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Mining Revenues and Institutional Weakness: The Political Economy of the DRC’s 0.3% Community Development Fund

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  • Ngunza Maniata, Kevin
  • Mukadi Mukandila, Caleb Bonyi

Abstract

This paper analyzes the Democratic Republic of the Congo’s (DRC) legal requirement that mining companies allocate 0.3 percent of annual turnover to local community development. Drawing on the 2025 audit of forty-four community development funds by the Court of Auditors, the study reveals systematic underreporting of revenues, delayed or missing payments, weak financial management, and the absence of sanctions between 2018 and 2023. Using institutional economics and principal–agent theory, it shows how asymmetric information, misaligned incentives, and political interference undermine the system’s effectiveness. Comparative evidence from Peru’s canon minero and Ghana’s Mineral Development Fund demonstrates that success depends less on legal design than on credible verification, coordination, and community oversight. The paper proposes reforms to strengthen enforcement, transparency, and accountability in the DRC’s mining governance framework.

Suggested Citation

  • Ngunza Maniata, Kevin & Mukadi Mukandila, Caleb Bonyi, 2025. "Mining Revenues and Institutional Weakness: The Political Economy of the DRC’s 0.3% Community Development Fund," MPRA Paper 126499, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:126499
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    References listed on IDEAS

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    1. Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
    2. Anthony Bebbington & Leonith Hinojosa & Denise Humphreys Bebbington & Maria Luisa Burneo & Ximena Warnaars, 2008. "Contention and Ambiguity: Mining and the Possibilities of Development," Global Development Institute Working Paper Series 5708, GDI, The University of Manchester.
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    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)

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