Political economy of the mining sector in Ghana
AbstractWith a focus on the institutional set-up and the political environment as central to understanding and rectifying the poor impact of mining on Ghana's economic development, this paper highlights the vulnerabilities in mining sector governance along the industry value chain. The authors explain why it has been difficult to implement policies that would have improved social welfare. They find that incentive problems in institutions directly or peripherally involved in mining governance are a major factor, as are an excessively centralized policy-making process, a powerful executive president, strong party loyalty, a system of political patronage, lack of transparency, and weak institutional capacity at the political and regulatory levels. The paper argues that the net impact of mining on economic development is likely to be enhanced with appropriate reforms in governance. Most importantly, there should be a greater awareness of incentive problems at the political level and their possible implications for sector performance and the economy at large. The set of checks and balances, as stipulated by the Constitution, have to be reinforced. Furthermore, capacity building at different levels and institutions is needed and should be combined with efforts to enhance incentives for institutional performance.
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Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 5730.
Date of creation: 01 Jul 2011
Date of revision:
National Governance; Environmental Economics&Policies; Public Sector Corruption&Anticorruption Measures; Mining&Extractive Industry (Non-Energy); Governance Indicators;
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-08-02 (Africa)
- NEP-ALL-2011-08-02 (All new papers)
- NEP-DEV-2011-08-02 (Development)
- NEP-HME-2011-08-02 (Heterodox Microeconomics)
- NEP-POL-2011-08-02 (Positive Political Economics)
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- Teschner, Benjamin A., 2012. "Small-scale mining in Ghana: The government and the galamsey," Resources Policy, Elsevier, vol. 37(3), pages 308-314.
- Boakye, Daniel & Dessus, Sebastien & Foday, Yusuf & Oppong, Felix, 2012. "Investing mineral wealth in development assets : Ghana, Liberia and Sierra Leone," Policy Research Working Paper Series 6089, The World Bank.
- Ousman Gajigo & Emelly Mutambatsere & Guirane Samba Ndiaye, 2012. "Working Paper 147 - Gold Mining in Africa-Maximizing Economic Returns for Countries," Working Paper Series 378, African Development Bank.
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