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The gold digger and the machine evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso

Author

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  • Remi Bazillier
  • Victoire Girard

Abstract

This paper uses a quasi-natural experiment, the recent gold boom in Burkina Faso, to document the local impact of two alternative mining techniques: artisanal and industrial mines. Artisanal mines have a bad reputation. When these mines (managed in commons) compete for land with industrial mines (privatized), governments tend to favor industries. However, more than 100 million people depend on artisanal mines for their livelihoods. Our identification strategy exploits two sources of variation. The spatial variation comes from the exposure of households to different geological endowments, and the temporal variation comes from changes in the global gold price. We are the first to document the economic impact of artisanal mines. We show that a 1% increase in the gold price increases consumption by 0.15% for households neighboring artisanal mines. Opening an industrial mine, in contrast, has no impact on local consumption.

Suggested Citation

  • Remi Bazillier & Victoire Girard, 2019. "The gold digger and the machine evidence on the distributive effect of the artisanal and industrial gold rushes in Burkina Faso," NOVAFRICA Working Paper Series wp1901, Universidade Nova de Lisboa, Nova School of Business and Economics, NOVAFRICA.
    • Handle: RePEc:unl:novafr:wp1901
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    JEL classification:

    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • L72 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Mining, Extraction, and Refining: Other Nonrenewable Resources
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q33 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Resource Booms (Dutch Disease)
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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