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Gold exploitation and socioeconomic outcomes: The case of Burkina Faso

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  • Zabsonré, Agnès
  • Agbo, Maxime
  • Somé, Juste

Abstract

In the early 2000s, Burkina Faso launched several legal reforms aimed at increasing gold production. This resulted in a gold mining boom, making gold the main export product and the main source of economic growth of the country. We hypothesize that gold extraction improved population living standards. This paper investigates how the gold boom in Burkina Faso which began in 2007 has affected socioeconomic outcomes. We use a simple theoretical model to motivate the testing of several hypotheses regarding these impacts. Employing a difference-in-differences strategy as well as panel data models, we estimate the impacts using data from household surveys undertaken in 2003 and 2009 and administrative data. Consistent with our model, the results suggest that areas hosting gold extraction have better average living standards in terms of headcount ratios, poverty gaps and household expenditures than do areas without gold. However, the gold boom is also shown to have potentially increased local inequality and child labor in areas with these income gains. These results demonstrate the importance of proactive government policy in mitigating negative welfare impacts.

Suggested Citation

  • Zabsonré, Agnès & Agbo, Maxime & Somé, Juste, 2018. "Gold exploitation and socioeconomic outcomes: The case of Burkina Faso," World Development, Elsevier, vol. 109(C), pages 206-221.
    • Handle: RePEc:eee:wdevel:v:109:y:2018:i:c:p:206-221
    DOI: 10.1016/j.worlddev.2018.04.021
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    Cited by:

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    3. Sanfo, Jean-Baptiste M.B., 2021. "Connecting family, school, gold mining community and primary school students’ reading achievements in Burkina Faso – A three-level hierarchical linear model analysis," International Journal of Educational Development, Elsevier, vol. 84(C).
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    5. Antonio Savoia & Kunal Sen, 2021. "The Political Economy of the Resource Curse: A Development Perspective," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 203-223, October.
    6. Konte, Maty & Vincent, Rose Camille, 2021. "Mining and quality of public services: The role of local governance and decentralization," World Development, Elsevier, vol. 140(C).
    7. Sebri, Maamar & Dachraoui, Hajer, 2021. "Natural resources and income inequality: A meta-analytic review," Resources Policy, Elsevier, vol. 74(C).
    8. Youmanli Ouoba, 2023. "Testing the necessary conditions for sustainability in the mining sector in Burkina Faso," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 36(1), pages 1-12, January.
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    10. Luisito Bertinelli & Arnaud Bourgain, 2021. "Impact of mining boom on the quality of public goods in Sub-Saharan Africa," DEM Discussion Paper Series 21-13, Department of Economics at the University of Luxembourg.

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    More about this item

    Keywords

    Gold mining; Poverty; Inequality; Schooling; Child labor; Burkina Faso;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)

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