Regional Redistribution of Mineral Resource Wealth in Africa

Abstract

We study the economic implications of mineral resource activity for non-mining regions at the grid-level across the African continent. We find that capital cities benefit from mineral resource activity anywhere in the country. Leaders’ birth regions also benefit, but only in autocratic regimes. Generic non-mining regions, on the other hand, are worse off. These results suggest that regional redistribution of resource rents in Africa is primarily undertaken to the benefit of capital cities and leaders’ birth regions. In contrast, non-mining regions do not appear to be sufficiently compensated for the negative spillovers they may face due to mining activity elsewhere in the country.

Keywords: Mineral resources, spillovers, spatiality, luminosity, favoritism, democracy, Africa

JEL Classification: H77, O13, R12