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The response of illegal mining to revealing its existence

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  • Saavedra, S

Abstract

New monitoring technologies can help curb illegal activities by reducing informa- tion asymmetries between enforcing and monitoring government agents. I created a novel dataset using machine learning predictions on satellite imagery that detects illegal mining. Then I disclosed the predictions to government agents to study the response of illegal activity. I randomly assigned municipalities to one of four groups: (1) information to the observer (local government) of potential mine locations in his jurisdiction; (2) information to the enforcer (National government) of potential mine locations; (3) information to both observer and enforcer, and (4) a control group, where I informed no one. The effect of information is relatively similar regardless of who is informed: in treated municipalities, illegal mining is reduced by 11% in the disclosed locations and surrounding areas. However, when accounting for negative spillovers — increases in illegal mining in areas not targeted by the information — the net reduction is only 7%. These results illustrate the benefits of new technologies for building state capacity and reducing illegal activity.

Suggested Citation

  • Saavedra, S, 2022. "The response of illegal mining to revealing its existence," Documentos de Trabajo 20078, Universidad del Rosario.
    • Handle: RePEc:col:000092:020078
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    References listed on IDEAS

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    More about this item

    Keywords

    Illegal mining; Monitoring Technology; Colombia;
    All these keywords.

    JEL classification:

    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling

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