Few linkages, plenty of conflict: The resource curse in the periphery’s periphery

• In Event: The subnational resource curse in the Andes: Empirical evidence and policy implications

Abstract

Curses and blessings of resource-based development are unevenly distributed across space in the resource-based periphery. Thanks to the mining boom beginning in the mid-1990s, which was largely concentrated in the Andean mountains, Peru (a resource-based national economy in the periphery) has experienced one of the highest rates of economic growth in Latin America over the last two decades. However, we show evidence that characterizes the mining boom as a “curse” for Peru’s mining districts, where approximately 40% of families depend on agriculture and cattle activities. Comparing mining districts with suitable counterfactuals, we find that mining development has not improved economic conditions of farmers, and has also managed to worsen political conditions by inciting local conflict. Findings cannot be insightfully understood without taking into account the institutional environment shaping mining development. Economic development of the last two decades can be argued to be a blessing for Peru’s rentist center, at least while the boom lasts, but a curse for its resource periphery. We provide an integrative analytical framework of the resource curse to revise and problematize the findings, stressing the centrality of institutions and place.

Author

• Jose Carlos Orihuela Paredes, Pontificia Universidad Católica del Perú