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Concession Stands: How Mining Investments Incite Protest in Africa

  • Darin Christensen
Abstract

Foreign investment in Africa's mineral resources has increased dramatically. This paper addresses three questions raised by this trend: do commercial mining investments increase the likelihood of social or armed conflict? If so, when are these disputes most prevalent? And, finally, what mechanisms help explain these conflicts? I show, first, that mining has contrasting effects on social and armed conflict: while the probability of protests or riots increases (roughly doubling) after mining starts, there is no increase in rebel activity. Second, I show that the probability of social conflict rises with plausibly exogenous increases in world commodity prices. Finally, I compile additional geo-spatial and survey data to explore potential mechanisms, including reporting bias, environmental harm, in-migration, inequality, and governance. Finding little evidence consistent with these accounts, I develop an explanation related to incomplete information—a common cause of conflict in industrial and international relations. This mechanism rationalizes why mining induces protest, why these conflicts are exacerbated by rising prices, and why transparency dampens the relationship between prices and protest.

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I am very grateful to Avidit Acharya, Graeme Blair, Gabriel Carroll, Katherine Casey, Gary Cox, Mathilde Emeriau, James Fearon, Teevrat Garg, Francisco Garfias, Grant Gordon, Guy Grossman, Robert Gulotty, Stephen Haber, Andrew Hall, Jens Hainmueller, David Hausman, Witold Henisz, Dorothy Kronick, David Laitin, Duncan Lawrence, Agustina Paglayan, Ramya Parthasarathy, Jonathan Rodden, Michael Ross, Kenneth Scheve, Renard Sexton, Jacob Shapiro, Jeremy Weinstein, Martin Williams, and Wes Yin for discussing earlier drafts. I also benefited from feedback received at APSA 2015, the 2016 Strategy and the Business Environment Conference, the 2016 Empirical Studies of Conflict Conference, and from audiences at Chicago's Harris School, UCLA's Luskin School, UC Riverside's Applied Microeconomics Seminar, the University of Rochester, and International Organization’s editorial team.

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