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Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa

Nemera Mamo (), Sambit Bhattacharyya, Alexander Moradi () and Rabah Arezki ()
Additional contact information
Rabah Arezki: Research Department, IMF

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: What are the economic consequences of mining in Sub-Saharan Africa? Using a panel of 3,635 districts from 42 Sub-Saharan African countries for the period 1992 to 2012 we investigate the effects of mining on living standards measured by night-lights. Night-lights increase in mining districts when mineral production expands (intensive margin), but large effects approximately equivalent to 16% increase in GDP are mainly associated with new discoveries and new production (extensive margin). We identify the effect by carefully choosing feasible but not yet mined districts as a control group. In addition, we exploit giant and major mineral discoveries as exogenous news shocks. In spite of the within district large effects, there is little evidence of significant spillovers to other districts reinforcing the enclave nature of mines in Africa. Furthermore, the local effects disappear after mining activities come to an end which is consistent with the ’resource curse’ view.

Keywords: mineral discovery; mineral production; night-time lights (search for similar items in EconPapers)
JEL-codes: O11 O13 Q32 (search for similar items in EconPapers)
Date: 2017-03
New Economics Papers: this item is included in nep-dev
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Related works:
Journal Article: Intensive and extensive margins of mining and development: Evidence from Sub-Saharan Africa (2019) Downloads
Working Paper: Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa (2017) Downloads
Working Paper: Intensive and Extensive Margins of Mining and Development: Evidence from Sub-Saharan Africa* (2017) Downloads
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