on two criminal behaviours: corruption and organized crime. By exploiting a two-step approach, an empirical analysis is carried out on Italian provinces, with a focus on Southern ones, between 2007 and 2015. The findings show that both crimes, impacting the efficiency of funds, cause delays in the implementation of Cohesion Policy. These consequences are higher if linked to corruption rather than to organized crime.