Local content policies in mineral-exporting countries

Jane Korinek () and Isabelle Ramdoo
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Isabelle Ramdoo: European Centre for Development Policy Management

No 209, OECD Trade Policy Papers from OECD Publishing

Abstract: Resource abundance does not always bring sustained economic growth and development. Moreover, the mining sector generally provides little direct employment in the regions where extraction occurs. In an attempt to derive greater benefits from their resource endowments, and increase linkages with other parts of the economy, some minerals-rich countries have instituted local content and procurement policies (LCPs). The benefits sought include employment generation, supply chain development and technological and knowledge transfers. Measures that aim to increase local content and procurement in the extractive industries are common, including in many OECD countries.This study examines local content policies in 10 minerals-rich countries and provides some observations about their efficacy and the desirability of their use. A wide range of measures are examined, from industry-wide, mandatory quantitative targets to voluntary initiatives undertaken at the firm level, encompassing diverse policy objectives and implementation strategies. The range of countries covered is broad including OECD countries, developing countries and least developed countries. The study does not recommend a “one size fits all” policy mix but guards against the distortions created by overly prescriptive, mandatory local content requirements.

Keywords: extractive industries; Local procurement; mining; performance requirements; supply chains (search for similar items in EconPapers)
JEL-codes: F1 F13 O24 O33 Q32 Q37 Q38 R11 (search for similar items in EconPapers)
Date: 2017-12-15
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:oec:traaab:209-en

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