The emergence of criminal organizations is often attributed to weak states’ inability to protect the property rights and safety of their citizens. Yet, criminal organizations often expand to states with strong capacity and well-functioning institutions. This paper proposes a theory accounting for this phenomenon. I focus on one distinctive feature of strong states: their capacity to enforce political and economic competition. I argue that criminal organizations take advantage of highly competitive environments and expand by offering political and economic actors critical resources to gain an edge over competitors. I test this theory in the context of Northern Italy, a region with high social capital and well-functioning democratic institutions, but which has suffered of mafia infiltration since the 1960s. I construct a new municipality level measure of mafia presence, scraping mafia-related news from historic newspapers and validating them with present time mafias indicators from judicial sources and NGOs. My main result, obtained using an instrumental variable approach, is that increases in competition in the construction market (due to a construction boom) and in mafias’ capacity to offer cheap illegal labor (by exploiting migrants from mafia-controlled areas in the south) allowed them to expand to the north. Mafia infiltration impacts politics in the long-run: infiltrated cities display higher support for the Christian Democracy, even when political scandals (Tangentopoli) hit the party and later for Berlusconi. This evidence suggests that mafias’ expansion leveraged deals not only with economic actors but also with political actors, including vote buying for specific parties.