The effects of mining on local poverty in developing countries: Evidence from Mali

• Published in: World development 2024-08, Vol.180, p.106605, Article 106605
• Main Authors: Coulibaly, Massa, Foltz, Jeremy, Parker, Dominic, Olurotimi, Osaretin, Traoré, Nouhoum
• Format: Article
• Language: English
• Subjects: Economics of natural resources; Gold mining; Mining; Resource curse; West Africa
• ISSN: 0305-750X
• DOI: 10.1016/j.worlddev.2024.106605

Recent within-country studies of the ‘resource curse’ call into question whether mining booms benefit local populations living near mineral endowments in developing countries. In particular, mining booms have been associated with increased violence, localized inflation, increased poverty, and increased inequality. Relying on volatile gold prices that have caused mining booms in West African countries (Ghana, Burkina Faso, and Mali) since the mid-2000s, we test whether these booms have increased or decreased poverty and expenditure among populations that live near the mines. Based on detailed household panel data from Mali, our results generally show positive effects of gold price booms on households. Household expenditure increased, and poverty decreased during years of high gold prices for formal and artisanal mining areas, with artisanal mining having a stronger beneficial effect. The results suggest the booms have been more of an economic blessing than a curse in Mali. •We contribute new evidence on the economics of formal and informal mining in Africa.•We find positive effects of gold prices on households near artisanal and formal mines.•The results suggest positive economic spillovers from gold mining in West Africa.