Trust and in-group favoritism in a culture of crime

- We conducted experiments in three high schools in two neighborhoods of Palermo, Italy.
- Neighborhoods had nearly identical demographics but different Mafia involvement.
- High-Mafia schools show lower generalized trust but greater in-group favoritism.
- Punishment fails to reduce cooperation differences across schools in prisoner's dilemma.
- Suggests a culture of crime can affect behavior in ways that might impact development.

We use experiments in high schools in two neighborhoods in the metropolitan area of Palermo, Italy to experimentally support the argument that the historical informal institution of organized crime can undermine current institutions, even in religiously and ethnically homogeneous populations. Using trust and prisoner's dilemma games, we found that students in a neighborhood with high Mafia involvement exhibit lower generalized trust and trustworthiness, but higher in-group favoritism, with punishment norms failing to resolve these deficits. Our study suggests that a culture of organized crime can affect adolescent norms and attitudes that might support a vicious cycle of in-group favoritism and crime that in turn hinders economic development.