Mining and quality of public services: The role of local governance and decentralization

• Published in: World development Vol. 140; p. 105350
• Main Authors: Konte, Maty, Vincent, Rose Camille
• Format: Journal Article
• Language: English
• Published: Oxford Elsevier Ltd 01-04-2021; Elsevier Science Publishers; Pergamon Press Inc; Elsevier
• Subjects: Africa; Bribery; Corruption; Data mining; Decentralization; Economics and Finance; Enumeration; Environmental studies; Governance; Humanities and Social Sciences; Job creation; Living conditions; Local authorities; Local governance; Local government; Low level; Metals; Methods and statistics; Mineral industry; Miners; Mines; Mining; Mining industry; Occupational health; Optimism; Proximity; Public goods; Public officials; Public services; Residents; Respondents; Revenue; Rights; Social service; Standard of living; Taxation; Mining; O550; Local governance; Africa; Decentralization; H410; Q000; Public services; H700
• ISSN: 0305-750X; 1873-5991
• DOI: 10.1016/j.worlddev.2020.105350

•Citizens who live near an active mine are less likely to approve government performance in key public goods and services.•Local corruption exacerbates the negative effects of proximity to active or inactive mines.•We find a positive moderating role of local authorities’ discretion over tax and revenues.•The positive moderating role of local taxing powers tends to reduce in environments with poor quality of local governance.
This paper investigates the local effects of mining on the quality of public services and on people’s optimism about their future living conditions in Africa. Most importantly, it assesses the moderating role of local institutions and local governments’ taxing rights in shaping the proximity-to-mine effects. The empirical framework connects more than 130,000 respondents from the Afrobarometer survey data (2005–2015) to their closest mines based on the geolocation coordinates of the enumeration areas (EA) and data on the mines and their respective status from the SNL Metals & Mining by the S&P. The geo-referenced data are matched with new indicators on local governments’ taxing rights across the African continent. Using a difference-in-differences strategy, the results indicate that citizens living near an active mine are less likely to approve government performance in key public goods and services – including health, job creation and improving living standards of the poor. On the moderating role of local governance and local taxing rights, the findings point to a negative impact of local corruption, yet a positive impact of local authorities’ discretion over tax and revenues. However, the positive impact of local taxing powers tends to reduce in environments with poor quality of local governance, high incidence of bribe payment and low level of trust in local government officials. Residents of mining communities with low corruption and comparatively high-level of raising revenue ability have the highest rate of positive appraisal compared to the other scenarios.