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Mining and mistrust in government

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  • Mavisakalyan, Astghik
  • Minasyan, Anna

Abstract

Natural resource extraction can undermine institutions through its negative impact on corruption and public goods provision, potentially affecting individual trust in local government. We examine this conjecture by combining geo-referenced survey data with spatial data on mine locations across 28 post-communist countries of Central and Eastern Europe and the former Soviet Union. Using information on the development status of mineral reserves, we employ a cross-sectional difference-in-differences approach comparing individuals living near active versus not-yet-active mines. Our findings reveal a robust negative relationship between mining production and trust in local government. Analysis of mechanisms indicates that corruption perceptions and practices primarily drive this relationship. While examining alternative non-institutional channels, we find that environmental concerns may also contribute to government mistrust in specific contexts.

Suggested Citation

  • Mavisakalyan, Astghik & Minasyan, Anna, 2025. "Mining and mistrust in government," European Economic Review, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:eecrev:v:175:y:2025:i:c:s0014292125000522
    DOI: 10.1016/j.euroecorev.2025.105002
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    More about this item

    Keywords

    Natural resources; Mining; Trust; Institutions; Corruption; Post-communist countries;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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