Work in Progress

Mining, Rural Livelihoods and Food Security: A Disaggregated Analysis of Latin America and Sub-Saharan Africa

The potential impacts of extractive industries on local food security are difficult to predict. On the one hand, resource extraction may generate more employment opportunities and provide farmers with better market access. On the other hand, mineral production may contribute to the marginalization of poor smallholders and increase food insecurity by encouraging land grabs, creating new pressures on environmentally sensitive areas and promoting structural labor market shifts. Although the link between mining and food security has been increasingly discussed by the qualitative literature, it has not been analyzed in a quantitative comparative way thus far. Relying on geocoded survey data and novel information on the control rights of gold, diamond and copper mines in Sub-Saharan Africa and Latin America, this paper is the first attempt to systematically test the effect of mining activities on local populations’ access to food. Thereby, it maintains that it is crucial to consider different governance structures, political contexts and gender-specific effects when analyzing the impact of extractive industries on food availability. Preliminary results from logistic as well as fixed effects linear models using districts and individual mines as levels of analysis show that mining operations decrease food security among women in a substantial way. At the same time, they show no significant or even a positive effect on men’s access to food. As women are rarely employed within industrial mining and their traditional roles are closely intertwined with subsistence farming in many rural societies, they seem particularly vulnerable to mining-induced dispossession, environmental destruction and the boom and bust character of extractive industries. In addition, the empirical analysis reveals that particularly multinational mining companies are linked to increased food insecurity, while domestic firms are not. Finally, the detrimental effect of mining activities on food security are confined to Sub-Saharan Africa and are not applicable to Latin America.

Temperatures, Food Riots and Adaptation: A Long-Term Historical Analysis of England with Alexander de Juan

A large body of research indicates that environmental conditions can influence the risk of social unrest. However, we know little about how these effects may change over time – for example, in the context of long-term climate change. Are the effects likely to remain constant or do they change as a consequence of human adaptation to different weather conditions? To investigate this question, we rely on a disaggregated analysis of England over a period of more than 300 years. Combining data on geo-referenced food riots with reconstructed climate data, we first assess the impact of annual temperatures on social unrest over the period 1500–1817. We then use our long-term time-series dataset to assess potential conditioning effects of adaptation on year-to-year associations between temperatures and social conflict. Our models show a substantive negative correlation between temperatures and food riots. This association, however, seems to be largely confined to the 18th century. In addition, we find evidence of decadal processes of adaptation: past exposure to adverse weather conditions dampens the effect of current exposure. Finally, our results tentatively indicate that regions facing high weather vulnerability exhibit the strongest adaptation effects. Taken together, these findings underline the importance of considering temporal (and geographical) heterogeneities when assessing the climate-conflict nexus and caution against any simple extrapolations of observable present-day effects of environmental conditions into the future.

A Gendered Resource Curse? Mineral Ownership, Female Unemployment and Domestic Violence in Latin America and Sub-Saharan Africa
with Mario Krauser, Gerald Schneider and Ingeborg H. Elgersma

Several studies suggest that the extractive industry has negative consequences for gender equality and that oil and mineral wealth increases female unemployment despite the often positive growth impact of natural resources. We re-examine this claim at the sub-state level in sub-Saharan African and argue that we need to differentiate between ownership arrangements in the extractive industry. To test our argument on the gender dimension of the resource curse, this article relies on data from our Natural Resource Ownership dataset as well as survey data from Demographic and Health Surveys (DHS) and Afrobarometer. Relying on logistic and linear regression models, we explore how the increased instability in mine regions with international investors affects the labor market integration of females. The regression results suggest in line with our theoretical expectation that the natural resource industry affects the employment outlook for women only marginally. However, within mining areas, international ownership is associated with higher female unemployment and more domestic violence. This result supports our earlier work on the importance of ownership arrangements in the extractive industries and the destabilizing effect that the attribution of ownership rights to international investors has in this domain. International investment in mining might undermine female empowerment and further grievances such as limited access to public education and increased exposure to gender-based violence.

The Micro-Foundations of the Resource Curse: Oil Ownership and Local Economic Well-Being in Sub-Saharan Africa
with Gerald Schneider and Arpita Khanna

The quantitative evidence on whether extractive industries generate economic wealth at the local level is far from conclusive. In line with recent studies highlighting the importance of considering institutional contexts and governance structures when assessing a possible resource curse, we argue that the effect of oil on local economic activity is largely driven by different control right regimes. We claim that state-controlled oil production stimulates local income more than privately-controlled extraction since national oil companies promote more linkages between the oil industry and other economic sectors. To test our micro-level arguments, we combine information on districts’ economic activity as well as individuals’ assessments of their personal economic situation with a new data set that establishes the control rights over hydrocarbons at the individual extraction site of the resource. Relying on this novel data, we perform district and individual-level analyses of sub-Saharan Africa covering the period from 1997 to 2014. Our multi-level and two-way fixed effects models show that the presence of domestic national oil companies is associated with increased local wealth, while international oil companies show no effect on subnational economic development. We also find that state-controlled oil production particularly furthers economic well-being under democratic institutions, good governance and low levels of corruption.

At Africa’s Expense? Disaggregating the Employment Effects of Chinese Mining Operations in Sub-Saharan Africa with Georg Strüver, Mario Krauser and Juliane Giesen

China’s increasing investments in African countries have attracted considerable media attention and are the subject of scholarly controversies. However, the socio-economic impacts of China’s presence in Africa remain poorly understood. While some case studies maintain that Chinese projects have an enclave character and have largely failed to promote economic spillovers and local employment, others claim that Chinese activities have in fact encouraged infrastructural development and local economic activity. Focusing on the labour market effects of foreign mining investments in Africa, this paper examines whether Chinese-controlled companies generate fewer local jobs compared to non-Chinese mining operations. Theoretically, we argue that – due to a competitive advantage in the employment of expatriate workers and a lower readiness to invest in local skill formation – Chinese firms are less likely to foster regional employment. Relying on novel data on the control-rights regimes of diamond, gold, and copper mines and geo-referenced information from Afrobarometer surveys, we test the effect of mining contractors’ nationality on local employment rates. Our individual-level logistic models show that respondents living close to Chinese mining areas are more likely to report being unemployed compared to individuals living in the vicinity of non-Chinese mining operations. Times-series cross-sectional estimations employing district-level data from the Demographic Health Survey for 20 sub-Saharan countries over the period 1997-2014 corroborate these findings. Furthermore, we find evidence that negative perceptions of China among indigenous populations are largely driven by the belief that Chinese workers are crowding out local employment.

Educational Resource Curse? A Disaggregated Analysis of Oil Ownership and Human Capital Formation
with Mario Krauser

Quantitative studies support the claim that extractive industries discourage human capital formation. We contend that the resource-education nexus is contingent on natural resource control rights. State-controlled oil companies are more likely to promote local schooling compared to international firms because they generate more direct public revenue, pursue non-commercial goals and do not face expropriation threats. We test this claim combining novel georeferenced data on hydrocarbon control rights with information from the Demographic Health Survey for 21 sub-Saharan countries over the period 1997–2015. For a more nuanced geographical analysis, we also rely on spatial survey data from Afrobarometer. Our two-level mixed-effects and logistic estimations show that state-controlled oil production increases secondary education and lowers the share of the population without formal schooling. We find this effect to be particularly strong under local institutions that promote political accountability. In contrast, internationally controlled oil extraction seems to further local education only when property rights are enforced.