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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

Listed:
  • Rémi Bazillier

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Victoire Girard

    (LEO - Laboratoire d'Économie d'Orleans [FRE2014] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique, NOVA SBE - NOVA - School of Business and Economics - NOVA - Universidade Nova de Lisboa = NOVA University Lisbon)

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 mining. Artisanal mines have a bad reputation. When these mines (labor intensive and managed in common) compete for land with industrial mines (capital intensive and privatized), governments tend to favor the latter. However, more than 100 million people depend on artisanal mines for a livelihood. 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 0.12% for households near artisanal mines. Opening an industrial mine, in contrast, has no impact on local consumption.

Suggested Citation

  • Rémi Bazillier & Victoire Girard, 2020. "The Gold Digger and the Machine. Evidence on the Distributive Effect of the Artisanal and Industrial Gold Rushes in Burkina Faso," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-02348439, HAL.
    • Handle: RePEc:hal:cesptp:halshs-02348439
    DOI: 10.1016/j.jdeveco.2019.102411
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-02348439
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    More about this item

    Keywords

    Artisanal mining; Gold; Extractive industries; Commons; Burkina Faso; Poverty;
    All these keywords.

    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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