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Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa

Listed author(s):
  • Nemera Mamo
  • Sambit Bhattacharya
  • Alexander Moradi
  • Rabah Arezki

What are the economic consequences of mining in Sub-Saharan Africa? Using a panel of 3,635 districts from 42 Sub-Saharan African countries for the period 1992 to 2012 we investigate the effects of mining on living standards measured by night-lights. Night-lights increase in mining districts when mineral production expands (intensive margin), but large effects approximately equivalent to 16% increase in GDP are mainly associated with new discoveries and new production (extensive margin). We identify the effect by carefully choosing feasible but not yet mined districts as a control group. In addition, we exploit giant and major mineral discoveries as exogenous news shocks. In spite of the large within district effects, there is little evidence of significant spillovers to other districts reinforcing the enclave nature of mines in Africa. Furthermore, the local effects disappear after mining activities come to an end which is consistent with the ’resource curse’ view.

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File URL: http://www.csae.ox.ac.uk/workingpapers/pdfs/csae-wps-2017-05.pdf
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Paper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2017-05.

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Date of creation: 2017
Handle: RePEc:csa:wpaper:2017-05
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