Poverty, Inequality, and the Local Natural Resource Curse

30 Pages Posted: 9 Mar 2013

See all articles by Norman Loayza

Norman Loayza

World Bank - Research Department

Alfredo Mier y Teran

UCLA

Jamele Rigolini

New York University (NYU) - Department of Economics

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Abstract

The extent to which local communities benefit from commodity booms has been subject to wide but inconclusive investigations. This paper draws from a new district-level database to investigate the local impact on socioeconomic outcomes of mining activity in Peru, which grew almost twentyfold in the last two decades. We find evidence that producing districts have better average living standards than otherwise similar districts: larger household consumption, lower poverty rate, and higher literacy. However, the positive impacts from mining decrease significantly with administrative and geographic distance from the mine, while district-level consumption inequality increases in all districts belonging to a producing province. The inequalizing impact of mining activity, both across and within districts, may explain part of the current social discontent with mining activities in the country, even despite its enormous revenues.

Keywords: natural resource curse, poverty, inequality, living standards

JEL Classification: D7, H7, O1, Q3

Suggested Citation

Loayza, Norman and Mier y Teran, Alfredo and Rigolini, Jamele, Poverty, Inequality, and the Local Natural Resource Curse. IZA Discussion Paper No. 7226. Available at SSRN: https://ssrn.com/abstract=2230788

Norman Loayza (Contact Author)

World Bank - Research Department ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Alfredo Mier y Teran

UCLA ( email )

110 Westwood Plaza
Los Angeles, CA 90095-1481
United States

HOME PAGE: http://www.anderson.ucla.edu/degrees/phd/phd-students/gem/mier-y-teran

Jamele Rigolini

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

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