A Tale of Gold and Blood: The Consequences of Market Deregulation on Local Violence

Leila Pereira () and Rafael Pucci ()

No 2024_18, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: We investigate how a private market deregulation affected the incentives for monitoring gold transactions in Brazil, ultimately leading to an increase in illegal gold mining and violence. Employing a Difference-in-Differences design and a unique database that combines the geological occurrence of gold deposits and protected areas, where mining is forbidden, we first show that the deregulation encouraged illegal gold mining. We use high-resolution data on deforestation as a proxy for illegal mining activity. Then, we demonstrate that municipalities more exposed to illegal gold mining experienced almost eleven additional homicides per 100,000 people - roughly 30% more - after the deregulation.

Keywords: Monitoring; Violence; Illegal mining; Deforestation; Amazon (search for similar items in EconPapers)
JEL-codes: D74 K42 L72 O13 O17 Q34 (search for similar items in EconPapers)
Date: 2024-06-21
New Economics Papers: this item is included in nep-dev and nep-law
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Citations: View citations in EconPapers (1)

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