IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v180y2024ics0305750x24000755.html
   My bibliography  Save this article

The effects of mining on local poverty in developing countries: Evidence from Mali

Author

Listed:
  • Coulibaly, Massa
  • Foltz, Jeremy
  • Parker, Dominic
  • Olurotimi, Osaretin
  • Traoré, Nouhoum

Abstract

Recent within-country studies of the ‘resource curse’ call into question whether mining booms benefit local populations living near mineral endowments in developing countries. In particular, mining booms have been associated with increased violence, localized inflation, increased poverty, and increased inequality. Relying on volatile gold prices that have caused mining booms in West African countries (Ghana, Burkina Faso, and Mali) since the mid-2000s, we test whether these booms have increased or decreased poverty and expenditure among populations that live near the mines. Based on detailed household panel data from Mali, our results generally show positive effects of gold price booms on households. Household expenditure increased, and poverty decreased during years of high gold prices for formal and artisanal mining areas, with artisanal mining having a stronger beneficial effect. The results suggest the booms have been more of an economic blessing than a curse in Mali.

Suggested Citation

  • Coulibaly, Massa & Foltz, Jeremy & Parker, Dominic & Olurotimi, Osaretin & Traoré, Nouhoum, 2024. "The effects of mining on local poverty in developing countries: Evidence from Mali," World Development, Elsevier, vol. 180(C).
    • Handle: RePEc:eee:wdevel:v:180:y:2024:i:c:s0305750x24000755
    DOI: 10.1016/j.worlddev.2024.106605
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X24000755
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2024.106605?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fernando M. Arag?n & Juan Pablo Rud, 2013. "Natural Resources and Local Communities: Evidence from a Peruvian Gold Mine," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 1-25, May.
    2. Joseph Marchand & Jeremy Weber, 2018. "Local Labor Markets And Natural Resources: A Synthesis Of The Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 469-490, April.
    3. Mamo, Nemera & Bhattacharyya, Sambit & Moradi, Alexander, 2019. "Intensive and extensive margins of mining and development: Evidence from Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 139(C), pages 28-49.
    4. Anja Benshaul-Tolonen, 2019. "Local Industrial Shocks and Infant Mortality," The Economic Journal, Royal Economic Society, vol. 129(620), pages 1561-1592.
    5. Sanoh,Aly & Coulibaly,Massaoly, 2015. "Socioeconomic and fiscal impact of large-scale gold mining in Mali," Policy Research Working Paper Series 7467, The World Bank.
    6. Bazillier, Remi & Girard, Victoire, 2020. "The gold digger and the machine. Evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso," Journal of Development Economics, Elsevier, vol. 143(C).
    7. Fernando M. Aragón & Juan Pablo Rud, 2016. "Polluting Industries and Agricultural Productivity: Evidence from Mining in Ghana," Economic Journal, Royal Economic Society, vol. 126(597), pages 1980-2011, November.
    8. Nicolas Berman & Mathieu Couttenier & Dominic Rohner & Mathias Thoenig, 2017. "This Mine Is Mine! How Minerals Fuel Conflicts in Africa," American Economic Review, American Economic Association, vol. 107(6), pages 1564-1610, June.
    9. Pelzl, Paul & Poelhekke, Steven, 2021. "Good mine, bad mine: Natural resource heterogeneity and Dutch disease in Indonesia," Journal of International Economics, Elsevier, vol. 131(C).
    10. James Cust & Steven Poelhekke, 2015. "The Local Economic Impacts of Natural Resource Extraction," Annual Review of Resource Economics, Annual Reviews, vol. 7(1), pages 251-268, October.
    11. Guy Michaels, 2011. "The Long Term Consequences of Resource‐Based Specialisation," Economic Journal, Royal Economic Society, vol. 121(551), pages 31-57, March.
    12. von der Goltz, Jan & Barnwal, Prabhat, 2019. "Mines: The local wealth and health effects of mineral mining in developing countries," Journal of Development Economics, Elsevier, vol. 139(C), pages 1-16.
    13. Fernando M. Aragón & Juan Pablo Rud, 2016. "Polluting Industries and Agricultural Productivity: Evidence from Mining in Ghana," Economic Journal, Royal Economic Society, vol. 126(597), pages 1980-2011.
    14. Corden, W Max & Neary, J Peter, 1982. "Booming Sector and De-Industrialisation in a Small Open Economy," Economic Journal, Royal Economic Society, vol. 92(368), pages 825-848, December.
    15. Loayza, Norman & Mier y Teran, Alfredo & Rigolini, Jamele, 2013. "Poverty, inequality, and the local natural resource curse," Policy Research Working Paper Series 6366, The World Bank.
    16. Pokorny, Benno & von Lübke, Christian & Dayamba, Sidzabda Djibril & Dickow, Helga, 2019. "All the gold for nothing? Impacts of mining on rural livelihoods in Northern Burkina Faso," World Development, Elsevier, vol. 119(C), pages 23-39.
    17. Francesco Caselli & Guy Michaels, 2013. "Do Oil Windfalls Improve Living Standards? Evidence from Brazil," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 208-238, January.
    18. Chuhan-Pole,Punam & Dabalen,Andrew L. & Kotsadam,Andreas & Sanoh,Aly & Tolonen,Anja Karolina & Chuhan-Pole,Punam & Dabalen,Andrew L. & Kotsadam,Andreas & Sanoh,Aly & Tolonen,Anja Karolina, 2015. "The local socioeconomic effects of gold mining : evidence from Ghana," Policy Research Working Paper Series 7250, The World Bank.
    19. Stoop, Nik & Verpoorten, Marijke & van der Windt, Peter, 2019. "Artisanal or industrial conflict minerals? Evidence from Eastern Congo," World Development, Elsevier, vol. 122(C), pages 660-674.
    20. Grant D. Jacobsen & Dominic P. Parker, 2016. "The Economic Aftermath of Resource Booms: Evidence from Boomtowns in the American West," Economic Journal, Royal Economic Society, vol. 126(593), pages 1092-1128, June.
    21. Verbrugge, Boris & Besmanos, Beverly, 2016. "Formalizing artisanal and small-scale mining: Whither the workforce?," Resources Policy, Elsevier, vol. 47(C), pages 134-141.
    22. Dominic P. Parker & Jeremy D. Foltz & David Elsea, 2016. "Unintended Consequences of Sanctions for Human Rights: Conflict Minerals and Infant Mortality," Journal of Law and Economics, University of Chicago Press, vol. 59(4), pages 731-774.
    23. World Bank & Foltz,Jeremy David & Shibuya,Sakina, 2022. "The Effects of Internally Displaced Peoples on Consumption and Inequality in Mali," Policy Research Working Paper Series 10054, The World Bank.
    24. Herrera, Joel Salvador & Martinez-Alvarez, Cesar B., 2022. "Diversifying violence: Mining, export-agriculture, and criminal governance in Mexico," World Development, Elsevier, vol. 151(C).
    25. Cummings, Ronald G & Schulze, William D, 1978. "Optimal Investment Strategy for Boomtowns: A Theoretical Analysis," American Economic Review, American Economic Association, vol. 68(3), pages 374-385, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bazillier, Remi & Girard, Victoire, 2020. "The gold digger and the machine. Evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso," Journal of Development Economics, Elsevier, vol. 143(C).
    2. Rodríguez-Puello, Gabriel & Rickardsson, Jonna, 2024. "Spatial Diffusion of Economic Shocks in the Labor Market: Evidence from a Mining Boom and Bust," OSF Preprints tzmf2, Center for Open Science.
    3. 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).
    4. De Haas, Ralph & Poelhekke, Steven, 2019. "Mining matters: Natural resource extraction and firm-level constraints," Journal of International Economics, Elsevier, vol. 117(C), pages 109-124.
    5. Ralph de Haas & Steven Poelhekke, 2016. "Mining Matters: Natural Resource Extraction and Local Business Constraints," CESifo Working Paper Series 6198, CESifo.
    6. Poignant, Adrian, 2023. "Small-scale mining and agriculture: Evidence from northwestern Tanzania," Resources Policy, Elsevier, vol. 83(C).
    7. Ralph De Haas & Steven Peolhekke, 2016. "Mining Matters: Natural Resource Extraction," OxCarre Working Papers 175, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    8. Sandro Provenzano & Hannah Bull, 2021. "The Local Economic Impact of Mineral Mining in Africa: Evidence from Four Decades of Satellite Imagery," Papers 2111.05783, arXiv.org, revised Jun 2023.
    9. Pagel, Jeff, 2022. "A natural resource curse: the unintended effects of gold mining on malaria," LSE Research Online Documents on Economics 115532, London School of Economics and Political Science, LSE Library.
    10. Ampofo, Akwasi & Cheng, Terence C. & Doko Tchatoka, Firmin, 2022. "Oil extraction and spillover effects into local labour market: Evidence from Ghana," Energy Economics, Elsevier, vol. 106(C).
    11. Axbard, Sebastian & Benshaul-Tolonen, Anja & Poulsen, Jonas, 2021. "Natural resource wealth and crime: The role of international price shocks and public policy," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    12. Amarasinghe, Ashani & Hodler, Roland & Raschky, Paul A. & Zenou, Yves, 2024. "Key players in economic development," Journal of Economic Behavior & Organization, Elsevier, vol. 223(C), pages 40-56.
    13. Asatryan, Zareh & Baskaran, Thushyanthan & Birkholz, Carlo & Hufschmidt, Patrick, 2021. "Regional redistribution of mineral resource wealth in Africa," ZEW Discussion Papers 21-032, ZEW - Leibniz Centre for European Economic Research.
    14. Grant Mark Nülle & Graham A. Davis, 2018. "Neither Dutch nor disease?—natural resource booms in theory and empirics," Mineral Economics, Springer;Raw Materials Group (RMG);Luleå University of Technology, vol. 31(1), pages 35-59, May.
    15. Nicolas Berman & Mathieu Couttenier & Victoire Girard, 2023. "Mineral Resources and the Salience of Ethnic Identities," The Economic Journal, Royal Economic Society, vol. 133(653), pages 1705-1737.
    16. Victoire Girard & Nicolas Berman & Mathieu Couttenier, 2020. "Natural resources and the salience of ethnic identities," NOVAFRICA Working Paper Series wp2007, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    17. Nemera Gebeyehu Mamo, 2018. "Essays on natural resources in Africa: local economic development, multi-ethnic coalitions and armed conflict," Economics PhD Theses 0518, Department of Economics, University of Sussex Business School.
    18. Mélanie Gittard & Irène Hu, 2024. "MiningLeaks Water Pollution and Child Mortality in Africa," CIRED Working Papers halshs-04685390, HAL.
    19. Bonilla Mejía, Leonardo, 2020. "Mining and human capital accumulation: Evidence from the Colombian gold rush," Journal of Development Economics, Elsevier, vol. 145(C).
    20. Odmaa Narantungalag,, 2022. "The effects of natural resource extraction on household expenditure patterns: Evidence from Mongolia," Discussion Papers 2204, School of Economics and Finance, Massey University, New Zealand.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:180:y:2024:i:c:s0305750x24000755. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.