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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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    File URL: http://hdl.handle.net/10.1093/jeg/lbw015
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    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. Ryan B. Edwards, 2024. "Spillovers from agricultural processing," Departmental Working Papers 2024-6, The Australian National University, Arndt-Corden Department of Economics.
    11. 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).
    12. Aguilar-Gomez, Sandra & Benshaul-Tolonen, Anja, 2023. "The evolution and persistence of women's roles: Evidence from the Gold Rush," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 364-381.
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    14. Edgar Salgado Chavez, 2018. "The Heterogeneous Local Labour Effects of Mining Booms," Working Paper Series 0718, Department of Economics, University of Sussex Business School.
    15. 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.
    16. 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.
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