I examine the post-war economic development of two regions in southern Italy exposed to maa activity after the 1970s and apply synthetic control methods to estimate their counterfactual economic performance in the absence of organized crime. The synthetic control is a weighted average of other regions less aected by maa activity that mimics the economic structure and outcomes of the regions of interest several years before the advent of organized crime. The comparison of actual and counterfactual development shows that the presence of maa lowers GDP per capita by 16%, at the same time as murders increase sharply relative to the synthetic control. Evidence from electricity consumption and growth accounting suggests that lower GDP reects a net loss of economic activity, due to the substitution of private capital with less productive public investment, rather than a mere reallocation from the ocial to the unocial sector.