Spill-Overs of a Resource Boom: Evidence from Zambian Copper Mines
AbstractDo local populations bene t from resource booms? How strong are market linkages between the mining sector and the regional economy? This paper exploits exogenous variation in mine-level pro duction volumes generated by the recent copper boom in Zambia to shed light on these questions.Using a novel dataset, I nd robust evidence that an increase in local copper production improves living standards in the surroundings of the mines even for households not directly employed in the mining sector: a 10% increase in constituency-level copper output is associated with a 2% increase in real household expenditure; positive e ects on housing conditions, consumer durable ownership and child health are of similar magnitude. The positive spill-overs extend to the rural hinterland of mining cities, neighboring constituencies, and constituencies on the copper transportation route. Additionally,I identify boom-induced changes in the demand for services and agricultural products as key channels through which the urban and rural populations bene t from the mine expansions. Since the boom failed to generate scal revenues, these e ects can be interpreted as the result of the mines' backward linkages. Taken together, these ndings highlight the welfare potential of local procurement policies in resource rich developing countries.
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Bibliographic InfoPaper provided by Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford in its series OxCarre Working Papers with number 131.
Date of creation: 2014
Date of revision:
Commodity Shocks; Local Development; Mining; Natural Resources;
Find related papers by JEL classification:
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
- Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-05-24 (All new papers)
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