Unpacking the Local Resource Curse: How Externalities and Governance Shape Social Conflict

Abstract

Natural resource extraction is economically important in many developing countries, but social conflict can threaten the viability of the sector. This article examines why polluting extractive industries sometimes generate social mobilization but often do not. First, I distinguish acute, highly visible environmental externalities from chronic, less observable pollution, showing that only the former generate social mobilization. Second, I explore how high-quality local governance can mitigate the local resource curse dynamic by both reducing pollution and improving compensation in mining-intensive areas. The analysis uses microlevel data on extractive commodities, water pollution, children’s and livestock health, local government quality, and mining-related social conflict in Peru to demonstrate the full causal pathway of the local resource curse.

Bigger Data and Quantitative Methods in the Study of Socio-Environmental Conflicts

“…The [19][20][21][22][23][24][25][26][27][28][29]. Taken as a group, these researchers have pushed the quantitative study of the resource curse to the subnational and local levels, and have done so by successfully integrating diverse sources of data including company characteristics; land-use patterns; surveys conducted by third parties; government statistics (censuses, financial transfers); coding of government reports such as environmental impact assessment documents; characteristics of the party system; and protest data available from the media, NGOs, academic projects, and, in the case of Peru, the National Ombudsman's Office.…”

“…In this regard, subnational data is essential to their overall argument that weak state capacity in Peruvian departments is associated with dissatisfaction and protest against extractive industries. Sexton [29] also argues that institutions matter to protest outcomes by suggesting that when strong they may mitigate community protest about environmental externalities. Part of his methodology uses geo-referenced mine site information available from the Peruvian government to categorize Peruvian provinces as either severely or less severely polluted.…”

“…As previously mentioned, Haslam and Ary Tanimoune [23] integrated PEA with an independently determined list of mining properties, and were, thus, able to include both conflict and non-conflict cases in their analysis, improving causal inference. In Peru, researchers have tended to rely on conflict accounts provided by the National Ombudsman's Office [15,[27][28][29]. Others have relied on activist sites that aggregate information about resource conflicts [14,20,23].…”

Subnational governance strategies at the extractive frontier: collaboration and conflict in Peru

“…Research on the actions of subnational governments in resource extracting regions is relatively limited and has been mainly preoccupied with the conditions under which the transfer of extractive revenues has led to a 'local resource curse' (Arellano-Yanguas, 2011;Idemudia, 2012;Lawer et al, 2017;Ponce & McClintock, 2014;Sexton, 2019), a term that most often refers to the activation of rent-seeking behaviour that in turn redounds in inadequate public services and, not infrequently, social unrest (cf. Sexton, 2019). A few studies have looked at the use of policy tools by subnational governments in relation to their authority to contest mining expansion (e.g., Eaton, 2015;Gustafsson & Scurrah, 2019b;McNeish, 2017;Walter & Urkidi, 2017).…”

Negotiating Natural Resource Conflicts: A Study of State Practices, Peasant Mobilisation and Sub‐National Government in the Peruvian Andes

“…McClintock and Ponce () have correlated how bad local governance and natural resource extraction is an explosive mix regarding localised conflict. Finally, Sexton () has recently emphasised this in a working paper, explaining how certain variables of bad governance and natural resource extraction influence local governance. This leads to the conclusion that the following three variables positively affect conflict outcomes: electoral accountability, bureaucratic efficiency and compensation for negative externalities of extractive activities.…”