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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.

Suggested Citation

  • 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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    Cited by:

    1. Nemera Mamo & Sambit Bhattacharyya & Alexander Moradi & Rabah Arezki, 2017. "Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa," Working Paper Series 0517, Department of Economics, University of Sussex Business School.
    2. Rémi BAZILLIER & Victoire GIRARD, 2017. "The gold digger and the machine. Evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso," LEO Working Papers / DR LEO 2545, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    3. 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.

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