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Gold mining and proto-urbanization: recent evidence from Ghana

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  • Marcel Fafchamps
  • Michael Koelle
  • Forhad Shilpi

Abstract

Central place theory predicts that agglomeration can arise from external shocks. We investigate whether gold mining is a catalyst for early stages of urbanization in rural Ghana. We call this phenomenon proto-urbanization. Using cross-sectional data, we find that locations with gold mines exhibit most of the tell-tale signs of proto-urbanization. They have higher population densities, and they are also sites where more sophisticated forms of economic activity agg3lomerate. These findings are consistent with agglomeration effects that induce non-farm activities to coalesce in a particular location. Over time, we find that an increase in gold production is associated with more specialization, but not with a clear sectoral transformation of employment. We also find that the changes arising from increasing gold production are not reversed when large gold mines shrink. Rather, they continue to become more consistent with processes of structural transformation.

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  • Marcel Fafchamps & Michael Koelle & Forhad Shilpi, 2017. "Gold mining and proto-urbanization: recent evidence from Ghana," Journal of Economic Geography, Oxford University Press, vol. 17(5), pages 975-1008.
    • Handle: RePEc:oup:jecgeo:v:17:y:2017:i:5:p:975-1008.
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    3. Mamo, Nemera & Bhattacharyya, Sambit & Moradi, Alexander, 2019. "Intensive and extensive margins of mining and development: Evidence from Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 139(C), pages 28-49.
    4. Anja Tolonen, 2019. "Endogenous Gender Roles: Evidence from Africa’s Gold Mining Industry," OxCarre Working Papers 209, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    5. Ralph De Haas & Steven Peolhekke, 2016. "Mining Matters: Natural Resource Extraction," OxCarre Working Papers 175, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    6. Balza, Lenin H. & De Los Rios, Camilo & Guerra, Alfredo & Herrera-Prada, Luis Omar & Manzano, Osmel, 2023. "Unraveling the network of extractive industries," Resources Policy, Elsevier, vol. 85(PB).
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    8. Fafchamps,Marcel & Shilpi,Forhad J., 2020. "The Evolution of Built-up Areas in Ghana since 1975," Policy Research Working Paper Series 9314, The World Bank.
    9. Chuhan-Pole,Punam & Dabalen,Andrew L. & Kotsadam,Andreas & Sanoh,Aly & Tolonen,Anja Karolina & Chuhan-Pole,Punam & Dabalen,Andrew L. & Kotsadam,Andreas & Sanoh,Aly & Tolonen,Anja Karolina, 2015. "The local socioeconomic effects of gold mining : evidence from Ghana," Policy Research Working Paper Series 7250, The World Bank.
    10. Tony Addison & Amadou Boly & Anthony Mveyange, 2016. "Mining and economic development: Did China's WTO accession affect African local economic development?," WIDER Working Paper Series wp-2016-141, World Institute for Development Economic Research (UNU-WIDER).
    11. Saumik Paul & Dhushyanth Raju, 2024. "Mining spillovers and the formal-informal duality in manufacturing and services," WIDER Working Paper Series wp-2024-6, World Institute for Development Economic Research (UNU-WIDER).
    12. Edgar Salgado Chavez, 2018. "The Heterogeneous Local Labour Effects of Mining Booms," Working Paper Series 0718, Department of Economics, University of Sussex Business School.
    13. Salgado Chavez, Edgar, 2017. "Essays on beliefs, democracy and local labor markets: an empirical examination for Peru," Economics PhD Theses 0717, Department of Economics, University of Sussex Business School.
    14. De Haas, Ralph & Poelhekke, Steven, 2019. "Mining matters: Natural resource extraction and firm-level constraints," Journal of International Economics, Elsevier, vol. 117(C), pages 109-124.
    15. Addison,Tony & Boly,Amadou & Mveyange,Anthony Francis, 2016. "Mining and economic development : did China's WTO accession affect African local economic development ?," Policy Research Working Paper Series 7906, The World Bank.
    16. Guimbeau, Amanda & Ji, Xinde James & Menon, Nidhiya & Rodgers, Yana van der Meulen, 2023. "Mining and women’s agency: Evidence on acceptance of domestic violence and shared decision-making in India," World Development, Elsevier, vol. 162(C).

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