The Local Impact of Mining on Poverty and Inequality: Evidence from the Commodity Boom in Peru

Norman Loayza () and Iamele Rigolini

No 33, Working Papers from Peruvian Economic Association

Abstract: This paper studies the impact of mining activity on socioeconomic outcomes in local communities in Peru. In the last two decades, the value of Peruvian mining exports has grown by fifteen times; and since a decade ago, one-half of fiscal revenues from mining have been devolved to local governments in producing regions. Has this boom benefitted people in local communities? We find evidence that producing districts have larger consumption per capita and lower poverty rates than otherwise similar districts. However, these positive impacts decrease drastically with administrative and geographic distance from mining centers. Moreover, consumption inequality within producing districts is higher than in comparable nonproducing districts. This dual effect of mining is partially accounted for by the better educated immigrants required and attracted by mining activity. The inequalizing impact of mining, both across and within districts, may explain the social discontent with mining in Peru, despite its enormous revenues.

Keywords: Natural resources; Mining; Poverty; Inequality; Commodity Boom; Peru (search for similar items in EconPapers)
JEL-codes: D7 H7 O1 Q3 (search for similar items in EconPapers)
Date: 2015-03
New Economics Papers: this item is included in nep-dev, nep-lam and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: The Local Impact of Mining on Poverty and Inequality: Evidence from the Commodity Boom in Peru (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:apc:wpaper:2015-033

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