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A tale of gold and blood: The consequences of market deregulation on local violence

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  • Pereira, Leila
  • Pucci, Rafael

Abstract

We investigate how deregulating and disabling a decentralized structure for monitoring gold transactions in Brazil ultimately led to an increase in violence related to illegal gold mining. We use a Difference-in-Differences design and a unique database that combines the location of gold deposits and protected areas, where mining is forbidden. We demonstrate that municipalities more exposed to illegal gold mining experienced almost ten additional homicides per 100,000 people - roughly 30 % more - after the deregulation. We also find suggestive evidence of more gold-mining land use inside protected areas in exposed municipalities, which serves as an indicator of illegal mining.

Suggested Citation

  • Pereira, Leila & Pucci, Rafael, 2026. "A tale of gold and blood: The consequences of market deregulation on local violence," Journal of Public Economics, Elsevier, vol. 253(C).
    • Handle: RePEc:eee:pubeco:v:253:y:2026:i:c:s0047272725002580
    DOI: 10.1016/j.jpubeco.2025.105559
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    JEL classification:

    • Q34 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Natural Resources and Domestic and International Conflicts
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions
    • 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
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources

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