Mining, Ethnic Inequality and Conflict in Sub-Saharan Africa

• In Event: The Economics of Violence

Abstract

The most recent African commodity boom raises the question whether local communities benefit or suffer from mining operations. A recent empirical literature credibly shows an increased risk of political violence in mining regions. The causal mechanisms behind these findings as well as their scope conditions remain less well understood. In this paper, we study the role of ethnic inequalities as one channel through which mining may affect violent conflict. We first investigate whether new mining operations exacerbate inequalities between identity groups at both the national and more local levels. We combine rich subnational data on the location of active mines with geocoded survey data on individual well-being to better understand the distributional consequences of mining. We then move on to testing whether high pre-existing levels of economic and political inequality between groups moderate the effect of mineral extraction on violent events. Both sets of analyses employ difference-in-differences and instrumental variable strategies to identify causal effects. The IV combines a host of plausibly exogenous geological variables with machine learning tools to predict mining operations. Preliminary findings suggest that mining does not benefit all groups to the same extent and that it has stronger conflict-inducing effects in politically excluded and relatively poor ethnic home regions.

Authors

• Yannick Immanuel Pengl, ETH Zurich

• Philipp Hunziker, Northeastern University

• Lars-Erik Cederman, ETH Zurich