Mineral Mining and Institutional Quality: Evidence from sub-Saharan Africa

The mineral wealth of the sub-Saharan African continent holds the potential for vast economic and social development in many currently poor, resource rich countries. However, countries with an abundance of natural resources tend to have lower economic growth rates. One possible explanation for this paradox – which is often referred to as the natural resource curse – is that natural resource abundance may have a negative effect on institutional quality. Most existing empirical research on the connection between natural resource abundance and institutional quality is at the national level. Using geo-coded data, this thesis estimates the local area effect of large scale mineral mining on the probability that children had received vaccinations in sub-Saharan Africa between 1990 and 2011. Following a study by Daniel Berger (2009), vaccinations are used as a proxy for institutional quality. Vaccination data from several rounds of household surveys are combined with longitudinal mining data to allow for a difference-in-difference regression analysis. This thesis finds that children s probability of being fully vaccinated – a measure of the quality of the routine vaccination program - decreased in mining areas once a mine opened. This can be interpreted as a negative effect on local institutional quality if vaccinations are accepted as a good proxy. The negative effect diminished with distance to the mines and is statistically significant up to the point where the mining footprint area is defined as 25 kilometers. This result is robust to all time in-variant differences between the mining and non-mining areas, migration, different geographical definitions of the mining area, and geographically restricting the control area. Unresolved issues related to migration, health provision by mining companies, pre-production activity of mining companies, and unobserved time-varying factors are highlighted as possible problems with the analysis