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The Gold Digger and the Machine Evidence on the Distributive Effect of the Artisanal and Industrial Gold Rushes in Burkina Faso

Remi Bazillier

Université Paris 1 Panthéon-Sorbonne

Victoire Girard

Nova SBE (Universidade Nova de Lisboa) and NOVAFRICA

ISSN 2183-0843
Working Paper No 1901
January 2019

Abstract

This paper uses a quasi-natural experiment, the recent gold boom in Burkina Faso, to document the local impact of two alternative mining techniques: artisanal and industrial mines. Artisanal mines have a bad reputation. When these mines (managed in commons) compete for land with industrial mines (privatized), governments tend to favor industries. However, more than 100 million people depend on artisanal mines for their livelihoods. Our identification strategy exploits two sources of variation. The spatial variation comes from the exposure of households to different geological endowments, and the temporal variation comes from changes in the global gold price. We are the first to document the economic impact of artisanal mines. We show that a 1% increase in the gold price increases consumption by 0.15% for households neighboring artisanal mines. Opening an industrial mine, in contrast, has no impact on local consumption.

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