Technology, Information and State Capacity: Experimental Evidence from Illegal Mining in Colombia

Abstract

Illegal mining has negative social, environmental, and fiscal impacts on host countries. Monitoring technologies can help curb illegal activities by providing new information or the threat that the information is widely accessible. I used a technology based on machine learning and satellite imagery to detect illegal mining. Subsequently, I randomly disclosed the technology and possible mine locations to government agents. I find that illegal mining is reduced in the disclosed locations and surrounding areas in treated municipalities by 10 percentage points. When accounting for negative spillovers --- increases in illegal mining in areas not disclosed --- the net reduction is one-half smaller. These results illustrate the benefits of new technologies for building state capacity.

Keywords: Illegal mining, Monitoring technology, Colombia

JEL Classification: H26, K42, O13, O17, Q53