Poverty, Inequality, and the Local Natural Resource Curse
AbstractThe extent to which local communities benefit from commodity booms has been subject to wide but inconclusive investigations. This paper draws from a new district-level database to investigate the local impact on socioeconomic outcomes of mining activity in Peru, which grew almost twentyfold in the last two decades. We find evidence that producing districts have better average living standards than otherwise similar districts: larger household consumption, lower poverty rate, and higher literacy. However, the positive impacts from mining decrease significantly with administrative and geographic distance from the mine, while district-level consumption inequality increases in all districts belonging to a producing province. The inequalizing impact of mining activity, both across and within districts, may explain part of the current social discontent with mining activities in the country, even despite its enormous revenues.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7226.
Length: 30 pages
Date of creation: Feb 2013
Date of revision:
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Other versions of this item:
- 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.
- D7 - Microeconomics - - Analysis of Collective Decision-Making
- H7 - Public Economics - - State and Local Government; Intergovernmental Relations
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
- Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
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