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Abstract. The paper analyses the underpinning factors of foreign direct investments• Vittorio Daniele is Researcher in Economic Policy at the University Magna Graecia of Catanzaro; email: v.daniele@unicz.it. Ugo Marani is Full professor of Economic Policy at the University Federico II of Naples; E-mail: marani@unina.it. The present work is the result of a common reflection; nonetheless, sections 1, 2.1 and 4 can be attributed to Ugo Marani, sections.2.2. and 3 to Vittorio Daniele. The authors would like to thank Massimo Aria for some useful suggestions.2

Abstract. The paper estimates the effects of organized crime on FDI inflows in 103 Italian provinces in the period 2004-06. The presence of organized crime at a provincial level is quantified through several indicators, based on data for different kinds of crimes: extortion; association for criminal purposes, including mafia (Art. 416 and 416 bis of the Italian Penal Code); attacks; arson. Several control variables are used, included a proxy for (financial) investment incentives provided by public sectors. Estimation suggests that FDI inflows are influenced by different variables. Our results show that the extent of extortion and the number of persons denounced for "criminal association" are significantly and negatively correlated with FDI inflows. Finally, our analysis suggests the presence of organized crime is a strong disincentive for foreign investors, particularly in the less developed Italian provinces.

The paper aims at connecting fiscal and external imbalances in the Eurozone. After the shock of the 2007 financial crisis, the current account position was the root cause of discriminatory behavior of foreign lenders towards single countries. Once the interaction between the current account and fiscal imbalances started, the only way out to restore stability and stem capital outflows was to implement fiscal retrenchments and real devaluation. The choice governments of peripheral countries face is therefore, at least in the short run and in recessive conditions, either to restore the equilibrium to their public finance, or to counteract the real shocks coming from the crisis. This suggests to consider that the stability of the Eurozone could be realized at expenses of a lower output in peripheral countries