Hostname: page-component-76fb5796d-25wd4 Total loading time: 0 Render date: 2024-04-25T08:20:57.364Z Has data issue: false hasContentIssue false
  • English
  • Français

Concession Stands: How Mining Investments Incite Protest in Africa

Published online by Cambridge University Press:  02 October 2018

Darin Christensen
Get access

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.

Type
Research Article
Information
International Organization , Volume 73 , Issue 1 , Winter 2019 , pp. 65 - 101
Copyright
Copyright © The IO Foundation 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

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.

References

Accenture. 2011. Global Operating Models for Mining Companies. Technical Report. Available at <https://www.accenture.com/t20150527T211403__w__/jp-ja/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Local/ja-jp/PDF_2/Accenture-Mining-Global-Operating-Models-POV-FINAL.pdf>..>Google Scholar
Admati, Anat R., and Perry, Motty. 1987. Strategic Delay in Bargaining. The Review of Economic Studies 54 (3):345–64.Google Scholar
Andersen, Jorgen J., and Ross, Michael L.. 2014. The Big Oil Change: A Closer Look at the Haber-Menaldo Analysis. Comparative Political Studies 47 (7):993–1021.Google Scholar
Autor, David H. 2003. Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing. Journal of Labor Economics 21 (1):1–42.Google Scholar
Axbard, Sebastian, Poulsen, Jonas, and Tolonen, Anja. 2015. Extractive Industries, Production Shocks, and Criminality: Evidence from a Middle-Income Country. Working Paper. Available at <http://cega.berkeley.edu/assets/miscellaneous_files/25-ABCA_-draft_mining_january16-2015.pdf>..>Google Scholar
Baron, David P. 2003. Private Politics. Journal of Economics and Management Strategy 12 (1):31–66.Google Scholar
Baron, David P., and Diermeier, Daniel. 2007. Strategic Activism and Nonmarket Strategy. Journal of Economics and Management Strategy 16 (3):599–634.Google Scholar
Bazzi, Samuel, and Blattman, Christopher. 2014. Economic Shocks and Conflict: Evidence from Commodity Prices. American Economic Journal: Macroeconomics 6 (4):1–38.Google Scholar
Bebbington, Anthony, Hinjosa, Leonith, Bebbington, Denise H., Bureno, Maria Luisa, and Warnaars, Ximena. 2008. Protest Is Always Hopeful: Examining the Third Wave of Popular Protest in Africa. Development and Change 39 (6):1–28.Google Scholar
Bebbington, Anthony, Bebbington, Denise Humphreys, Bury, Jeffrey, Lingan, Jeannet, Muñoz, Juan Pablo, and Scurrah, Martin. 2008. Mining and Social Movements: Struggles Over Livelihood and Rural Territorial Development in the Andes. World Development 36 (12):2888–905.Google Scholar
Bebbington, Anthony, and Williams, Mark. 2008. Water and Mining Conflicts in Peru. Mountain Research and Development 28 (3):190–5.Google Scholar
Berman, Nicolas, Couttenier, Mathieu, Rohner, Dominic, and Thoenig, Mathias. 2017. This Mine Is Mine! How Minerals Fuel Conflicts in Africa. American Economic Review 107 (6):1564–610.Google Scholar
Biglaiser, Glen, Li, Quan, Malesky, Edmund, Pinto, Pablo, Pinto, Santiago, and Staats, Joseph L.. 2012. Politics and Foreign Direct Investment. Ann Arbor, MI: University of Michigan Press.Google Scholar
Boschee, Elizabeth, Lautenschlager, Jennifer, O'Brien, Sean, Shellman, Steve, Starz, James, and Ward, Michael. 2015. ICEWS Coded Event Data. Harvard Dataverse. Available at <https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/28075>..>Google Scholar
Branch, Adam, and Mampilly, Zachariah. 2015. Africa Uprising: Popular Protest and Political Change. London: Zed Books.Google Scholar
Brautigam, Deborah. 2009. The Dragon's Gift: The Real Story of China in Africa. Oxford: Oxford University Press.Google Scholar
Brückner, Markus, and Ciccone, Antonio. 2010. International Commodity Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa. The Economic Journal 120 (544):519–34.Google Scholar
Card, David. 1990. Strikes and Wages: A Test of an Asymmetric Information Model. The Quarterly Journal of Economics 105 (3):625–59.Google Scholar
Christie, Brian. 2013. All In Sustaining Cost Reporting—Gold Industry's New Standard? In Denver Gold Group Luncheon, 1–22. Denver: Agnico Eagle.Google Scholar
Collier, Paul, and Hoeffler, Anke. 2004. Greed and Grievance in Civil War. Oxford Economic Papers 56 (4):563–95.Google Scholar
Davis, Rachel, and Franks, Daniel. 2014. Costs of Company-Community Conflict in the Extractive Sector. Corporate Social Responsibility Initiative Report No. 66. Cambridge, MA: Harvard Kennedy School. Available at <https://sites.hks.harvard.edu/m-rcbg/CSRI/research/Costs%20of%20Conflict_Davis%20%20Franks.pdf>..>Google Scholar
De la Sierra, Raul Sanchez. 2014. On the Origin of States: Stationary Bandits and Taxation in Eastern Congo. Working Paper, 28 January. Available at <https://raulsanchezdelasierra.files.wordpress.com/2013/09/0-paper-1.pdf>..>Google Scholar
Dube, Oeindrilla, and Vargas, Juan F.. 2013. Commodity Price Shocks and Civil Conflict: Evidence from Colombia. The Review of Economic Studies 80 (4):1384–421.Google Scholar
Evans, Robin, and Kemp, Deanna. 2011. Community Issues. In SME Mining Engineering Handbook, edited by Peter Darling, 1768–78. Englewood, CO: Society for Mining, Metallurgy, and Exploration.Google Scholar
Farole, Thomas, and Winkler, Deborah. 2014. Making Foreign Direct Investment Work for Sub-Saharan Africa: Local Spillovers and Competitiveness in Global Value Chains. Washington: The World Bank.Google Scholar
Fearon, James D. 1995. Rationalist Explanations for War. International Organization 49 (3):379–414.Google Scholar
Fearon, James D., and Laitin, David D.. 2003. Ethnicity, Insurgency, and Civil War. American Political Science Review 97 (1):75–90.Google Scholar
Gassert, Francis, Landis, Matt, Luck, Matt, Reig, Paul, and Shiao, Tien. 2014. Aqueduct Global Maps 2.1. World Resources Institute Working Paper.Google Scholar
Global Data. 2015. Mining eTrack Data Set. Available at <https://mining.globaldata.com/>..>Google Scholar
Goldstuck, Alison, and Hughes, Tim. 2010. Securing a Social Licence to Operate? SAIIA Working Paper. Available at <http://www.saiia.org.za/research/securing-a-social-licence-to-operate-from-stone-age-to-new-age-mining-in-tanzania/>..>Google Scholar
Gurr, Ted Robert. 1971. Why Men Rebel. Princeton, NJ: Princeton University Press.Google Scholar
Haglund, Dan. 2008. Regulating FDI in Weak African States: A Case Study of Chinese Copper Mining in Zambia. The Journal of Modern African Studies 46 (4):547–75.Google Scholar
Harrison, Alan, and Stewart, Mark. 1994. Is Strike Behavior Cyclical? Journal of Labor Economics 14 (4): 524–33.Google Scholar
Henisz, Witold J. 2014. Corporate Diplomacy: Building Reputations and Relationships with External Stakeholders. New York: Greenleaf.Google Scholar
Hsu, Angel. 2016. 2016 Environmental Performance Index. Available at <https://epi.envirocenter.yale.edu/epi-downloads>..>Google Scholar
Human Rights Watch. 2014. Whose Development? Human Rights Abuses in Sierra Leone's Mining Boom. 19 February. Available at <https://www.hrw.org/report/2014/02/19/whose-development/human-rights-abuses-sierra-leones-mining-boom>..>Google Scholar
Humphreys, David. 2015. The Remaking of the Mining Industry. New York: Palgrave Macmillan.Google Scholar
International Council on Mining and Metals, Oxford Policy Management, and Raw Materials Group. 2014. The Role of Mining in National Economies. Technical Report.Google Scholar
Intierra RMG. 2015. IntierraLive Data Set.Google Scholar
Isaacs, Gilad, and Bowman, Andrew. 2014. Demanding the Impossible? Platinum Mining Profits and Wage Demands in Context. Research on Money and Finance Occasional Policy Papers . Available at <http://erensep.org/2014/06/04/demanding-the-impossible-platinum-mining-profits-and-wage-demands-in-context/>..>Google Scholar
Jamasmie, Cecilia. 2013. Illegal Gold Mining Profits for Rebels in Colombia Five Limes Larger than Cocaine. Mining.com, 24 June. Available at <http://www.mining.com/illegal-gold-mining-profits-for-rebels-in-colombia-five-times-larger-than-cocaine-68592/>..>Google Scholar
Jamasmie, Cecilia. 2015. Irish Kenmare Sends South African Miners in Mozambique Home over Xenophobia. Mining.com, 20 April. Available at <http://www.mining.com/irish-kenmare-sends-south-african-miners-in-mozambique-home-over-xenophobia/>..>Google Scholar
Jensen, Nathan. 2008. Political Risk, Democratic Institutions, and Foreign Direct Investment. The Journal of Politics 70 (4):1040–52.Google Scholar
Kaufmann, Daniel, Kraay, Aart, and Mastruzzi, Massimo. 2010. The Worldwide Governance Indicators: Methodology and Analytical Issues. Policy Research working paper no. WPS 5430. World Bank. Available at <https://openknowledge.worldbank.org/handle/10986/3913>..>Google Scholar
Kennan, John, and Wilson, Robert. 1993. Bargaining with Private Information. Journal of Economic Literature 31(1):45–104.Google Scholar
Knutsen, Carl Henrik, Kotsadam, Andreas, Olsen, Eivind Hammersmark, and Wig, Tore. 2016. Mining and Local Corruption in Africa. American Journal of Political Science 122 (2):1–50.Google Scholar
Kopas, Jacob, and Urpaleinen, Johannes. 2016. Explaining Protest Activity: Evidence from Anti-Mining Mobilization in Brazilian Municipalities. Working Paper.Google Scholar
Kotsadam, Andreas, and Tolonen, Anja. 2013. African Mining, Gender, and Local Employment. WGAPE Working Paper. Available at cega.berkeley.edu/assets/miscellaneous_files/Tolonen_Mining.pdf.Google Scholar
Leetaru, Kalev, and Schrodt, Philip A.. 2013. GDELT: Global Data on Events, Location and Tone, 1979–2012. Working Paper. Available at <http://data.gdeltproject.org/documentation/ISA.2013.GDELT.pdf>..>Google Scholar
Lujala, Päivi, Gleditsch, Nils Petter, and Gilmore, Elisabeth. 2005. A Diamond Curse? Civil War and a Lootable Resource. Journal of Conflict Resolution 49 (4):538–62.Google Scholar
Luong, Pauline Jones, and Weinthal, Erika. 2006. Rethinking the Resource Curse: Ownership Structure, Institutional Capacity, and Domestic Constraints. Annual Review of Political Science 9 (1):241–63.Google Scholar
McKenzie, David J. 2005. Measuring Inequality with Asset Indicators. Journal of Population Economics 18 (2):229–60.Google Scholar
Melander, Erik, and Sundberg, Ralph. 2012. UCDP Georeferenced Event Dataset. Uppsala Conflict Data Program.Google Scholar
Mensah, SethOpoku, and Okyere, Seth Asare. 2014. Mining, Environment and Community Conflicts. Journal of Sustainable Development Studies 5 (1):64–99.Google Scholar
Okeowo, Alexis. 2013. China, Zambia, and a Clash in a Coal Mine. The New Yorker, 9 October.Google Scholar
Osborne, Martin J., and Rubinstein, Ariel. 1990. Bargaining and Markets. San Diego: Academic Press.Google Scholar
PricewaterhouseCoopers (PwC). 2012. Mine: The Growing Disconnect. Technical Report. Available at <https://www.pwc.kz/en/publications/mine/mine-2012-eng.pdf>..>Google Scholar
PricewaterhouseCoopers (PwC). 2013. Mine: A Confidence Crisis. Technical Report. Available at <https://www.pwc.com/gx/en/mining/publications/assets/pwc-mine-a-confidence-crisis.pdf>..>Google Scholar
Raleigh, Clionadh, Linke, Andrew, and Dowd, Caitriona. 2014. Armed Conflict Location and Event Data Project 1–19. Codebook available at <https://www.acleddata.com/download/2827/>..>Google Scholar
Raleigh, Clionadh, Linke, Andrew, Hegre, Havard, and Karlsen, Joakim. 2010. Introducing ACLED: An Armed Conflict Location and Event Dataset. Journal of Peace Research 47 (5):651–60.Google Scholar
Raytheon BBN Technologies. 2015. BBN ACCENT Event Coding Evaluation. Technical report.Google Scholar
Robertson, Graeme B., and Teitelbaum, Emmanuel. 2011. Foreign Direct Investment, Regime Type, and Labor Protest in Developing Countries. American Journal of Political Science 55 (3):665–77.Google Scholar
Roessler, Philip. 2016. Ethnic Politics and State Power in Africa: The Logic of the Coup-Civil War Trap. Cambridge, UK: Cambridge University Press.Google Scholar
Ross, Michael L. 2004. What Do We Know About Natural Resources and Civil War? Journal of Peace Research 41 (3):337–56.Google Scholar
Ross, Michael L. 2006. A Closer Look at Oil, Diamonds, and Civil War. Annual Review of Political Science 9 (1): 265–300.Google Scholar
Ross, Michael L. 2015. What Have We Learned about the Resource Curse? Annual Reviewof Political Science 18 (1):239–59.Google Scholar
Rothgeb, John M. 1991. The Effects of Foreign Investment upon Political Protest and Violence in Underdeveloped Societies. The Western Political Quarterly 44 (1):9–38.Google Scholar
Rustad, Siri Aas, Le Billon, Philippe, and Lujala, Paivi. 2017. Has the Extractive Industries Transparency Initiative Been a Success? Identifying and Evaluating EITI Goals. Resources Policy 51:151–62.Google Scholar
Salehyan, Idean, Hendrix, Cullen S., Hamner, Jesse, Case, Christina, Linebarger, Christopher, Stull, Emily, and Williams, Jennifer. 2012. Social Conflict in Africa: A New Database. International Interactions 38 (4):503–11.Google Scholar
Sexton, Renard. 2018. A New Resource Curse: How Externalities and Governance Shape Social Conflict. Working Paper. Available at <https://www.dropbox.com/s/lhm5vpcu6ageki4/Extractives_Conflict_Governance_Apr2018.pdf?dl=1>..>Google Scholar
Shadmehr, Mehdi. 2014. Mobilization, Repression, and Revolution: Grievances and Opportunities in Contentious Politics. The Journal of Politics 76 (3):621–35.Google Scholar
SNL Financial. 2015. SNL Metals and Mining Data Set. Available at <https://www.snl.com/marketing/microsite/MEG/mm_pagetwo.html>..>Google Scholar
Steinberg, Jessica. 2015. Strategic Sovereignty. Journal of Conflict Resolution 60 (8):1503–28.Google Scholar
Stevens, Paul, Kooroshy, Jaakko, Lahn, Glada, and Lee, Bernice. 2013. Conflict and Coexistence in the Extractive Industries. A Chatham House Report. Available at <https://www.chathamhouse.org/publications/papers/view/195670>..>Google Scholar
Tracy, Joseph S. 1987. An Empirical Test of an Asymmetric Information Model of Strikes. Journal of Labor Economics 5 (2):149–73.Google Scholar
UNCTAD. 2013a. Foreign Direct Investment to Africa Increases, Defying Global Trend for 2012. Press Release, 25 June. Available at <http://unctad.org/en/pages/PressRelease.aspx?OriginalVersionID=136>..>Google Scholar
UNCTAD. 2013b. UNCTADstat Data Set. Available at <http://unctadstat.unctad.org/EN/>..>Google Scholar
UNEP-WCMC. 2016. World Database on Protected Areas User Manual 1.4. Available at <http://wcmc.io/WDPA_Manual>..>Google Scholar
Vernon, Raymond. 1971. Sovereignty at Bay: The Multinational Spread of US Enterprises. New York: Basic Books.Google Scholar
Walter, Barbara F. 2009. Bargaining Failures and Civil War. Annual Review of Political Science 12 (1):243–61.Google Scholar
Ward, Michael D., Berger, Andreas, Cutler, Josh, Dickenson, Matthew, Dorff, Cassy, and Radford, Ben. 2013. Comparing GDELT and ICEWS Event Data. Available at <https://www.researchgate.net/publication/303211430_ComparingGDELTandICEWSeventdata>..>Google Scholar
Weinstein, Jeremy M. 2007. Inside Rebellion: The Politics of Insurgent Violence. New York: Cambridge University Press.Google Scholar
Williamson, Oliver E. 1979. Transaction-Cost Economics: The Governance of Contractual Relations. Journal of Law and Economics 22 (2):233–61.Google Scholar
World Bank. 2012. World Development Indicators Data Set. Available at <https://data.worldbank.org/products/wdi>..>Google Scholar
Supplementary material: File

Christensen supplementary material

Christensen supplementary material 1

Download Christensen supplementary material(File)
File 70.4 MB