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Mining and mistrust in government

Astghik Mavisakalyan and Anna Minasyan

European Economic Review, 2025, vol. 175, issue C

Abstract: Natural resource extraction can undermine institutions through its negative impact on corruption and public goods provision, potentially affecting individual trust in local government. We examine this conjecture by combining geo-referenced survey data with spatial data on mine locations across 28 post-communist countries of Central and Eastern Europe and the former Soviet Union. Using information on the development status of mineral reserves, we employ a cross-sectional difference-in-differences approach comparing individuals living near active versus not-yet-active mines. Our findings reveal a robust negative relationship between mining production and trust in local government. Analysis of mechanisms indicates that corruption perceptions and practices primarily drive this relationship. While examining alternative non-institutional channels, we find that environmental concerns may also contribute to government mistrust in specific contexts.

Keywords: Natural resources; Mining; Trust; Institutions; Corruption; Post-communist countries (search for similar items in EconPapers)
JEL-codes: D72 L72 O13 P28 Q32 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:175:y:2025:i:c:s0014292125000522

DOI: 10.1016/j.euroecorev.2025.105002

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