governing extractive industries

Governing Extractive Industries

OUP CORRECTED PROOF ndash FINAL 2552018 SPi


Governing ExtractiveIndustries

Politics Histories Ideas

Anthony Bebbington Abdul-Gafaru AbdulaiDenise Humphreys Bebbington Marja Hinfelaarand Cynthia A Sanbornwith

Jessica Achberger Celina Grisi HuberVeroacutenica Hurtado Tania Ramiacuterezand Scott D Odell

1


3Great Clarendon Street Oxford OX2 6DPUnited Kingdom

Oxford University Press is a department of the University of OxfordIt furthers the Universityrsquos objective of excellence in research scholarshipand education by publishing worldwide Oxford is a registered trade mark ofOxford University Press in the UK and in certain other countries

copy Anthony Bebbington Abdul-Gafaru Abdulai Denise Humphreys Bebbington MarjaHinfelaar and Cynthia A Sanborn 2018

The moral rights of the authors have been asserted

First Edition published in 2018Impression 1

Some rights reserved No part of this publication may be reproduced stored ina retrieval system or transmitted in any form or by any means for commercial purposeswithout the prior permission in writing of Oxford University Press or as expressly permittedby law by licence or under terms agreed with the appropriate reprographicsrights organization

This is an open access publication available online and distributed under the terms of aCreative Commons Attribution ndash Non Commercial ndash No Derivatives 40International licence (CC BY-NC-ND 40) a copy of which is available athttpcreativecommonsorglicensesby-nc-nd40

Enquiries concerning reproduction outside the scope of this licenceshould be sent to the Rights Department Oxford University Press at theaddress above

Published in the United States of America by Oxford University Press198 Madison Avenue New York NY 10016 United States of America

British Library Cataloguing in Publication DataData available

Library of Congress Control Number 2018937073

ISBN 978ndash0ndash19ndash882093ndash2

Printed and bound byCPI Group (UK) Ltd Croydon CR0 4YY

Links to third party websites are provided by Oxford in good faith andfor information only Oxford disclaims any responsibility for the materialscontained in any third party website referenced in this work


UK Aid Acknowledgement

This book is an output from a project funded by UK Aid from the UKgovernment for the benefit of developing countries However the viewsexpressed and information contained therein are not necessarily those of orendorsed by the UKGovernment which can accept no responsibility for suchviews or information or for any reliance placed on them



Preface and Acknowledgements

This book has been several years in the making Ideas for the research projecton which it is based slowly began cooking in 2012 as part of wider discussionswithin the Effective States and Inclusive Development (ESID) Research Centrean international collaboration of research centres coordinated by the GlobalDevelopment Institute at the University of Manchester ESIDrsquos unifying ques-tion is lsquoWhat kinds of politics can help to secure inclusive development andhow can these be promotedrsquo Our research project asked how one mightunderstand the interactions between political settlements extractive industrygovernance and patterns of inclusion over the long haul We had eachworked on extractive industries for a number of years and for each of us itwas more than obvious that politics is central to how the sector is governedHowever the challenge of finding a formal language for talking about thispolitical dimension and of doing so in a way that would allow for systematiccomparison and synthesis across different country contexts piqued our interestAnd so began the initiative that has culminated in this manuscript

In keeping with the general orientation of the broader ESID programmewe worked from literature on political settlements This generated its ownchallengesmdashsometimes it seemed to help our analyses while at other times itfelt as if the language got in the way We debated the usefulness or not of theconcept and in the end made our own settlement with political settlementsIn part this was because of the challenge at hand It is completely reasonableto have to talk about 125 years of a countryrsquos political and natural resourcegovernance history in forty pages in political debate and general conversa-tion citizens are frequently in the business of making such concise interpret-ations of history and then mobilizing them as part of a broader debate Yetthe actual challenge of writing these forty-page interpretations was brutal onthe one hand it felt we were leaving so much out while on the other detailswere always getting in the way of the flow of our arguments After very manyiterations and discussions of the four country cases that constitute the basis ofthis book we cycled back to the view that the political settlements frameworkbecame the most productive and integrative way to talk about these long-termdynamics in ways that allow comparisons over time and across space Wealso concluded that the language of political settlements was especially useful


because it allowed us to discuss through one framework quite different forms ofresource extraction large-scale mining large-scale hydrocarbons artisanal andsmall-scale mining (ASM) and mining cooperatives This is important becausein the literature these different forms of extraction are most often discussedseparately notwithstanding the clear political economic and geographicalrelationships that exist among them

As we have proceeded along this analytical and theoretical road trip (com-plete with flat tyres breakdowns and speeding tickets) we have receivedsterling intellectual guidance from SamHickey atManchester Sam has offeredcomment and criticism with great generosity and has also been our projectrsquosmost loyal supporter and cheerleader especially when we felt we were treadingwater Also in the core ESID team the comments and thinking of Pablo YanguasKunal Sen and Matthias vom Hau have been very helpful This project waslinked to two othersmdashone investigating corporate social responsibility (CSR)in mining led by Tomas Frederiksen the other addressing the relationshipsbetween natural resource taxation and redistributive social policy led by PaulMosley Tomas and Paul were part of many of our team debates and we owethem an intellectual debt of gratitude also In Peru Tania Ramiacuterez and Veroacuten-ica Hurtado made considerable and important contributions to the researchand writing Alvaro Canorsquos work on the evolution of public policies towardsASM was fundamental to our understanding thereof Alejandra Villanuevarsquosresearch provided new insights into the mining sector and Alvaro Paredesprovided research assistance For research on Bolivia Celina Grisi Huberplayed a vital role in field research Laura Riddering and Scott Odell eachsupported with invaluable assistance In Zambia Jessica Achberger and JustineSichone each helped greatly in the preparation of research materials

At Manchester and at our respective home institutions many people haveassisted with the management of this project They have facilitated our meet-ings organized workshops handled budgets and done all the other adminis-trative work without which researchmdashespecially international collaborativeand comparative researchmdashwould not be possible In particular we are grate-ful to Kat Bethell Julia Brunt Clare Degenhardt Pamela Dunkle Sophie KingSusan Puryear Julie Rafferty Zuleyka Ramos Ingrid Vega and Anna WebsterWe are especially grateful to Scott Odell of Clark University who did aremarkable job editing the chapters teasing out their messages clarifyingand correcting syntax and grammar and preparing the manuscript for OxfordUniversity Press (OUP) At Melbourne Chandra Jayasuriya was an enormoushelp in preparing all the maps for this book At OUP we thank Adam Swallowfor his guidance and support of the project and Catherine Owen and KatieBishop for guiding it through contracting and production

Many people have commented on this work as it has progressed and theirobservations and criticisms have improved our arguments in many ways



viii

In particular we are grateful to Martin Abreguacute Javier Arellano-YanguasKojo Asante Joseacute Alejandro Peres Cajiacuteas Alvaro Cano John Crabtree GerardoDamonte Eduardo Dargent Sam Hickey David Hulme David KaimowitzTerry Karl Carlos Monge Alvaro Paredes Maritza Paredes Martin Scurrahand Alejandra Villanueva We are also grateful for the various anonymousreviews that we received on the book proposal and the different chapters ofthe manuscript Our arguments and interpretations have also been presentedin workshops discussion fora and panels at the Latin American StudiesAssociation annual meetings in New York (2016) and Lima (2017) the Uni-versidad del Paciacutefico in Lima the ESID Research Dissemination workshop atthe Ghana Centre for Democratic Development Accra the Southern AfricanInstitute for Policy Analysis and Research Lusaka the Centre for RegionalStudies and Development of Tarija Tarija and the Bolivian Centre for Docu-mentation and Information Cochabamba We thank participants at all theseevents for their feedback

The project has received financial support from the ESID Research Centre aswell as many financial subsidies from our host institutions Clark UniversityUniversity of Melbourne Universidad del Paciacutefico the Southern African Insti-tute for Policy and Research and the University of Ghana Business SchoolTony Bebbington also acknowledges with much gratitude the support of aJohn Simon GuggenheimMemorial Foundation Fellowship and an AustralianResearch Council funded Australian Laureate Fellowship

Anthony Bebbington Abdul-Gafaru AbdulaiDenise Humphreys Bebbington Marja Hinfelaar

and Cynthia SanbornMelbourne Accra Worcester Lusaka Lima

October 2017



ix


Table of Contents

List of Figures xiiiList of Maps xvList of Tables xviiList of Abbreviations xix

1 Resource Extraction and Inclusive Development Extendingthe Bases of the Political Settlements Approach 1

2 Mining Political Settlements and Inclusive Development in Peru 23

3 Political Settlements Natural Resource Extraction and Inclusionin Bolivia 72

4 The Politics of Natural Resource Extraction in Zambia 116

5 Competitive Clientelism and the Political Economy ofMining in Ghana 152

6 Conclusions Interpreting the Politics of Natural ResourceExtraction 197

References 227Index 253



List of Figures

21 Mining share of GDP Peru 1890ndash2012 (millions of nuevos soles 2007in logarithms) 38

22 GDP and mining GDP variation Peru 2001ndash15 39

23 Mineral exports in value (US$ million) and share of total exportsPeru 2001ndash15 39

24 Total tax revenues and share from mining (millions of nuevos soles)Peru 2000ndash16 40

25 Evolution of mining rights and share of national territory Peru1991ndash2016 46

26 Total transfers to regions Peru 2006ndash15 (mining canon royalties andconcessions payments millions of nuevos soles) 53

27 Total transfers to regions by region Peru 2006ndash15 (mining canonroyalties and concessions payments nuevos soles) 53

28 Total social and socio-environmental conflicts reported by theOmbudsman Peru 2005ndash16 56

41 Annual GDP growth and copper price trend Zambia 1960ndash2016 135

42 Private ownership patterns in Zambian copper mines 1920s tothe present 145

51 Key mineral production trends 1980ndash2008 167

52 World gold price (US$troy ounce) 1968ndash2016 Price basedon 995 fine afternoon fixing London 171

53 Budgetary allocations (GH₵ millions) to LEAP 2010ndash16 175

54 Poverty and inequality trends Ghana 1991ndash2013 175

55 Distribution of mining revenues in Ghana 183

56 ASM contribution to total gold production () Ghana 2005ndash14 189



List of Maps

21 The national distribution of mineral deposits and potential miningdistricts identified by the Ministry of Energy and Mines Peru (1967) 43

22 The national distribution of different types of mining licencePeru January 2017 49

23 Areas with presence of illegal and informal mining as identifiedby the Ministry of Environment Peru 2015 51

31 Mining areas Bolivia 75

32 Hydrocarbon areas Bolivia 77

41 Mining provinces and key mine sites Zambia 122

42 National distribution of mining licenses in Zambia in 2017 showingparticular concentrations in North-Western and Copperbelt Provinces 147

51 Geographical distribution of mining licences in Ghana 2014 168



List of Tables

31 Periodization of political settlements in Bolivia 1899ndash2016 84

41 Zambian political settlements 1896ndashpresent 125

42 Political settlements in relation to the extractive industry Zambia 132

43 Indicators of inequality poverty and extractive industries in Zambia 150

51 Periodization of Ghanarsquos national political settlements dynamicscolonial period to date 155

52 Periodization of political settlements in mining Ghana 161

53 Gold production and government revenue from mining (GH₵ 2005ndash15) 173

54 Poverty trends in Ghanarsquos poorer northern regions and the countryas a whole 2005ndash13 174



List of Abbreviations

AAC Anglo-American Company

ADEX National Exportersrsquo Association (Asociacioacuten de Exportadores Peru)

ADN Nationalist Democratic Action (Accioacuten Democraacutetica NacionalistaBolivia)

ANC African National Congress

ANMM National Association of Medium-Scale Miners (Asociacioacuten Nacionalde Mineros Medianos Bolivia)

AP Popular Action (Accioacuten Popular Peru)

APRA American Popular Revolutionary Alliance (Alianza Popular Revolu-cionaria Americana Peru)

ARPS Aborigines Rights Protection Society (Ghana)

ASM artisanal and small-scale mining

AU African Union

BCRP Central Reserve Bank of Peru (Banco Central de Reserva del Peruacute)

BHP Broken Hill Proprietary

BSAC British South Africa Company

CAF Central African Federation

CEDIB Bolivian Centre for Documentation and Information (Centro deDocumentacioacuten e Informacioacuten Bolivia)

CEO chief executive officer

CIPEC Intergovernmental Council of Copper Exporting Countries

CIUP Research Center of the University of the Pacific (Centro de Investi-gacioacuten de la Universidad del Paciacutefico Peru)

CNTCB National Confederation of Peasant Workers of Bolivia (Confedera-cioacuten Nacional de Trabajadores Campesinos de Bolivia)

COB Confederation of Bolivian Workers (Central Obrera Boliviana)

CODEPANAL Committee for the Defence of National Patrimony (Comiteacute deDefensa del Patrimonio Nacional Bolivia)

COMIBOL Bolivian Mining Corporation (Corporacioacuten Minera de Bolivia)

COMSUR Mining Company of the South (Compantildeiacutea Minera del Sur)


CONFIEP National Confederation of Private Business Institutions (Confed-eracioacuten Nacional de Instituciones Empresariales Privadas Peru)

CPMC Cerro de Pasco Mining Company

CPP Convention Peoplersquos Party (Ghana)

CSR corporate social responsibility

CSUTCB Unified Confederation of Unionized Peasant Workers of Bolivia(Confederacioacuten Sindical Uacutenica de Trabajadores Campesinos de Bolivia)

DA development agreement

DGAAM General Direction of Environmental Issues in Mining (DireccioacutenGeneral de Asuntos Ambientales Mineros Peru)

ECLAC United Nations Economic Commission for Latin America and theCaribbean

EI extractive industry

EIA environmental impact assessment

EITI Extractive Industries Transparency Initiative

ERP Economic Recovery Programme (Ghana)

ESID Effective States and Inclusive Development (Research Centre)

FDI foreign direct investment

FENCOMIN National Federation of Mining Cooperatives of Bolivia (FederacioacutenNacional de Cooperativas Mineras de Bolivia Bolivia)

FISP Farmer Input Support Programme (Zambia)

FPIC free prior and informed consent

FSTMB Union Federation of Bolivian Mine Workers (Federacioacuten Sindical deTrabajadores Mineros de Bolivia)

FTA free trade agreement

GDP gross domestic product

GH Ghana

GHEITI Ghana Extractive Industry Transparency Initiative

GRA Ghana Revenue Authority

GRFA Revolutionary Government of the Armed Forces (Gobierno Revolu-cionario de las Fuerzas Armadas Peru)

HIPC heavily indebted poor countries initiative

ICMM International Council on Mining and Metals

IFC International Finance Corporation

IFI international financial institution

IGV General Consumption Tax (Impuesto General a las Ventas Peru)

ILO International Labour Organization


xx


ILO 169 1989 Indigenous and Tribal Peoples Convention of the Inter-national Labour Organization

IMF International Monetary Fund

INEI National Institute for Statistics and Informatics (Instituto Nacionalde Estadiacutestica e Informaacutetica Peru)

INGEMMET Geological Mining and Metallurgical Institute (Instituto GeoloacutegicoMinero y Metaluacutergico Peru)

IPC International Petroleum Company

IRAC Institute for Land Reform and Colonization (Instituto de ReformaAgraria y Colonizacioacuten IRAC)

IRS Internal Revenue Services (Ghana)

ISI import substitution industrialization

IVA value added tax

LAZ Law Association of Zambia

LEAP Livelihood Empowerment Against Poverty (Ghana)

MAS Movement to Socialism (Movimiento al Socialismo Bolivia)

MC Ministry of Culture (Ministerio de Cultura Peru)

MDF Mineral Development Fund (Ghana)

MEF Ministry of Economy and Finance (Ministerio de Economiacutea y Finan-zas Peru)

MFEZ multi-facility export zone (Zambia)

MINAM Ministry of the Environment (Ministerio del Ambiente Peru)

MINEM Ministry of Energy and Mines (Ministerio de Energiacutea y Minas Peru)

MIR Revolutionary Left Movement (Movimiento de la Izquierda Revolu-cionaria Bolivia)

MMC Marcona Mining Company

MMD Movement for Multi-Party Democracy (Zambia)

MNR National Revolutionary Movement (Movimiento Nacionalista Revo-lucionario Bolivia)

MP Member of Parliament

NCCM Nchanga Consolidated Copper Mines

NCOM National Coalition of NGOs in Mining (Ghana)

NDC National Democratic Congress (Ghana)

NDPC National Development Planning Commission (Ghana)

NFR New Republican Force (Nueva Fuerza Republicana Bolivia)

NGO non-governmental organization

NLM National Liberation Movement (Ghana)


xxi


NPP New Patriotic Party (Ghana)

NRC National Redemption Council (Ghana)

NT Northern Territories (Ghana)

OAS Organization of American States

OASL Office of Administration of Stool Lands (Ghana)

OECD Organization for Economic Co-operation and Development

OEFA Organism for Environmental Evaluation and Fiscalization (Orga-nismo de Evaluacioacuten y Fiscalizacioacuten Ambiental Peru)

OPEC Organization of the Petroleum Exporting Countries

OVC orphans and vulnerable children

PAMA Environmental Adjustment and Management Plan (Programa deAdecuacioacuten y Manejo Ambiental Peru)

PCP-Shining Path Communist Party of Peru-Shining Path (Partido Comunista del Peruacute-Sendero Luminoso)

PEMEX Mexican Petroleums (Petroacuteleos Mexicanos)

PF Patriotic Front (Zambia)

PMMC Precious Minerals Marketing Company

PMSP Mining Programme in Solidarity with the People (Programa Minerode Solidaridad con el Pueblo Peru)

PNDC Provisional National Defence Council (Ghana)

PPC Christian Peoplersquos Party (Partido Popular Cristiano Peru)

PRMA Petroleum Revenue Management Act (Ghana)

PRODUCE Ministry of Production (Ministerio de Produccioacuten Peru)

RCM Roan Consolidated Copper Mines

RST American Roan Selection Trust

SADA Savannah Accelerated Development Authority (Ghana)

SAIPAR Southern African Institute for Policy and Research

SAP Structural Adjustment Programme

SENACE National Service of Environmental Certification of SustainableInvestments (Servicio Nacional de Certificacioacuten Ambiental para lasInversiones Sostenibles Peru)

SGMC State Gold Mining Corporation (Ghana)

SMC Supreme Military Council (Ghana)

SNMPE National Society of Mining Oil and Energy (Sociedad Nacional deMineriacutea Petroacuteleo y Energiacutea Peru)

SPCC Southern Peru Copper Corporation

SUNAT National Superintendency of Tax Administration (SuperintendenciaNacional de Administracioacuten Tributaria Peru)


xxii


TIPNIS Isiboro-Seacutecure Indigenous Territory and National Park (TerritorioIndiacutegena y Parque Nacional Isiboro-Seacutecure Bolivia)

UDI Unilateral Declaration of Independence (Zambia)

UGCC United Gold Convention Party (Ghana)

UNIP United National Independence Party (Zambia)

UNO Odriiacutest National Union (Unioacuten Nacional Odriiacutesta Peru)

UPND United Party for National Development (Zambia)

UPP United Progressive Party (Zambia)

USAID United States Agency for International Development

VAT value added tax

WB World Bank

WWII World War II

YPFB Bolivian National Oilfields (Yacimientos Petroliacuteferos Fiscales deBolivia)

ZCCM Zambia Consolidated Copper Mines

ZCCM-IH Zambia Consolidated Copper Mines Investment Holdings

ZCTU Zambia Congress of Trade Unions

ZIMCO Zambia Industrial and Mining Corporation


xxiii



1

Resource Extraction andInclusive Development

Extending the Bases of the PoliticalSettlements Approach

The large-scale extraction of minerals hydrocarbons and other naturalresources1 has longbeen central tonational economies and the global economyThis has been the case in colonial and post-colonial economies alike and theharnessing of such resources continues to feature prominently in the economicdevelopment strategies of many countries The economic significance ofresource extraction can be quantified through data on percentage contributionof oil gas and mining to GDP exports foreign direct investment and thepublic budget (Mosley 2017) In contrast the contributions of extractive indus-tries to lsquodevelopmentrsquo and lsquoinclusive developmentrsquo aremore uncertain not leastbecause definitions of these terms differ based on the degree to which analystsemphasize goals of poverty and income inequality environmental justicegender equity or human and citizenship rights Even those advocating forthe role of extractives in economic development and poverty reductionrecognize that results have often been ambiguous (Davis 2009) These obser-vations have inspired much discussion of the factors explaining such disap-pointments a series of policy recommendations regarding how to improvethe contributions of resource extraction to development and significantadvocacy and social conflict surrounding the extractive economy across theglobe (see Ross 2015)

Much of the discussion regarding how to manage resource extraction moreeffectively has emphasized the importance of institutions and governance (Karl1997 2007 Humphreys et al 2007) Disappointing development outcomesin economies with substantial extractive activity have been explained interms of the lsquopoor qualityrsquo or lsquoweaknessrsquo of institutions existing prior to and


during the growth of investment in mining and hydrocarbons as well as theadverse impacts of a growing extractive economy on institutional quality(Weber-Fahr 2002 Robinson et al 2006 Humphreys et al 2007 Davis2009 Ross 2015) Such centring of institutions in explanations of poorperformance has alsomeant that many proposals for change have emphasizedthe need for new improved and strengthened institutions The sorts ofinstitutions proposed are diverse often depending on the most pressingconcerns of the commentator These can include institutions and processesfor free prior and informed consent (FPIC) sovereign wealth funds to manageresource rents without distorting incentives transparency institutions rangingfrom subnational government oversight to the global Extractive IndustriesTransparency Initiative (EITI) and tax codes to reallocate benefits along thevalue chain and among stakeholders2 While such proposals each have theirlogic they tend to say less about the conditions that would need to existfor such institutional changes to come into being be sustained over time andbe effective

Of course there is only so much that any particular act of analysis oradvocacy can achieve but it remains important to explore the conditionsunder which institutions affecting natural resource governance have emergedThe literature on institutional change suggests that political ideational andbureaucratic factors are all likely to matter (Mahoney and Thelen 2010)While much of this literature invokes exogenous drivers of change driverscan also be endogenous to the institution and the geographical and socialunits that it governs (Bebbington et al 2008 Mahoney and Thelen 2010Berdegueacute et al 2015 Ospina et al 2015) Regardless of whether drivers areprimarily exogenous or endogenous historical precursors are likely to affectthe possibility of and form taken by such processes of emergence (Mahoneyand Thelen 2010 Thorp et al 2012 Bebbington 2013b)

This book synthesizes lessons from research enquiring into the drivers ofinstitutional change in extractive industry governance over time and in dif-ferent geographical contexts and the implications of these governancearrangements for patterns of social political and economic inclusion Theproject paid special attention to the political drivers of institutional changeWe are certainly not the first to step into this terrain and there is already astrong scholarly literature addressing the political dimensions of extractiveindustry governance (eg Karl 1997 Leith 2003 Le Billon 2005 Robinsonet al 2006 Rajan 2011 Mitchell 2012 Ross 2012 DrsquoArgent et al 2017)Our intended contribution is to take insights from such authors and explorewhat might be gained by reading the politics of resource extraction through atheoretical framework that grows out of the literature on political settlementsand national developmental trajectories (Hickey 2013 Hickey et al 2015) Inthe remainder of this introduction we discuss how we made use of these



2

literatures introduce the questions that the book addresses describe themethodology underlying our research and briefly introduce the remainingchapters

1 Mapping the Conceptual Terrain

11 The lsquoResource Cursersquo and the Politics of ExtractiveIndustry Governance

In the words of Ross (2015) lsquoThe resource curse might be defined as theadverse effects of a countryrsquos natural resource wealth on its economic socialor political well-beingrsquo (2015 240) Since the early 1990s debates over thenature and existence of this lsquocursersquo have been the dominant frame for discus-sions of extractive industry governance These debates emerged around theclaim that growth indicators for countries that are dependent on naturalresource extraction (especially minerals oil gas and timber) do not comparewell with those of countries whose economies are more diversified and dem-onstrate more substantial manufacturing and service sectors (Gelb 1988Auty 1993 Sachs and Warner 1995) It was also argued that extractiveindustry-dependent economies were less effective in reducing poverty thanmore diversified economies (Ross 2001b) and that lsquonatural resource wealthtends to adversely affect a countryrsquos governancersquo (Ross 2015 239) Claimsregarding the existence of a lsquoresource cursersquo quickly stimulated a counter-literature arguing the converse or at least asserting that there was no clearpattern to the relationship between resource dependence and national eco-nomic and social performance (Davis 1995 Davis and Tilton 2005 ICMM2007 Brunnschweiler and Bulte 2008 Davis 2009) At stake in much of thisdebate are arguments about statistical methods choice of indicators timehorizons and more Discussions have made clear just how difficult it is todefine and then measure appropriate indicators of lsquoresource dependencersquo orlsquoinstitutional qualityrsquo which then makes it challenging to build causal argu-ments about the effects of one of these on the other Similar problems ofindicator definition and measurement apply to other terms that circulate indiscussions of the resource curse

As debates progressed they moved away from making strong statementson whether hydrocarbons and minerals were lsquogoodrsquo or lsquobadrsquo for developmenttowards recognition of the diverse outcomes associated with extractive indus-try wealth and efforts to account for this diversity (Bebbington et al 2008Thorp et al 2012 Ross 2015) Most frequently institutional quality becameidentified as the primary determinant of these diverse outcomes and lsquogettingthe institutions rightrsquo became a central objective in efforts at lsquoescaping theresource cursersquo (Humphreys et al 2007) As authors we take it as a given


Resource Extraction Political Settlements

3

that the relationship between extractive industries and the quality of devel-opment is indeterminate and has much to do with the nature of dominantinstitutions However we would also argue that more often than notresource-dependent development has delivered disappointing results andbeen plagued by a range of pathologies and that the balance of politicalpower has a significant influence on the qualities of the institutions thatinfluence the effects of natural resources on development Our primaryconcern is to understand how the interactions among politics naturalresources and institutional form play out over time and across countrieswith a view to identifying convergences that might help us theorize theserelationships

There is already a literature on the political drivers of resource-dependentdevelopment on which we build some of this precedes the lsquoresource cursersquoliterature while some of it has emerged as part of that literature Of particularimportance is the early work of Terry Karl (1987 1997) that used a politicaleconomy lens to understand how oil exporting affects the relationshipsbetween politics democracy and development In The Paradox of Plenty Karldrew inspiration from her long-term empirical work on Venezuela as well asthe experiences of other oil and mineral-dependent nations to move beyondgeneric assertions that lsquopolitics matterrsquo Instead she argued that the pacts andbargains made by elites in one phase of history including the decisions theymake about whether and how to sow revenue from resource extraction deeplyaffect the space and options for development thereafter She examined thedecision to exploit oil revenues in the second half of the twentieth century inVenezuela and showed how it affected the countryrsquos ability to create demo-cratic institutions over time In particular she demonstrated the lsquoparadoxicalrsquorelationship between the abundance of oil and the existence of institutionsthat were deeply corrupt and fragile This work showed the weight of externalfactors and actors in the politics of oil exporters and how bonanza rents fromsuch resources can lsquogrease the wheelrsquo of domestic pact-making keeping dissi-dents quiet by buying them off When that no longer works however therevenues are often used to build up militaries that use force to exclude andsuppress opponents Yet her analysis also showed how such pact-making canunravel as more people become excluded from the original deals and arenegatively affected by the dependency of the state on extraction When thestructural inequalities are no longer masked by redistributive politics thingsfall apart In many regards Karlrsquos work was not just analyticalmdashit was sadlyprophetic certainly for Venezuela

The political significance of oil has also been at the core of the contribu-tions of Michael Ross (2001a 2012) and Timothy Mitchell (2012) Ross(2001a 2012 2015) argues that resource curse-like outcomes are muchmore systematically associated with oil dependence than with the extraction



4

of other mineral resources There are various reasons for this including theprice volatility of oil However Ross places particular explanatory emphasison whether oil resources are in private or state hands He suggests that oilbegan to have more systematically adverse impacts on the depth and qualityof democracy following the creation of state-owned oil companies in the1970s State ownership offered elites privileged instruments with which topoliticize oilmdashwhether through using revenue for purposes of politicalpatronage pact-making or private gain or through instrumentalizing thecontrol of oil as a metaphor for talking about imperial dependence andresource sovereignty In either instance the developmental effects areadverse he argues For Mitchell (2012) whose focus was more broadly onthe relationships between the control of carbon and democracy oil has alsohad nefarious political effects These have derived from the capital intensityof oil extraction and transportation which means that oil tends tostrengthen economic and political elites rather than organized labour Inaddition oil has attracted the attention of powerful transnational companieswith close ties to their host states who together undermine national sover-eignty and regulatory institutions in the countries whose oil deposits theyhave sought out The adverse political consequences of oil also figure prom-inently in Michael Wattsrsquos sustained work on the Niger Delta (Watts 2004a2004b Watts with Kashi 2008) Watts insists that any effort to understandthe relationships between oil politics violence and development mustattend lsquoto the ways in which oil becomes an idiom for doing politics as it isinserted into an already existing political landscape of forces identities andforms of powerrsquo (Watts 2004b 76) He demonstrates that this politicallandscape is one characterized by longer histories of colonialism post-independence state-making subnational power and identity formationaround locality and indigeneity The politics driving oil governance thushave deep historical and cultural roots

While also pointing to the centrality of politics in determining the rela-tionships between natural resource wealth and development Robinson et al(2006) pursue a completely distinct analytical line from that of Watts onethat attends to political incentives rather than history They do this throughformal modelling of the ways in which leaders calculate how they will use therevenues from extractive industries if their goal is to stay in power Theyargue that these calculations lead political authorities to over-extractresources in order to finance strategies for retaining power While the incen-tive to over-extract declines in contexts of resource boom the tendency touse resources to purchase political support increases leading to further inef-ficiencies in how public resources are allocated across the economy In eitherinstance the development consequences are adverse as financial resourcesare not invested in those sectors where they would have the most economic



5

and social impact The authors argue however that the extent to which thisis so depends on the quality of institutions and the extent to which theyconstrain leadersrsquo proclivity to misallocate state revenue What their frame-work does not offer is a means of accounting for the quality of such institu-tions in the first place

Other parts of the literature on the politics of natural resource extractionexplore the political strategies of activist groups and social movements(Kirsch 2012 Bebbington and Bury 2013 Li 2015) the emergence of civilconflict (Le Billon 2005 Collier et al 2009) and the politics of scholarlyengagement (Coumans 2011) among others The precursors laid out byKarl Ross Watts and Robinson et al however help define the base fromwhich we work in this study Together their insights make clear that elitestrategies of political pact-making are deeply affected by the presence ofnatural resource revenues in ways that then structure subsequent room formanoeuvre in politics and policy Watts and Karl show in different ways howhistory matters andWatts draws attention to the importance of ideas and thecultural realm in affecting political action around resource revenues Each ofthemmdashthough particularly Ross and Robinson et almdashalso emphasize thatwhoever owns resources (the state or private actors) influences the impact ofresource extraction on politics Like much of the broader literature in whichtheir work is situated each author shows that institutions matter to therelationships between extractive industry and development Karl and Wattsalso imply (albeit with quite distinct languages) that the nature of suchinstitutions must be explained from within the same concepts that are usedto explain the broader relationships between politics and natural resourcesPut another way one cannot build a framework to analyse the relationshipsbetween politics extractive industry and development and then introducelsquoinstitutionsrsquo as an independent mediating variable Such institutions arethemselves a product of the same relationships that they mediate and haveto be accounted for historically

In the following sections we develop a framework for addressing theserelationships by drawing upon the literature on political settlements Wesuggest that this framework extends earlier work on the politics of naturalresource governance It centres the focus on power and elite relationshipsanalyses institutions in terms of these political relationships and accountsfor drivers of institutional and political change that can derive from withinnational elite pacts as well as from the strategies of subaltern and trans-national actors In this way the framework converges with other recentwork that seeks more explicitly to go beyond the focus on lsquoinstitutionsrsquowithinthe resource curse literature to focus on the political coalitions and ideasthat shape the emergence of institutions and how they actually function inpractice (eg Poteete 2009 Hickey and Izama 2017 Mohan et al 2017)



6

12 Political Settlements as Stable Orders

Khan (2010) defines a political settlement as lsquo a combination of power andinstitutions that is mutually compatible and also sustainable in terms ofeconomic and political viabilityrsquo (2010 4) The concept describes the agree-ments among powerful actors that enable social order in a given country(North et al 2009 Khan 2010) Framed slightly more broadly for di Johnand Putzel (2009) a political settlement lsquorefers to the balance or distribution ofpower between contending social groups and social classes on which anystate is basedrsquo (2009 4)

In these overlapping formulations a focus on political settlements drawsattention to the ways in which governing relations are negotiated amongeconomic and political elites Such negotiations produce distributions ofeconomic and political opportunity that reflect the bargaining power of thesedifferent elites Elite status is not necessarily understood in terms of long-standing historical privilege based on race ethnicity kinship or inheritedwealth but more specifically refers to that minority of individuals or groupsthat hold resources which allow them to exercise control over the state andthe overall distribution of assets and rights in society Such resources canbe economic (land and financial or industrial capital held nationally ortransnationally) intellectual (technocrats think tanks mainstream media)or coercive (in the case of military elites control over the organized use offorce) (di John and Putzel 2009 15 Hickey 2013 3 4)

In maintaining these orders and distributions elites who are party to thesettlementmdashwho are lsquoon the insidersquo if you willmdashhave to manage relation-ships with actors who are not lsquoon the insidersquomdashactors often referred to aslsquoexcluded factionsrsquo In the sometimes dichotomizing language of politicalsettlements these factions are referred to as lsquohorizontallyrsquo excluded andlsquoverticallyrsquo excluded Horizontally excluded factions are those who areopposed to the coalition of elites controlling the state and social ordervertically excluded factions are those groups who are supportive of control-ling elites but who are not themselves party to any of the negotiationsthrough which mechanisms of control and order are determined In a strictsense these vertically lsquolowerrsquo factions are not lsquoexcludedrsquo because they feel anaffinity with governing elites but they are in no way lsquoon the insidersquo Eliteshave to manage relationships with these different factions in order to ensurethat they do not threaten the settlement Such relationships can be managedthrough the exercise or credible threat of force through the framing oflegitimate discourses (eg ideas around what constitutes legitimate forms ofpower and credible models of national development) or through clientelismand the manipulation of incentives (eg through distribution of benefitsentitlements and subsidies)



7

How these relationships among elites and between elites and excludedfactions are managed depends in Khanrsquos terms on the distribution of lsquohold-ing powerrsquo among different actors (ie their power to exercise a hold overothers) The settlement is what holds these different relationships of powertogether in stable form In this sense the nature of the settlement (thebalances of power and how they aremanaged) drives the nature of institutionsand policies These institutions and policies are the formalization of thepractices and rules governing the distributions that lead all parties (includedand excluded) to stay on board with the settlement rather than to openlycontest and seek to overturn it

Various authors have taken these ideas and converted them into typologiesthat seek to relate lsquotypesrsquo of settlements to lsquotypesrsquo of policy regimes or formsof development (Khan 2010 Hickey 2013 Levy and Walton 2013 Levy2014 Booth 2015 Levy and Kelsall 2016) Levy and Walton (2013) andLevy (2014) argue that how elites within a dominant coalition manage theserelationships and approach development depends on whether the broaderpolitical system is characterized by competition among leaders and parties orby the dominance of a particular leader or party Political competition wouldlead elites to recruit clients into the coalition as a means of holding on topower (a form of political settlement they refer to as lsquocompetitive clientelismrsquo)and would therefore tend to operate with shorter-term time horizons orientedtowards recruitment of clients ahead of electoral cycles The notion of clien-telism here is not in the traditional sense of patronndashclient relationships ofdominance and dependence but rather of elites who in competing for polit-ical power need to recruit and sustain supporters both to assume power andthen to remain in power Conversely dominant leaders and parties worry lessabout client recruitment and so use resources for longer-term political projectsbased on particular ideas of development or personal gain a form of settle-ment referred to as a dominant leaderdominant party settlement Dominantpartyleader settlements can range from those underlying the authoritarianmodernization project of a developmental state through to personalized formsof dominance with or without corruption and theft Forms of leadership maybe autocratic or elected but in either instance are dominant

13 Change in Political Settlements

Political settlements frameworks are helpful in different ways in thinkingabout the dynamics underlying bargains in conceptualizing the relationshipsamong states actors within ruling coalitions and other actors and in elabor-ating typologies for classifying forms of rule However they are less powerfulin other regards Perhaps most importantly they have no obvious theory forwhy and how groups emerge decline and become more or less powerful



8

Second and in some regard related to the first point the frameworks haveno clear theory of the relationship between time power and the natureof settlements While political settlements frameworks clearly presume timetalking of different settlements as preceding or following each other they saylittle about how this movement happens and more importantly about theways in which time lsquotrsquo affects time lsquot+1rsquo Yet to the extent that human agentslearn that memories affect action that formative discourses are framed andthen continue to circulate and affect future action and that prior institutionalforms affect the nature and emergence of subsequent institutions thenthese questions of time are critical (cf Watts 2004b Hall 2010 Mahoneyand Thelen 2010)

Such processes of change in political settlements demand theorizationand empirical demonstration Within the language of the settlements frame-work such change would primarily be explained as a result of excludedactors becoming more powerful which requires theorizing how such powermight accrue However it might also be explained in terms of changing ideasregarding what are deemed to be legitimate and acceptable distributions ofpolitical and economic opportunity As such ideas change the strategies ofincorporation clientelism andor repression that have been used to sustain asettlementmay become less effective at quelling unrest and resistance Finallychange may also occur because factions within elites begin to shift theircalculations of the settlements that suit them best and so begin to realignalliances

The sorts of empirical phenomena that might drive such change can alsovary widely

One driver of change may be the emergence of national or subnationalactors who steadily develop the capacity to challenge the dominant settle-ment Such capacity may develop for different reasons the increasing value ofthe income streams controlled by excluded factions the increasing ability ofthese factions to mobilize a broad base of citizens changes in their proclivityto use violence or their ability to reframe debates and challenge ideas thathave historically legitimated particular distributions of opportunity andpower In this sense conflict can be a mechanism of change in the nationalsettlement Across much of Latin America the example of indigenous move-ments comes to mind as a clear case of such emergence of new actors Forwhile indigenous people are still disadvantaged their presence withinnational debates and within the nature of national settlements has expandedenormously over a fifty year period in ways that have shifted the terms ofnational debates (Yashar 2005 van Cott 2007) Another source of changemay be the arrival or increasing leverage of transnational actors who for one oranother reason have the capacity and legitimacy to affect arrangements in anygiven country Such transnational actors might drive changes in dominant



9

ideas contribute to the increase in lsquoholding powerrsquo of certain actors or presentnew opportunities and incentives that lead elite parties to the settlement toreconsider alliances Of many possible examples the joint arrival of NewmontMining Corporation and the International Finance Corporation to Peru in theearly 1990s would be a case in point as it increased the leverage of nationalmining elites helped craft the idea that Peru could be a lsquomining countryrsquo onceagain and helped endorse the idea that opportunities should be distributed inPeru so as to favour mining investment (Bury 2005)

14 Natural Resource Governance and Political Settlements

The logic of the political settlements literature implies that the ways in whichnatural resources (or in our case extractive industries) are governed would be afunction of the political settlement This approach to extractive industrygovernance is important and useful in that it keeps hold of a focus on therelationships between institutions and development while decentring theprimacy of institutions as causal factors and instead placing power and politicsat the core of any analysis This framing suggests that efforts to seek significantchange in sector governance without important changes in the balance ofpower within a settlement are unlikely to prosper A related implication wouldbe that a starting point for reform efforts should be to analyse the existingsettlement and identify room for manoeuvre or lsquocracksrsquo (Holloway 2010Bornschlegl 2017) within that settlement and work from there to identifypolitically feasible changes This would be quite distinct from classic reformstrategies that identify technocratically desirable changes try to implementthem and then end up banging up against the nature of existing powerrelations and inter-elite pacts Similarly it would be distinct from those classicoppositional approaches to resource extraction that focus on direct resistanceand advocacy but frequently lack a language and a strategy for operatingamong and negotiating with elites or for shifting the overall balance ofpolitical power in any way that might be sustained

A political settlements approach to extractive industry governance is alsohelpful because it provides a set of concepts and typologies that enable com-parative discussion of the politics surrounding diverse forms of resourceextraction It is one thing to argue that institutional change is central to anyimprovement in the relationships between extractive industry environmentand development and to recognize that the drivers of institutional change areprimarily political (Karl 2007) It is quite another thing to theorize thosepolitical drivers in a way that allows them to be analysed systematically andcomparatively and on the basis of shared typological frameworks The polit-ical settlements framing offers such a comparative analytical frameworkImportantly in contrast to the bulk of research on extractive industries that



10

treats large-scale mining artisanal and small-scale mining (ASM) and hydro-carbon extraction as distinct objects of study a political settlements approachpermits discussion of these different sectors all within the same framework Itcould also allow for incorporating ancillary sectors such as hydropower andlarge-scale infrastructure into the same analysis3 This is because the primaryorganizing language is not one that is related to the sector but rather one thatdescribes the relationships between power institutions and order

Just as the political settlements lens is helpful for analysing extractiveindustry governance we would also argue that engaging with the questionof natural resource extraction and its implications for development bringsnew insights to the political settlements literature In particular a focus onnatural resources raises issues of place scalar relations and time in ways thatalso help explain how new actors emerge and accrue holding power whileother actors wane and cease to be parts of governing coalitions We willelaborate these ideas in more detail in Chapter 6 in the light of the fourcountry studies Here we simply outline why the weakness (or in manyinstances complete absence) of a sensibility to placespace scale andtimememory is a serious limitation of the political settlements literature

Our starting point for this part of our argument is the concept of lsquoterritori-alizing projectsrsquo (Wainwright and Robertson 2003Wilson 2004 HumphreysBebbington and Bebbington 2010) Territorial projects are efforts to constructand govern space in ways that accord with a given actorrsquos or coalitionrsquospolitical and ideological concerns Though rarely framed as such politicalsettlements are themselves territorial projects If a political settlement isabout securing social order through an elite agreement over the state andinstitutions this order always refers to how a particular geographical spaceshould be governed By extension if a political settlement involves negoti-ations among elites and the management of relationships with excludedfactions then the territorial project underlying the settlement reflects anaccommodation among the distinct territorial projects of the parties to thesettlement as well as coexistence with (and likely domination over) the terri-torial projects of excluded factions In this sense the organization of spaceis an outcome of political settlements But the converse is also the caseconditions set by the contradictions and synergies among these diverse terri-torial projects set limits on the settlement This is reflected in the differentways in which the tensions between centralizationdecentralization unitarystatefederal state single nationplurination and centralized controlterritor-ial autonomy are resolved across different country contexts

The spatiality of natural resources is often a factor in the constitution ofactors and their territorializing projects For example the emergenceof cooperative miners as a political actor that has pursued its own projects ofterritorial control in the highlands of Bolivia is itself a consequence of prior



11

geographies of state-led mining and of existing mineral deposits (becausemany cooperatives emerged from the ashes of these mines) In Zambia theconstitution of miners as an organized group emerged as part of the sameprocess that produced the Copperbelt as a mining area and that group con-tinues a (more implicit than explicit) territorial project that revolves aroundthe Copperbelt Meanwhile in Ghana the inherited spatialndashadministrativestructure of chieftaincies stools and local authorities influences how actorsorganize politically and make spatial and identity-based claims around min-ing and oil development

In each of these examples we have subnational actors pursuing projects ofterritorial control that are in some way related to the geography of naturalresources Also in each instance these subnational actors have made theirpresence felt in national politics and have been involved in ongoing nego-tiations with national elites over who should have access to subsoil resourcesandor how the rents from extractive industry should be shared between theterritory and lsquothe centrersquo Such examples help illustrate the notion that anygiven settlement is also a settlement over the distribution of powers andopportunities between the centre and the subnational and that this distri-bution (coupled with the strength of ideas about the relative importance ofunity and devolved autonomy) is an important factor in the constitution ofpolitical actors For example in the Peruvian mining sector since the 1990ssome of the most important players have been subnational political leaderswho have emerged as powerful in part because of the ways in which thegeography of subsoil resources ideas about decentralization and the struc-ture of subnational government intersect with each other (cf Watts 2004b)This does not mean that the political and territorial projects of these subna-tional leaders are of a kind For instance in the north of the country oneregional governmentrsquos president (himself a product of social mobilization inthe region) was a key player in stopping the expansion of mineral invest-ment In contrast a different regional government president in the south ofthe country played a critical role in securing greater protections and benefitsfor the region as a means of brokering conflicts over resource extraction insuch a way that allowed a large copper mining project to proceed In bothinstances these leaders became important because of the existence of subna-tional administrative powers (otherwise they would not have becomeregional presidents) and because of the political resonance of the territorialprojects that they articulated and the ways in which these have intersectedwith the geography of mining

Examples such as these are also significant because they point to individualand collective actors emerging subnationally through the contentious politicssurrounding natural resource extraction and then becoming lsquonationalrsquo actorsby virtue of being able to exercise power on the national stage This in turn is a



12

reminder that there is nothing inherently lsquonationalrsquo about lsquonationalrsquo elitesSuch elites are not born lsquonationalrsquo nor are they necessarily defined by beingbased in the principal urban centres of the country Rather they are defined byan ability to exercise power over decisions that affect much or all of a nationalterritory They become lsquonationalrsquo elites because they have accrued resourceswhich allow them to exercise influence over the state and the overall distri-bution of assets and rights in society Put another way all actors are place-based but differ in their ability to exercise influences over other actors in otherplaces Certain places are more apt to produce actors with such nationalprojection and capital cities are indeed one such place What these twoPeruvian examples illustrate is that territories with significant mineralresources and the potential to produce very substantial rents are also apt toproduce such actors The types of political project these actors pursue andthus their implications for the political settlement are influenced by theseand other qualities of the places from which they emerge

This does not mean that all place-based actors who become able toinfluencemdashor force themselves into the core ofmdashnational settlements emergeon the back of natural resources but many have In this sense a naturalresource lens draws particular attention to the importance in any politicalanalysis of understanding the place- and resource-based processes throughwhich parties to (or strong excluded factions from) the national settlementemerge Something similar occurs with transnational actors Indeed just asthe lsquonationalrsquo character of certain actors should be understood historically sotoo should the transnational character of other actors That is actors becometransnational just as actors become national That certain actors are lsquotrans-nationalrsquo reflects the fact that they have acquired the power to exercise influ-ence beyond the borders of the national spaces from which they originatedand in which they have their primary locations In turn this acquisition ofglobal power grows out of prior processes of becoming powerful within thedomains of their original national states Once again the geography of naturalresources becomes important here Mining and hydrocarbon companieslike Vale Petrobras (Brazil) or Chinalco (China) for instance only becameinfluential in Africa or Latin America because of their prior emergence asnationally important companies and political actors within their countries oforigin Newmont (the principal owners of Yanacocha gold mine in Peru) grewout of mining in the western United States Broken Hill Proprietary (BHP)grew out of Broken Hill Australia and so on

While these issues are not unique to the natural resources sector a focuson extractive industries does help bring themes of place territory and scalarrelations into the forefront of thinking about how political settlementsare contested and stabilized and how certain elites have emerged to becomeparty to elite settlements A focus on natural resources also brings one more



13

important contribution to political settlements discussions The history ofpolitical contention surrounding extractive industries makes palpable that itis not just abstract ideas (of efficiency national unity development etc) thathelp constitute settlements (Hickey et al 2015) but alsomemories Of coursemuch is remembered in national politics but minerals and over the lastcentury oil are often remembered in particularly resonant ways It is notaccidental that in the opening of Eduardo Galeanorsquos Open Veins of LatinAmerica (Galeano 1971) the book chronicling centuries of extraction in theregion that Hugo Chaacutevez gave to Barack Obama Spanish mining in the Andesfeatures prominently Myrna Santiago (2006) has argued that oil is central toMexican identity and memories of its nationalization still loom large indebates over how the sector should be governed Memories of copper inZambia and its extraction by colonial powers still impinge on political alli-ances and proposals for mining governance In Ghana contestations betweenchiefs and traditional authorities over the distribution of mineral rents areoften based on historical memories that go back to the precolonial period InBolivia silver and gold speak both of pre-Hispanic greatness as well as colonialand imperial subjugation and dependency while tin invokes memories of asmall number of early twentieth-century families who become phenomenallyrich and powerful while delivering very little by way of development Thepolitics surrounding these resources can never be separated from those mean-ings More generally ideas of resource nationalismmdashthat help drive the exten-sion of state control over mining and hydrocarbonsmdashare more often than notimbued with memories of other powers which have taken advantage ofnational resources in times past

15 Extractive Industries and Inclusive Development

Extractive industry faces particular challenges around inclusion in largemeas-ure becausemdashexcept in the case of ASMmdashthe activity of extracting mineralsoil and gas depends upon the existence of significant asymmetries of powerresources and technical expertise The capital intensity of extraction requireselites with control over or access to investment fundsmeasured in the billionsor at least hundreds of millions of dollars The technologies associated withthe investment generate fewer and fewer jobsmdashand show trends towardsincreased use of robotics to operate mine sites in the spirit of increasingoccupational safety (by reducing the number of human jobs where there isrisk) The environmental and social impacts of extraction are concentrated inspace leading to spatial inequalities in exposure to these impacts The rentsgenerated by extractive industry can be very large and are controlled in thefirst instance by just two sets of actors the company and government taxauthorities For these different reasons any model of development based on



14

resource extraction is a compensatory model (Gudynas 2012 Bebbingtonet al 2014) That is it is a model that compensates for these original inherentinequalities and that uses compensation in the form of transfers to offsetthese inequalities and asymmetries and to seek development These transferscan take the form of corporate social responsibility (CSR) programmes publicsocial protection programmes payments for losses indigenous and localdevelopment funds fiscal transfers to subnational governments or chiefs inareas affected by extraction and so on A large part of inclusion linked toresource extraction if there is inclusion therefore occurs through compensa-tion (Humphreys Bebbington and Bebbington 2010)

It merits note that the very idea of inclusion itself implies another asym-metry namely the incorporation of other worlds into the world defined bydevelopment For most people working in development this would be a non-issue on the presumption that of course the rural poor would want greaterinclusion in a world defined by the desirability of increased income consump-tion and access to basic services as well as of enhanced participation in thepolitical systems of the dominant order This is not a position shared by allIndeed some authors writing critically about the extractive economy wouldargue that this notion of inclusion is another form of violence one thatrefuses to acknowledgemdashor at least grant validity tomdashalternative ontologies(Blaser 2010 Yampara 2011 Gudynas 2014 de la Cadena 2015) Suchauthors might argue that any notion of inclusive development should beconsidered through and superseded by concepts such as buen vivir vivirbien and sumak kawsay which emphasize the importance of living well inharmony with other humans and with nature rather than the inherentdesirability of income consumption and economic growth In the Andeancountries at least such authors would argue that extractivism and any devel-opment based upon it should be viewed as destructively colonial because itrequires the despoliation and disappearing of worlds in order to gain access tothe subsoil (whether these are mountain worlds or forest worlds Descola1996 de la Cadena 2015) In these readings enhanced inclusion is less thegoal than the search formodes of joint existence between different worlds thatconnect but simultaneously diverge (de la Cadena 2015)

This is not the approach we take here This is not because we necessarilyreject the arguments of such authors Rather it is a matter of consistency thelanguage of political settlements is an inherently modernist one and so it isonly consistent on our part to proceed with a notion of inclusive developmentinformed by the commitments of modernism As we seek to assess the waysin which political settlements interact with extractive industry governanceand the extent to which this interaction fosters development that enhancesor diminishes inclusion we have focused on process indicators of this inclu-sion That is our primary approach has not been to measure the impacts of



15

extractive industry on inclusion through evidence on increased incomes andconsumption or increased access to services for instance (though we includesome of this data) Instead we have assessed inclusion through the extent towhich extractive industry has affected opportunities for political participa-tion has been used to increase budgets for social spending has led toincreased budget for subnational authorities has created new labour marketsthat expand quality employment and has enhanced the status of poorpeoplesrsquo rights In keeping with the focus on institutions then our emphasishas been on the extent to which extractive industry has enhanced or weak-ened institutions that foster social economic and political inclusion In thissense we work from what might be termed a lsquocritical modernistrsquo view oninclusion that values notions of emancipation progress and rights whilealso allowing for popular reinterpretations of the forms that such aspirationsshould take (cf Peet and Watts 1996 Peet and Hartwick 2015)

16 Summary

To summarize then the basic conceptual framework running through ourargument takes its core ideas from political settlements theory as well as fromearlier work on the politics of extractive industries namely the importanceof pacts bargains and elites the significance of relationships among elitesexcluded horizontal factions and lower level vertical factions the politicaldrivers of institutional form and performance and the sources of stability andinstability in settlements To these we add an emphasis on the significanceof relationships across time the importance of political and cultural ideas tiedto natural resources the interacting influences of transnational national andsubnational actors especially those living in areas where natural resourcesbecome rapidly valorized and the factors driving the emergence and declineof powerful actors In particular we associate much of this emergence anddecline with the ways in which national and local political economies ofminerals and hydrocarbons interact with transnational (f)actors New actorsemerge and decline as part of changes in the economic structure (cf Boix2008) which are themselves often related to articulation with external mar-kets In addition actors can emerge because of articulations with transnationalideas and activists that give new resources and legitimacy to those local andnational actors in ways that are themselves often linked to natural resources

The framework pursued here also suggests the value of making naturalresources central to political settlements thinking This is because inmany coun-tries access to and control over resources and resource rents are central to elitebargains the transnational valorization of resources serves to bring politicalactors into being and into demise and the economic and cultural values appor-tioned tonatural resources become critical elements of state andnation-building



16

2 Research Concerns and Approaches Taken

21 Our Research Concerns

Overall our intent is to use a political settlements approach in a way thatcaptures the key insights of and builds on existing literature on the politicsand institutions of natural resource governance while proposing a moreexplicit typological and analytical framework that helps establish power andpolitics rather than institutions as the central focus At the same time thebook seeks to deepen the political settlements framework in several waysFirst as just noted we believe that the task at hand should not be one ofonly applying a political settlements lens to understand natural resources butalso exploring the ways in which the very qualities of these natural resourceshave implications for how they are governed and the forms of politics thatsurround and drive this governance In this sense we bring a natural resourceslens to political settlements as much as the other way around and work fromthe presumption that the materiality of mineral and hydrocarbon resourcesmatters (Bakker and Bridge 2006 Bebbington 2013b) This materiality isimportant both because the qualities of deposits affect their potential forcommodification and profitability and because these resources have geo-graphically specific locations These locations interact with other geographiesand histories (of populations territorial claims drainage basins land useurbanndashrural and centrendashperiphery relations etc) in ways that affect incen-tives ideas and interests surrounding resource extraction and the emergenceof political actors

Second the book brings an explicit attention to scale and space in under-standing political settlements While we are in no doubt that the sorts ofnational-level relationships that dominate political settlements analysis areindeed key to understanding the nature of these settlements and the ways inwhich they interact with natural resources we will argue that political settle-ments need to be understood as a product of scaled processes running fromthe subnational to the transnational We will argue that the materiality andpolitical economy of natural resources make subnational and transnationalactors particularly powerful players in the constitution of settlements

Third the book recovers the importance of history and historical sensibilityin political approaches to resource governance Most work on politicalsettlementsmdashespecially that which is also concerned to speak to policyandor questions of inclusion and developmentmdashhas tended to focus onrecent time periods4 This stands in some contrast to some of the formativetexts underlying political settlements thinking which address processes overlonger historical periods (North et al 2009 Khan 2010 Acemoglu andRobinson 2012)5 as also does Karlrsquos work on comparative oil states and regimechange (1997) The reason for addressing history is not merely to give a lsquofuller



17

accountrsquo of processes but to show how this history is important in under-standing contemporary arrangements and policy options A longer-term his-torical analysis helps understand more fully the conditions under whichresource governance arrangements change or do not change the nature andorigins of contemporary elites and excluded factions the relative resilience oftheir holding power and how history is remembered (Bebbington 2013b)

22 Our Approach to the Research

There were two points of departure in building a methodology to speak tothese research concerns First was a deeply held belief that Latin American andAfrican experience have much to contribute to each other and that compara-tive work across the two continents is both valuable and valid Teammembershad fruitful prior experience with such cross-regional comparison Whensimilarities emerge in the context of apparently large differences in politicaleconomic and post-colonial context then this implies something fundamen-tal about the phenomenon in question When there are differences then thechallenge to the analyst is to use systematic comparison to tease out the causalrelations at work in the relationships between political economy and the issuebeing studied and why these relations work out differently across space Giventhat the Effective States and Inclusive Development (ESID) initiative of whichthis book is a part has been funded by the UK Department for InternationalDevelopment the overwhelming tendency has been for the programme tofocus on African and Asian countries However we assert that Latin Americarsquoslong-standing and troubled history with natural resource governance make itan important case for the research topic at hand Further we believe thatcomparative analysis between it and Africa yields crucial insights for bothregions and the topics of natural resource governance and political settle-ments more broadlyWe began this project committed to the value of learningacross regions and ended only further convinced of the validity of thisconviction

The second point of departure was a focus on countries as a unit of analysisAs we have discussed in Subsection 21 the project was motivated to gobeyond the methodological nationalism of political settlements researchand to recognize the causal importance of other scales of political action andbargaining However if we were to challenge methodological nationalism itwould be important to explore the significance of these other scales fromwithin a focus on the country level Furthermore notwithstanding ourmulti-scalar approach to the relationship between settlements and the gov-ernance of resource extraction we remained convinced of the importance ofthe national scale Country-level analysis was therefore clearly the appropri-ate entry point for this enterprise



18

The challenge was then to identify countries that it made some sense tocompare This brought us to a focus on Bolivia Ghana Peru and ZambiaThese four countries were selected because they share certain overall similar-ities with respect to politics and natural resources while manifesting specificdifferences that allow for pairwise comparisons All four are low- to middle-income countries though their relative status has changed over time None ofthe four countries has experienced extreme levels of autocratic rule character-ized by sustained forms of kleptocratic natural resource extraction6 Each has along history of hard-rockmining and three of them havemore recent historiesof hydrocarbon extraction (Zambia is the exception) In each case these his-tories are both colonial and post-colonial and have meant that each of theseeconomies has long been substantially dependent on commodity extractionalthough the degree of dependence varies among the countries and also overtime In addition each country has experienced shifts over time in the ways inwhich the extractive sector is governed allowing for an analysis of how farthese shifts can be explained by global trends and ideas international com-modity prices or national and subnational political relationships Likewiseeach of the four has experienced similar national political changes includingperiods when single leaders institutions or parties have been dominant andothers that have been characterized by greater degrees of inter-elite and demo-cratic competition This allowed us to address the effects of these politicalchanges on the governance of extractive industries and to compare forms ofextractive industry governance under dominant partyleader regimes andunder regimes characterized by competition among contending elites

In designing our approach to these country studies our belief in the import-ance of history in political settlements also had implications for how wedefined our primary unit of analysis We opted for what we called a concernfor the longue dureacutee and so decided that in each of Bolivia Ghana Peru andZambia we would begin our analysis at the end of the nineteenth century orbeginning of the twentieth7 While our time horizon is not as expansive asthat often adopted by the French Annales School from which the term longuedureacutee originates it is motivated by the same conviction that many ideasstructures and relationships change only very slowly and that it is importantto capture these slow histories if one is to understand the governance ofextractive industries in four countries with centuries-long histories of miningbut disappointing development outcomes This concern for the slowness ofchange also seemed to us consistent with the very notion of political settle-ments Indeed as will become clear in the chapters we ended up identifyingelements of these settlements that have proven highly resistant to changeover the long term

In this sense then our unit of analysis was a century or so of nationalhistory In order to analyse the relationship between political settlements and



19

extractive industries over this time frame and to keep the country analysescomparative our approach combined the following elements Literaturereview was critical as a mode of building the historical narrative on politicalsettlements In this sense our country level research builds upon and fromother research literature on social political and economic history in each ofthe four countries Second we conducted rounds of interviews with keyinformants These informants were a combination of participants in andobservers of the relationships between politics and extractive industry gov-ernance that we were studying Interviewees ranged from former ministersand elected officials to social movement leaders and miners8 In each countrywe also made use of recent field research in sites of resource extraction inwhich we had been involved in the context of other studies Third workshopswere conducted in each country with a mix of researchers members of civilsociety mining company representatives and public sector actors working onextractive industry governance9 These workshops were important in refiningour interpretations and arguments Research was also presented for feedbackat conferences and seminars Fourth drafts of the country analyses wereshared widely with experts10 for critical commentary and these reviewshelped us to refine our arguments and address crucial themes we may other-wise have missed or misunderstood Fifth the five of us were spread acrossthree continents during the conduct of the research Keeping the researchcomparative and allowing for each of us to feed into the analysis in eachcountry required fluid communication At different stages of the project weconvened to workshop versions of the country studies and attempts at syn-thesis of emerging findings Workshops were held among all five of us on twooccasions and among subgroups of us on three other occasions In the finalchapter we return to these methodological choices and reflect on some oftheir implications for the book as a whole

3 Outline of Book

Following this introduction the core of our book is made up of four chapterseach based on one of the four countries in which we worked The chaptersfollow similarmdashthough not identicalmdashforms They first trace the history ofnational political settlements beginning from the late nineteenth centurythrough to the second decade of the twenty-first century They then relatethese settlements to the changing ways in which miningmdashand in the case ofBolivia mining and natural gasmdashhave been governed and regulated over aperiod of approximately 125 years They trace relationships between theseforms of natural resource governance and the nature of political settlementsand political conflict The chapters also relate this changing governance of



20

natural resources to the changing policies for and patterns of socio-economicand political inclusionWhile history weighs heavily in each chapter the bulkof the analysis focuses on the period since 1990

At one point we debated whether rather than country analyses the bookwould be better organized around key elements in the relationships betweenpolitical settlements resource extraction and inclusion marshalling evidencefrom all four countries to explore those elements in turn Ultimately howeverwe concluded that country level dynamics and the influence of nationalhistory and memory are central to understanding the relationships betweenpolitics and resource extraction A thematic organization of our data woulddisplace the centrality of both country and history in the relationships we areexploring Opting for the focus on the country however makes for somequite long chapters in some sense each chapter is a mini-monograph More-over while the country chapters each engage with the political settlementsliterature and have been in conversation with each other over the course ofthis research we have opted to write each of them as a relatively free-standingpiece recognizing that some readers will only dip into those country analysesof most interest to them As a consequence each country chapter opens with ashort engagement with the political settlements framework and ends withconclusions regarding that framework from the perspective of that particularcountry experience

The risk of this extended country-based approach is that the reader mayget immersed in country details but lose a sense of convergences anddifferences across Bolivia Ghana Peru and Zambia Our final chapter there-fore offers this comparative and synthetic reading of the four country essaysrelating that comparison back to our conceptual framework and our guidingresearch concerns In that chapter we lay out the ways in which we think afocus on extractive industries and natural resource governance makes specificconceptual contributions to political settlements theory around issues ofspace scale time and memory

Endnotes

1 Some of these other resources are also mined as in the case of guano the extractionof which was central to the Peruvian economy of the nineteenth century (eg Thorpet al 2012)

2 For just a few examples of such proposals see the websites and policy documentsof organizations such as the Natural Resource Governance Institute Oxfam theInternational Council of Mining and Metals or the World Bank

3 Investment in hydropower is often closely related to large-scale mining as a sourceof energy for mine and processing sites while infrastructure such as waterways



21

railways and electricity transmission is linked for energy supply and commoditytransport National and transnational elites involved in investments in these dif-ferent sectors are also frequently linked

4 See for instance the long list of Working Papers in the Effective States andInclusive Development Research Consortium here httpwwweffective-statesorgpublications accessed 3 February 2018 These are almost entirely focused onperiods of the last two to three decades

5 While North et al and Acemoglu and Robinson do not directly employ the conceptof political settlement their work is very much in line with political settlementthinking

6 Of course there have been periods of particularly nefarious rule such as that of theFujimori government in Peru and the governments of Banzer and Garcia-Mesa inBolivia Nonetheless these still seem substantially different from the long andsustained commodity-funded machineries of centralized repressive power thathave characterized some other mining and hydrocarbon-dependent economiesand societies

7 Precise periods varied depending on the periodization of settlements in eachcountry

8 Because of potential risks to interviewees in some of the countries analysed in thisstudy and for consistency across the book as a whole in general we decided to citeinformation derived from interviews by referring only to the professional titleandor affiliation of the informant The only exceptions are of visible publicofficials

9 Of these different types of invitees more researchers and civil society actors tendedto accept invitations That said government and private sector representatives didalso attend and in one instance after the workshop in Peru one company repre-sentative asked for a follow-up meeting and gave us several more hours of his timeand views

10 These are noted in the Preface and Acknowledgements



22

2

Mining Political Settlements andInclusive Development in Peru

When one examines the history of Peru the last thing that comes to mind isa stable order or settlement lsquoPendulumrsquo lsquolabyrinthrsquo and lsquokaleidoscopersquo areamong the terms used by scholars to characterize Perursquos volatile political andsocial dynamics1 Since gaining independence from Spain in 1821 the coun-try has had twelve constitutions and over 100 governments while its eco-nomic system has run the gamut from extreme liberalism to statism and backagain A colonial legacy of violence racism and corruption combined witherratic primary export-led development high concentration of wealth andnarrow domestic markets generated patterns of economic inequality andsocial exclusion that were also reflected in the political sphere Democracywith universal suffrage was not achieved until 1980 and successive popularlyelected governments have only been in place since 2001

The relationship between these negative outcomes and Perursquos historicalreliance on natural resource-based exports particularly large-scale mininghas been the subject of considerable debate For years scholars tended toblame Perursquos erratic development on the perils of such dependency and onthe external economic shocks often associated with it (Thorp and Bertram2013) More recently some analysts have shifted attention to the countryrsquosweak institutions and to the lack of effective broad-based political pactsbehind them (Sanborn 1991 Moron and Sanborn 2007) Historically Peru-vian elites have been reluctant to construct stable alliances with broadersectors of the population and have been unable or unwilling to build institu-tions that can govern the national territory buffer external shocks regulatenatural resource extraction and invest in the delivery of collective goods(Schmidt 2004 Paredes 2013)

Within this history however there have been periods of conflict andrealignment in which new leaders or coalitions have promoted significantchanges in the state and in its relation to natural resource extraction and


governance This was the case in 1968 and again in 1992 when authoritarianrulers emerged in the midst of crisis to concentrate power construct allianceswith key actors and change the prevailing economic models and institutionsand their relationship to key export sectors This has also been partially thecase since 2001 as the return to democracy was accompanied by new forms ofpolitical decentralization and innovations in the governance of Perursquos abun-dant mineral resources in line with global trends At the same time thisperiod is also marked by continuity of the liberal economic reforms under-taken during the previous decade (Sanborn 2008 Muntildeoz 2010)

As we examine this case within the comparative framework laid out inChapter 1 we pose the following questions

When have there been periods of political realignment and lsquosettlementrsquowith a relatively stable balance of power between contending socialgroups or classes as reflected in the institutions and policies of the state

How have such political settlements shaped the governance and exploit-ation of Perursquos natural resourcesmdashand more specifically its mineralsmdashand in turn how has this shaped the prospects for future settlements

How have the relationships between dominant elites mineral extractionand the state affected patterns of inclusive development over time

These questions are addressed in Sections 1ndash5 of this chapter In Section 1 wediscuss the relevance to the Peruvian case of recent literature on politicalsettlements institutions and inclusive development as well as long-standingwork on political pacts regime transitions and the so-called resource curseWe also define key concepts used in the rest of the chapter In Section 2 wepresent an analysis of Peruvian history in terms of these concepts and addressthe first question above identifying the main periods of settlement andchange Our second question is addressed in Section 3 which examinesthe evolution of mining and the main forms of governance thereof focusedprimarily on large-scale mining for export but also mentioning the presenceof artisanal and small-scale mining (ASM) operations Section 4 discusses theinteractions of political settlements and mining governance drawing outthe cross-cutting factors that emerge in this case and examining the outcomesof these interactions for inclusive development in contemporary Peru Thechapter ends with a summary of our answers to these questions and finalreflections on this case

In addressing these questions the chapter adopts both an historical andtransnational perspective We stress how the legacies of dominant elites andprevailing ideologies have weighed heavily in the nature of the state yet alsopoint to moments of opportunity in which shifting political alliances andagency aimed to alter such legacies and introduce institutional changes For



24

most of this history the mining sector has been dominated by foreign firmsHence our study also points to the power of transnational actors especiallymultinational corporations and banks but also other states and morerecently transnational social movements

This chapter is based on the analysis of both primary and secondary sourcesGiven the historical scope of the study we draw on extensive historicalliterature covering Peruvian politics and governance in the late nineteenthand twentieth centuries and analyse a broad array of published sources onissues related to mining governance and policies For more recent periodswe draw on data produced by numerous government agencies as well asprivate industry associations2 and on major print media and specializedeconomics and mining publications A series of intensive semi-structuredinterviews with experts and policymakers were also critical to understandingmore recent events

1 How Politics Shapes Development A ConceptualDiscussion with Reference to Peru

lsquoInclusive developmentrsquo is a broad term but generally refers to an equitabledistribution of social and material benefits across the diverse groups within agiven society As Hickey puts it lsquosuch benefits necessarily comprise not onlymaterial and economic gains but enhanced wellbeing and capabilities as wellas social and political empowermentrsquo (2013 3) This moves beyond a primar-ily economic definition of development to one that includes the achievementof equity and citizenship rights and moves beyond an exclusive focus onpoverty to one with broader goals of social justice

What does inclusive development look like in a country like Peru Clearly itinvolves sustaining economic growth accompanied by state capacity to taxprivate wealth and spend public revenues effectively It also involves diversi-fying the economy to decrease dependence on a few primary export sectorsreducing poverty and inequality expanding access to basic services for themajority of the population and also expanding labour rights and socialsecurity Politically this means guaranteeing human and civil rights to allcitizens strengthening democratic institutions and expanding participationat all levels of government Furthermore for development to be inclusive in acountry with a large indigenous population as in Peru it should be multicul-tural including by granting collective rights to communal lands and otherresources and respecting ethnic and cultural differences3 And in a countrywith such diverse but fragile ecosystems it should also involve the rational useof natural resources with effective regulation of the extractive industries andmeasures to protect the environment for future generations


Mining and Political Settlements in Peru

25

How might these outcomes be achieved The framework driving thisresearch proposes to track the conditions under which state capacity andelite commitment to development are achieved and sustained consideringmultiple variables such as intra-elite relations coalitions and pacts develop-ment ideologies popular mobilization and the role of transnational actors(see Chapter 1 this volume Bebbington 2013a Hickey 2013) This requiresa fundamental understanding of the political dynamics that have affectedthe creation of institutions that might advance inclusive development Inaddition it involves not only the horizontal negotiations and bargainsbetween elites but also vertical relations between elites and their followers(Laws 2012 9)

For the purposes of this chapter when we refer to lsquoelitesrsquo we mean theminority of individuals or groups that hold resources which allow them toexercise control over the state and more generally to influence the estab-lishment of political settlements and the corresponding distribution of assetsand rights in society Such resources are often economic (land and financial orindustrial capital held nationally or transnationally) but may also be intel-lectual (technocrats think tanks mainstream media) or coercive (in the caseof military elites control over the organized use of force) (di John and Putzel2009 15 Hickey 2013 3 4) Such elites and the sources of their power changeover time Within the framework of this project it is important to identifyperiods when certain actors accumulate enough power from outside the dom-inant coalition to either provoke its breakdown or force a transition andanalyse to what extent this leads to new agreements and policies that affectinclusive development

The earlier work of authors such as Terry Karl (1997 1986) and MichaelL Ross (1999) among others reminds us that in countries highly dependenton natural resource extraction the role of this activity per se must be takeninto account when examining the evolution of politics and the prospects forinclusive development (Bebbington 2013a) However while extraction maydistort the incentives of political and economic elites in various ways it isalso through politics that the revenues resulting from such activity can bechannelled towards more desirable results How can this be done Somerecent lsquoinstitutionalistrsquo literature argues that if countries like Peru did notcreate inclusive politics and effective states early it may be extremely diffi-cult to avoid erratic and inequitable development outcomes (Slater andSoifer 2010 Acemoglu and Robinson 2012) Yet research and debate ondemocratic consolidation (Schmitter and Karl 1991 Schmitter 1992Munck and Snyder 2007) as well as that of authors such as Bebbington(2013a) and Orihuela (2013)mdashwho look specifically at mining countriesmdashargue that a country can also build such institutions at later stages undercertain conditions



26

This work indicates that there are at least two routes to alter the balance ofpower (1) social mobilization which can drive those in power to makepositive institutional innovations or can change the very balance of power(Tilly 1978 Mahoney and Thelen 2010 Bebbington 2013a) or (2) linking totransnational actors and lsquoepistemic communitiesrsquo which transmit new ideasand incentives for institutional reform (Haas 1992 Bebbington et al 2008Orihuela 2013) These routes may be related but it is important to disaggre-gate them analytically In the case of transnational actors some may exertmore coercive power over national elites even pushing in a way to undermineprevailing settlements Others work through peer networks and voluntaryforms of engagement and still others by informing and empowering localgrassroots activists In the case of social mobilization which has expanded inPeru since 2000 when compared to the 1990s transnational activists anddonors have supported a number of environmental and social policy reformsYet this support has not helped to overcome the fundamentally fragmentedand localized nature of much social movement and protest in Peru and theinability to forge amovement or alliance capable of significantly changing thecountryrsquos current development path (Remy 2005 Panfichi 2011)

When we refer to lsquopolitical settlementsrsquo in this chapter we have in mindwhat Parks and Cole (2010 viii) call lsquorolling agreements between powerfulactorsrsquo which usually refer to informal power pacts rather than formal andpublic ones Such arrangements do not guarantee a stable social order but dohelp to resolve or reduce high levels of political conflict and violence andattain a minimum of political stability and economic performance (ibid alsoKhan 2010 Laws 2012 Schuumlnemann and Lucey 2015) Yet because theyinvolve managing the uneasy relationships between elite interests and thebroader array of interests and needs in society there are ongoing processes ofconflict negotiation and compromise which the ruling coalition attempts toshape and control (Parks and Cole 2010 5) A political settlement remainsoperative to the extent that it is lsquounderpinned by a viable combination ofinstitutions and a distribution of power between organizationally powerfulgroups in societyrsquo (Khan 2010 20)

Within this framework the argument in this chapter can be summarized asfollows There are three broad periods that we identify in the Peruvian caseas lsquosettledrsquo in terms of having relatively stable institutional arrangementsthat have been crucial for the development of economic policy models andthe distribution of holding power among key actorsmdashthis being defined aslsquothe capability of an individual or group to engage and survive in conflictsrsquo(Khan 2010 6) These are the very long period of oligarchic predominance(1895ndash1968) a second period we call statist (1968ndash90) and the neoliberalperiod which dates from the early 1990s Each of these periods is reflected inparticular patterns of state building and economic models as well as



27

governance of mining and related extractive industries However in the faceof global market forces and with pressure from new ideological trends andmobilization from excluded actors each settlement lost strength and eventu-ally became radically altered

Transnational actors have been influential across this history but as we willsee their roles have also changed over time They have limited what parties tothe settlement can do within national institutions and they have also atcertain times helped to undermine a settlement Local and regional actorsincluding mayors and other community-based leaders have not been part ofthe ruling coalition in the three settlements identified or have played amarginal role They have not forged stable alliances with the national politicalelite and have encountered resistance to the projects they desire to roll out orto their efforts to modify investment priorities that come from the capital cityLima The power of these subnational elites lies in their protest capacityrather than their ability to influence the prior definition of state prioritiesThis scenario is exacerbated by the fractured character of competitive politicsmeaning local leaders have few party channels through which to expressvoice allowing Lima-based technocrats operating in the state to define insti-tutional arrangements

2 A History of Political Settlements and Change

As noted above we have identified three lsquosettlementsrsquomdashunderstood as periodsdefined by a relative balance of power between contending social groups thatinfluence the reproduction of institutions including those associated withmining governance the oligarchical statist and neoliberal settlements Ineach case realignments eventually occurred as a result of social conflict andmobilization the changing composition of political elites or both We willdiscuss each settlement in turn

21 Oligarchical Rule and Foreign Capital Domination (1895ndash1968)

Upon gaining its independence from Spain in 1821 Peru was characterized bya weak central state and limited capacity to control its national territory andsustain economic development The early years of independence were markedby enormous instability with powerful leaders (caudillos) and their associatedlsquoclient-groupsrsquo divided among themselves and fearing that the indigenouspeople would stage a rebellion in reaction to their dispossession from nativelands subjection to forced labour and heavy tax burdens (Paredes 2013) Inaddition new political authorities were often willing to cede economic powerto foreign interests including British commercial houses bondholders and



28

foreign contractors competing over access to lucrative deposits of nitrates inthe form of guano or accumulated excrement of seabirds on islands off thePeruvian coast which was widely used for fertilizer (Slater and Soifer 2010Hunt 2011 Paredes 2013 Thorp and Bertram 2013)

The lack of a unified nation and strong ruling coalition is associated withPerursquos loss of major southern territory rich in these nitrates to neighbouringChile in the War of the Pacific (1879ndash83) It was in the wake of the crisisfollowing this war that Peru attained the first semblance of a stable order thelsquoAristocratic Republicrsquo (1895ndash1919) This period was characterized by a dom-inant oligarchy with a liberal economic orientation and elected civilian gov-ernments although with highly restricted suffrage and personalist eliteparties In this period we see an expansion and diversification of exportsincluding oil copper and silver with significant presence of foreign investorsespecially from Britain Germany and the United States

In 1919 the Aristocratic Republic gave way to a long period of authoritarianrule under President Augusto Leguiacutea (1919ndash30) Here there were importantefforts to strengthen the state bureaucracy including the creation of theCentral Bank and the Bank of Agricultural Credit and the construction oflarge irrigation and transportation infrastructure mainly on the coast Leguiacuteaalso gave legal recognition to indigenous communities in the constitution of1920 and created a central government agency for indigenous affairs (Direc-cioacuten de Asuntos Indigenas) However the land-based oligarchy retained enor-mous holding power over the state and continued to control large expanses ofnational territory Hence despite its pro-indigenous discourse this adminis-tration adopted laws that forced thousands of indigenous men into manda-tory unpaid labour in road building while semi-feudal working conditionsunder large landowners in the highlands persisted4

This regime also accelerated Perursquos opening to foreign capital and controlLeguiacutea incurred huge debts to US banks to cover the costs of his public worksand engaged US advisors in strategic areas while allowing widespread corrup-tion to persist British owners of the Peruvian Corporation were given controlover the railroads in perpetuity The Great Depression of 1929 howeveraffected the economy significantly Workers and emerging urban middleclasses were hit hardest by the increased cost of living and a scarcity of basicgoods leading to an increase in labour protests In 1930 Leguiacutea was forced toresign by a military coalition led by Commander Luis Saacutenchez Cerro whosubsequently won election to the presidency in 1931 by a narrowmargin thatwas challenged by the main opposition party the American Popular Revolu-tionary Alliance (Alianza Popular Revolucionaria Americana APRA)

During its first 100 years as an independent nation therefore Peru had aneconomy that was primarily liberal in orientation and after recovery from theWar of the Pacific was oriented towards a variety of primary commodity



29

exports National power was largely in the hands of a coastal oligarchysupported through a prevailing consensus with highland landowners orgamonales and acting as intermediaries for foreign capital (Burga and FloresGalindo 1979 Klareacuten 2004) Large sectors of the population continued to beexcluded from full civil rights as well as from the benefits of export boomsincluding the indigenous people and expanding urban working classes

Because of the development of cities from the 1930s onwards Peru saw theexpansion of modern trades unions and of two mass-based political partiesthat operated more or less clandestinely APRA and the Socialist Party As thepolitical and economic power of the United States expanded significantly inLatin America after the 1930s both parties were critical of US imperialism andof the presence of foreign corporations operating largely as enclaves in PeruHowever the APRA would eventually ally with a sector of the economic eliteand US interests in the context of the Cold War while the Socialist Partywould become the pro-Soviet Communist Party after the death of its founderJoseacute Carlos Mariaacutetegui

During the Depression years the international context was less favourablefor large-scale foreign investment in Peru The contraction of external demandled governments to offer greater stimulation to national industry in thecontext of expanding middle classes and an internal market and expansionof public services such as health and education (Contreras and Cueto 2009Thorp and Bertram 2013) In this period small- and medium-sized miningcompanies with national capital began to develop more projects Howeverprogress towards economic diversification was limited and foreign capitalistsremained in control of large-scale mineral operations Mass-based politicswere also largely repressed or controlled except for a brief lsquodemocratic springrsquo(1945ndash48) in which a civilian president was elected in alliance with the APRAbut quickly deposed by a military coup and a new coalition led by GeneralManuel Odriacutea that gave strong emphasis to foreign investment especially inmining (Portocarrero 1983)

By the end of the 1950s however the elite consensus for economic liberal-ism with foreign domination of leading export sectors began to face greaterchallenges The APRA and the above-mentioned Communist Party would bejoined by other nationalist and reform-oriented parties and by more radicalLeft groups and guerrilla movements inspired by increasing peasant demandsfor land reform as well as by the Cuban revolution and other Third Worldexperiences The 1963 election of Fernando Belauacutende Terry of the moderatePopular Action (Accioacuten Popular AP) party appeared to signal a new politicalrealignment in favour of democratic reform and economic modernizationwithin a capitalist economy However this promise failed in the face of strongopposition from a pragmatic alliance between right-wing pro-oligarchicforces grouped in the Odriiacutest National Union (Unioacuten Nacional Odriiacutesta



30

UNO)5 and the APRA party leadership in congress By exercising veto powerover public spending the APRAndashUNO alliance tied the executiversquos handsMeanwhile peasant organizations impatient with the slow pace of landreform began to forcibly take over lands in the Andean highlands withsupport from leftist guerrillas and the army was sent to brutally repressthem (Klareacuten 2004)

In a global context marked by increasing demand for energy and the cre-ation of the Organization of the Petroleum Exporting Countries (OPEC)Perursquos oil reserves remained in the hands of US corporations and becamethe object of considerable popular demand for more national controlBelauacutendersquos modernizing project included an historical agreement to takeback control of the countryrsquos northern oil fields from the US-owned Inter-national Petroleum Company (IPC) known as lsquoThe Act of Talararsquo which wassigned in 1968 However the lack of transparency in negotiating the dealbecame the breaking point for this administration In 1968 a group withinthe military led by General Juan Velasco Alvarado distanced itself from oli-garchic interests and took power into its own hands installing the Revolu-tionary Government of the Armed Forces (Gobierno Revolucionario de la FuerzaArmada GRFA) (Stepan 1978 Collier 1979)

Although this section covers a very long period of time from 1895 to 1968we have opted to consider it as one overall political settlementmdashin terms ofthe prolonged economic and especially political power of the landed oli-garchy its hold on key institutions and its ability to block social and politicalreforms It is also a period in which the prevailing ideas about developmentheld by the elites in power largely prioritized primary exports includingminerals and largely in the hands of transnational firms Yet we do alsopoint to changes in this period in terms of the growth of a state apparatusand emergence of new political and social actors contesting for power espe-cially during the 1960s with alternative ideas focusing on strengtheninginternal markets and greater national control over key export sectors Suchactors would become dominant after 1968

22 Statism and Accelerated Social Change (1968ndash90)

The GRFA initiated a dramatically distinct political settlement It differed fromprevious military regimes in Peru in that its leaders enjoyed a high level ofautonomy from oligarchic interests and espoused a developmentalist agendaand a desire to dramatically reduce Perursquos dependency on foreign states andcapital (Cleaves and Scurrah 1980) Most contending political elites wereousted from power and the regimersquos major reforms were imposed from thetop down by military leaders and a new team of associated technocrats(McClintock and Lowenthal 1983 246ndash8 Dargent 2015)



31

Ruling out elections and political parties they proposed instead a corporat-ist model of political inclusion with organized participation along class linesinvolving peasant communities trades unions progressive Catholics andformer members of the APRA and the Marxist Left who had been excludedfrom national politics As various authors have pointed out the GRFA elim-inated the landed oligarchy as a political force reduced the political andeconomic weight of foreign capital and made enormous efforts to strengthenthe state apparatus as well as its role in the economy (McClintock andLowenthal 1983 Sanborn 1991 Cotler 1995) Mining hydrocarbons andother productive sectors were nationalized import substitution industrializa-tion (ISI) policies were pursued by encouraging domestic banking and indus-trial groups to expand their presence in the economy while restricting foreignownership and Peru sought leadership in diverse Third World and non-aligned fora

The global context for this lsquoPeruvian experimentrsquo was initially favourablegiven the rise of other progressive and radical regimes in the region and theemergence of numerous SouthndashSouth efforts to empower developing countrycommodity exporters Peru was active in OPEC in the 1960s and was aco-founder of the Intergovernmental Council of Copper Exporting Countries(CIPEC) along with Zambia Zaire and Chile (see Chapter 4 Section 52 thisvolume) The Cold War and the global flow of lsquopetrodollarsrsquo gave Peru bar-gaining power vis-agrave-vis international financial institutions (IFI) and the banksmade large loans against projected oil revenues despite the authoritariannature of the regime (Guasti 1985 Stallings 1992)

Ultimately however the militaryrsquos pursuit of social inclusion through anautocratic regime failed to meet its own objectives It did not eliminate pov-erty or social inequality and instead of eliminating social conflict it fosterednew and more powerful mobilized forms of opposition Furthermore as inGhana Zambia and Bolivia (see Chapters 3 4 and 5) the global economiccrisis of the 1970s placed an enormous strain on the country as it faced rapidlyfalling revenues from the mining and hydrocarbons sectors and growingforeign debt This situation was aggravated because of mismanagement andcorruption in diverse sectors and people expressed their disenchantment withthe austerity measures that the regime began to introduce

In 1975 an internal coup replaced Velasco with the more conservativeGeneral Francisco Morales-Bermuacutedez and harsher repression of labour andpopular protests ensued Important social actors who were considered part ofthe political settlement under Velascowere eventually excluded by the generalsunder the new ruling junta (Sulmont 1980) Strikes and protests in oppositionto the junta culminated in amajor national strike in July 1977 and the decisionby the military to retreat from power (Sanborn 1991) This retreat was negoti-ated from the top down between the generals leaders of APRA and moderate



32

right-wing parties Although the Peruvian state emerged from this period largerin scope and less dependent on the United States and other foreign powers itwas also deeply in debt and as a result the International Monetary Fund (IMF)and Perursquos numerous creditors would continue gaining power over the countrythroughout the 1970s and 1980s (Stallings 1992)

The political legacy of the military regime was a shift towards the Left in thepolitical spectrum with a renovation of the APRA as a centrist force and theemergence of a host of new Marxist parties Having failed to establish a stableform of authoritarian rule however the military opted to initiate a process oftransition to democracy This included an elected constituent assembly inwhich leftist parties held nearly a third of the seats which in turn produced anew constitution in 1979 The constitution reflected considerable agreementamong military and civilian elites in favour of a stronger state and executivebranch than in the 1960s but also contained a broader array of rights andfreedoms than the military desired

In 1980 former President Fernando Belauacutende and his AP party were electedback into power forging an alliance with the more conservative ChristianPeoplersquos Party (Partido Popular Cristiano PPC) to have a majority in congressand share cabinet posts Yet the popularity of this centre-right alliance wastransitory and plummeted as the economy slid into a worsening crisis Con-tinued efforts to impose austerity measures designed by the IMF and imple-mented by a group of liberal technocrats produced widespread protests(Dargent 2015 91) Despite their international ties these technocrats(dubbed the lsquoGrupo Dynamorsquo) faced the constant challenge of negotiatingwith President Belauacutende and the more populist wing of his party As a resultthe fundamentally statist nature of the national economy remained throughthe 1980s (ibid)

Why did the transition to democracy after 1980 not result in a new andstable political settlement Part of the answer can be attributed to externaleconomic constraints coupled with policy incoherence resulting frominternal pressures between neoliberals and populists (Dargent 2015) Yet theexplanation also lies in the process of political negotiation that took place asthe military withdrew from government The new democracy was challengedon one hand by military leaders who retained an enormous degree of powerand impunity and on the other by new leftist parties that continued todenounce lsquobourgeois democracyrsquomdashsome of them leaving open the optionfor armed struggle until well into the decade The new regime was alsochallenged from the start by the Maoist splinter group the CommunistParty of Peru (Partido Comunista del Peru PCP) also known as Shining Path(Sendero Luminoso)mdashinsurgents who operated through force and terror build-ing power in territories and spaces (such as universities and public schools)where the central state had long neglected the population (CVR 2003)



33

In 1985 the country elected a young reformist president AlanGarciacutea Peacuterez ofAPRA who proposed to lead Peru out of crisis restore peace and construct alsquomore social form of democracyrsquo with support from European socialists andother allies (Sanborn 1991) TheMarxist United Left front was the secondmostpowerful political force in the country by this time and leaders of the twopartiesshared similar views on various policy goals Garciacutearsquos initial strategy was to defythe international banks with a moratorium on debt repayments while nego-tiating with a handful of top business leaders for an economic recovery planthat involved their commitment to new investments in the country Whenthese leaders did not respond as expected he turned on them and attempted tonationalize the private banks provoking a schism in his own party and a newneoliberal protest movement the Liberty Movement (Movimiento Libertad) ledby writer Mario Vargas Llosa and joined by some business leaders and youngurban professionals In this period foreign investment fell to minimal levelsthe country entered a dual spiral of political violence and hyperinflation andPeru became largely isolated from the global financial system

23 Neoliberalism in Two Stages (1990ndash2016)

231 FIRST STAGE NEOLIBERALISM AND COMPETITIVEAUTHORITARIANISMIn 1990 political outsider Alberto Fujimori Fujimori was elected president ofPeru Running against Vargas Llosarsquos strongly neoliberal platform Fujimoriinitially marked a difference by promising not to privatize state enterprises orundertake other market liberalization measures and his first cabinet includedprominent figures from themoderate Left Yet within six months in office heditched his leftist allies and brought on a team of neoliberal advisors drawnfrom and funded by the World Bank and other IFIs as well as sectors of thePeruvian business community and the ranks of Movimiento Libertad (Wise2003) Being close to the president these lsquoteacutecnicosrsquo progressively gained sig-nificant autonomy from congress and the competitive political system andfocused on the creation of a stronger Ministry of Economy and Finance andother market-friendly institutions (Orihuela 2013 Dargent 2015)

Throughout the 1980s the Shining Path gained presence in remote areas ofthe Peruvian Andes and the Amazon where poverty was widespread publicservices and infrastructure were minimal and the state had little presenceor authority Through a combination of political mobilizing coercion andterror the group gained control in large parts of the country and by 1990much of the country was under states of emergency with restricted civilliberties and shared politicalndashmilitary commandos

In order to pursue structural adjustment and combat the Shining Path moreaggressively and without any significant opposition Fujimori opted to forge



34

an authoritarian coalition with military officers and key leaders of privatebusiness staging a lsquoself-couprsquo in 1992 that included temporarily shuttingdown congress intervening in the judiciary and censoring the major mediaThese measures were accepted by a majority of Peruvians living in a context ofpolitical violence and extreme economic instability Pressure from the Organ-ization of American States (OAS) and international human rights organizationsled Fujimori to maintain spaces of political competition however including aconstituent congress that produced a significantly more liberal constitution in1993 in which the state was limited to a subsidiary role in the economy6

The dramatic realignment instigated by Fujimori led to what we consider anew political settlement in Peru in which powerful elites coalesced aroundpro-market economics and the radical reopening of the economy to inter-national competition Two and a half decades later there are still few politicalcontenders who question the decision to return the most productive sectorsof the economy to private hands and virtually none with real power thatpropose re-establishing state-owned enterprises in mining or other keyexport sectors

Another important characteristic of the settlement that emerged in the1990s is the centrality and political power of technocrats who acted asideologues and agenda setters as they drafted and implemented public policyAlthough both the military and prior civilian governments had employedtechnical advisors they tended to have diverse partisan loyalties and ultim-ately it was the generals or the politicians who remained at the forefront ofpolicymaking Success with stabilization in the 1990s however allowedtechnocrats without strong party ties to expand their influence in cabinet-level positions (Abusada et al 2000 Wise 2003) and to lsquo[launch] more ambi-tious market reforms that transformed the state and structure of the economyrsquo(Dargent 2015 98) Concentrated in the Ministry of the Presidency and theMinistry of Economy and Finance they tended to come from a small group ofprivate universities and were supported by a network of new think tanks andconsulting firms (Wise 2003 238ndash9) created by private business interestswith funding from the World Bank and the United States Agency for Inter-national Development (USAID) (Dargent 2015 139)

Neoliberal reformers argued that deregulation of labour markets wouldencourage employers to join or remain in the formal sector by lowering thecosts of hiring and firing workers (Chong Galdo and Saavedra 2007 11ndash12)However the share of informal sector labour actually expanded during thisperiod while trades unions were broken or discouraged Privatization andderegulation also created sustained problems with quality and safety in suchvital sectors as public transportation and basic and higher education and didlittle to expand access to social security for the majority of Peruvians (Bielich2009 29 Pasco-Font and Torero 2001)



35

232 SECOND STAGE NEOLIBERALISM DEMOCRACYAND DECENTRALIZATIONIn 2000 President Fujimori fled the country and resigned from Japan afterrevelations of major corruption in his administration and the military reachedthe independent media Yet the pattern of technocratic governance instigatedduring the Fujimori years survived his downfall and the return to a moredemocratic regime thanks to a seriously weak and fragmented party systemdebilitated trades unions and popular organizations and a lack of strongideological leadership This power vacuum served to further empower thenew class of technocrats who ironically shared a hostility to the state withadministrative knowledge thereof (Vergara and Encinas 2016) Hence weargue that the return to democracy did not represent a totally new politicalsettlement

The post-Fujimori period has been characterized by sustained economicgrowth fostered in part by strong mineral prices and production Yet it hasalso been characterized by high levels of social conflict and a limited legitim-acy of the so-called lsquopolitical classrsquo and democratic institutions (Crabtree2011 Panfichi 2011) Perursquos elected presidents since 2001mdashcentrist AlejandroToledo Manrique (2001ndash06) centre-right Alan Garciacutea (in his second term2006ndash11) and centre-left Ollanta Humala Tasso (2011ndash16)mdashhave had no realsocial support bases to rely on and have been unable to build them from abovedespite expanding budgets and social programmes This is reflected in publicopinion polls and in the inability of their parties to run credible successors orretain an important congressional base (Dargent and Muntildeoz 2012)

In this period the power of private corporationsmdashnotably those related toextractive industries telecommunications and bankingmdashhas been exhibitednot only at the level of national policy but across society During the 2000sbusiness leadership associations and lobbies continued to be outspoken intheir demands on government and for the most part in their support forcontinuing with an economically liberal policy direction with priority placedon primary commodity exports Successive Peruvian governments havestrongly encouraged the movement towards corporate social responsibility(CSR) and have given incentives to private companies to provide essentialpublic goods and services in their areas of operation (Sanborn 2008) Thishas been questioned by critics who point to the risks of giving privateactors greater responsibilities for public functions and potentially undermin-ing rather than reinforcing government capacity (Arellano-Yanguas 2011Perla 2012)

This description suggests continuity in the long-standing history of con-centration on primary commodity exports to drive economic growth andgenerate rents for the state This creates asymmetries of power in favour ofthe worldrsquos most powerful corporations and their national partners in Peru



36

Yet in other ways the post-2000 period represents a new stage in Peruvianpoliticsmdashthe longest uninterrupted period of democratic government to dateIn this context a wider variety of domestic and international actors are vyingfor power and new channels for local participation and contention placingnew claims on the political agenda including environmental regulation andrespect for indigenous rights This is undeniable even if official discourse andpolicies have not been consistent The extent of change and continuity in thisperiod is discussed further in Section 4 in regard to the role of mineralextraction and governance and in Section 5 in regard to the state and politicaldynamics

3 Mineral Extraction and Governance over Time

As we have seen Perursquos economy has been fundamentally tied to the export ofprimary commodities as generators of revenue for the state andminerals havebeen the leading sector for much of this history As shown in Figure 21 theimportance of mining to the economy has increased over the time periodcovered by this chapter Figure 22 also shows that Perursquos overall GDP tends totrack closely with mining GDP Peru is one of the worldrsquos leading mineralproducers withmajor deposits in copper gold silver zinc and lead as well asother resources Since 1960 mining products have accounted for over half oftotal export value and up to a quarter of total tax revenues Figures 23 and 24show data on mineral exports and tax revenues from mining whichbegan in the twenty-first century For most of this history large-scale miningoperations have been privately owned and dominated by foreign capital withthe exception of two decades under state-owned enterprises in the 1970sand 1980s

In this section we shift from an analysis of Perursquos overall history of politicalsettlements and change to a discussion of the changing nature of mineralgovernance and extraction in each of these periods The objective is to discusshow or to what extent the political settlements shape the governance ofmining and how this in turn shapes the prospects for future settlements

31 Foreign Capital Domination (1895ndash1968)

At the end of the nineteenth century silver mining in the central and north-ern highlands of Peru was mainly in the hands of national owners andthis activity helped Peru recover from the impact of the War of the PacificNevertheless fluctuating international prices and the change of currencypattern from silver to gold eliminated the principal domestic market fornational silver producers (Thorp and Bertram 2013) Thereafter began a process



37

of denationalization which coincided with the emergence of copper as aninternationally demanded mineral the production of which required majorinjections of capital and technology which neither local entrepreneurs northe state could provide (Deustua 1995 Portocarrero 2013)

Denationalization was also encouraged by direct government policies andliberal-oriented national elites and facilitated by innovations in intercontin-ental sea transport and the construction of railroads to the most importantmining centres of the central highlands (Miller 2011) A new liberal miningcode in 1901 equalized conditions for foreign and national investors gaveinvestors property rights over land and subsoil resources (eliminating a350-year-old Spanish colonial tradition of state ownership of the subsoil)and ratified a tax freeze for all export-oriented activities (Becker 1983)

050

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

100

150

200

250

300

350

400

450

Figure 21 Mining share of GDP Peru 1890ndash2012 (millions of nuevos soles 2007 inlogarithms)Source Seminario (2015 937)



38

According to one Peruvian historian interviewed for this chapter this wasaimed at providing security to private investors after years in which warringcaudillos used state power to obtain resources through expropriation (see alsoContreras y Cueto 2009 208)

As a result of these measures the US-owned Cerro de Pasco Mining Com-pany (CPMC) accumulated significant economic and political power throughthe purchase of existing small- and medium-scale mines from local investorsand huge expanses of land from Peruvian owners as well as buying shares inother mining companies and smelting plants and participating in 1904 in theconstruction of a rail route from the mines This enormous accumulation of

GDP (var real) GDP Metal Mining (var real)

062

545416416

496 629629

753 852 914

105105

845645 595 582

239 328

12801280 12961296

627627 515654

092376

715715

ndash212ndash212 ndash272ndash272 ndash212ndash212

251 426426

1548

ndash500

000

500

1000

1500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

ndash212 ndash272 ndash212

416629 105

1280 1296

627 715

426

ndash223ndash223

Figure 22 GDP and mining GDP variation Peru 2001ndash15Source Authorsrsquo elaboration with data from BCRP (2017)

0

10

20

30

40

50

60

70

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

5000

10000

15000

20000

25000

30000

Mill

ion

US$

Mining Exports (million US$) Total Exports

Figure 23 Mineral exports in value (US$ million) and share of total exports Peru2001ndash15Source Authorsrsquo elaboration with data from BCRP (2017)



39

power and capital by CPMC made it difficult for successive governments toregulate the firmrsquos activities (Klareacuten 2004 Thorp and Bertram 2013)

After a period of rapid growth of mineral production between 1895 and1929 the bonanza came to a halt with the Great Depression (Seminario2014) However production by foreign mining firms remained importantto the country going from 97 per cent of total mineral exports in 1929 to79 per cent in 1939 (Thorp and Bertram 2013) During this period domesticcapitalists began to exploit other minerals that were gaining in importanceover copper first gold and then lead and zinc Along with commercial fishingand cotton production this primarily medium-scale mining helped to boosteconomic recovery The resurgence of domestically-owned mining was sup-ported by the state through a series of measures including preferential accessfor Peruvians to non-concessional gold deposits (until 1936) the creation of anational Mining Bank in 1941 to provide credit to Peruvian miners and theintroduction of price and import controls (Dore 1986 Orrego 2012) Duringthis period Peru also saw an initial phase of expansion in artisanal goldmining along riverbanks in Cuzco Puno and Madre de Dios (Pachas 2012)

During the brief democratic opening (1945ndash48) the government also intro-duced a new framework for labour rights including recognition of tradesunions and procedures for dismissal and retirement that weremore favourableto workers helping to strengthen the mine workersrsquo confederation amongother labour groups (Kruijt and Vellinga 1983 72ndash75) However by the1950s the expansion of domestically owned mines was limited by the ten-dency of the large American firms to accumulate and retain the largest mineraldeposits and vast expanses of land While Peruvian firmsrsquo finances began to

0

5

10

15

20

25

30

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Mill

ion

s n

uevo

s so

les

Total Mining Tax Revenues of Total Tax Revenues

Figure 24 Total tax revenues and share from mining (millions of nuevos soles) Peru2000ndash16Source Authorsrsquo elaboration with data from SUNAT (2017)



40

improve again in the 1940s unfavourable price conditions for lead and zincmdashthe minerals most exploited by Peruvian investorsmdashwould also hold backnational industry

The 1950s marked another milestone in the dominance of large-scaleforeign-owned mining operations in Peru linked to technological progressin the global mining industry as well as more favourable government policiessuch as a decrease in tax rates The military government of General ManuelOdriacutea dismantled protectionist measures introduced during the 1930s and1940s under pressure from business and in the interests of replacing under-ground mines with investment in larger open-pit mining that was thendominating the international copper industryWithout this technology Peru-vian copper production had become less competitive (Dore 1986)

Under the new Mining Code of 1950 two major contracts for open-pitprojects were signed with US-owned companies The first with MarconaMining Company (MMC) was signed in 1952 to launch the development ofan iron ore mine on the southern coast The second with Southern PeruCopper Corporation (SPCC) was signed in 1954 to enable exploitation of acopper deposit further south in Tacna (Toquepala) Both deals led to a newmining boom with increased exports and significant benefits to foreign cap-ital By 1960 the three largest US-owned companies accounted for 73 per centof total mineral production (Thorp and Bertram 2013) However somemedium-sized Peruvian mining companies also emerged in this period not-ably Arias-Balloacuten the Benavides Group and Picasso (Becker 1983)

As mentioned in Section 3 in the late 1950s social mobilization grewstronger around demands for agrarian reform and national sovereignty overnatural resources Land possession by mining companies in the central high-lands was a primary focus for protest The civilian government of ManuelPrado who governed in a widely criticized alliance with the then-bannedAPRA party (the so-called lsquoConvivenciarsquo) responded timidly creating an Insti-tute for Land Reform and Colonization (Instituto de Reforma Agraria y Coloniza-cioacuten IRAC) which focused on studies aimed at laying the groundwork forfuture reform This government also promoted the creation of a steel plant inthe port of Chimbote on the northern coast with the idea of industrializingproduction and launched the beginning of the commercial fishmeal industryin the same area The most lucrative mining projects however remained inforeign hands and tax rates on mining remained around 20 per cent whichnationalist forces considered too low (Contreras and Cueto 2009)

Under the more reformist government of Fernando Belauacutende tax rates onmining were increased to 48 per cent generating opposition from influentialmining interests claiming that the existing mining code guaranteed them taxstability (Hunt 2011) At the same time official commissions were created inparliament to investigate alleged excess profit repatriation by MMC and



41

SPCC These measures reflected government efforts to gain greater controlover foreign capital

During this period there was another major expansion of mining produc-tion led by the large-scale operations of SPCC (40 per cent of total mineralproduction) MMC (22 per cent) and the expansion of the CPMC operations(27 per cent) (Thorp and Bertram 2013) Yet despite increased world copperprices during the 1960s there were no furthermajor investments in the sectorapparently because of caution on the part of companies that held depositsin reserve in hopes that domestic political conditions would improve (ibid)Map 21 shows the location of all mineral deposits that the Ministry of Energyand Mines in 1967 considered to be potential mining districts the vastmajority of which were not developed at that time Meanwhile small-scalegold extraction in the Amazon continued to grow in this period with greaterstate support since 1950 in terms of concessions and of finance through theMining Bank (Pachas 2012 Torres 2013)

32 Nationalism and State Ownership (1968ndash90)

While the GRFA also conceived mining to be important to growth as well as asource of financing for an ambitious industrialization programme the gen-erals initially hoped that private investors would continue to take part(Ballantyne 1976 Saacutenchez 1981) For the most part however the mixedinvestment schemes did not encounter private sector enthusiasm (Conaghanand Malloy 1994)

In 1969 the junta negotiated with SPCC for a major new copper project(Cuajone) obtaining more favourable tax trading and foreign exchangearrangements than the state had previously enjoyed The company alsoreturned the exploitation rights over a deposit (Quellaveco) located betweenCuajone and Toquepala that the government wanted to exploit to expanddomestic production7 However negotiations failed with the other two USmining companies ending in nationalization of the huge CPMC in 1974 andof MMC in 19758 During the 1970s the participation of some nationalinvestors in the mining sector did increase as foreigners transferred sharesto Peruvians to avoid being expropriated (Torres 2013) but this was primarilyin small- and medium-sized mining operations while the state remained themajor large-scale operator (Becker 1983 Glave and Kuramoto 2007)

The military regime also brought important changes in mining governanceincluding the creation of the first Ministry of Energy and Mining (Ministeriode Energiacutea y Minas MINEM) in 1969 and a new Law of Mining in 1970 whichre-established the leading role of the state in production (Becker 1983Guasti 1985) Two large state-owned enterprises CENTROMIN and HIERROPERU were created by the nationalization of CPMC and MMC respectively



42

ECUADORCOLOMBIA

N

BRAZIL

LIMA

AyacuchoAyacucho

Cusco

Puno

Arequipa

Trujillo

CajamarcaCajamarca

Piura

Pacific Ocean

SOUTHAMERICA

Peru

Locations of extractive industry potentialas identified by MINEM in 1967

Most significant operating mines by estimatedvalue as identified by MINEM in 1967

Departments

0 200 km CHILE

Tacna

BOLIVIA

Cajamarca

Ayacucho

Map 21 The national distribution of mineral deposits and potential mining districtsidentified by the Ministry of Energy and Mines Peru (1967)Source Elaborated on the basis of original map identified in the archives of the Ministry of Energyand Mines Institute of Geology and Mining (1967)



43

CENTROMIN would own and operate the seven mines that had belonged toCPMC as well as its concentration plants foundry and refinery based in LaOroya Both would later participate in a third project Minera Asociada Tin-taya9 MINERO PERU was also created to operate a zinc refinery the CerroVerde copper mine and the still-to-be-exploited mines of Quellaveco andAntamina while MINPECO was created as the state-owned minerals trader

In a situation similar to that experienced by Zambia (see Chapter 4 thisvolume) the global economic recession after 1973 led to a significant slow-down in mineral production while the state appropriations left the privatesector very reluctant tomake new investments This led to a decline of averageannual growth in production from 94 per cent in the 1960s to just 35 per centbetween 1970 and 1979 (McClintock and Lowenthal 1983 Aste 1986) Thepending debt crisis after 1976 and successive stabilization programmes furtherlimited state capacity to invest in this sector During this period the stateactively promoted small-scale goldmining through the nationalMining Bankboth in the Amazon and in the Puno region near the border with BoliviaThese are areas where efforts to eradicate ASM would take place decades later(Torres 2013 Cano 2015a) Near the end of its term in 1978 the militarygovernment promulgated a new Law of Promotion of Gold Mining in thePeruvian Amazon and also granted concessions to ASM organizations thathad been left unemployed by the departure of foreign investors or by expro-priations that were not considered profitable

Although 1980 brought a change in political regime governance of themining sector did not change dramatically in the subsequent decade A newGeneral Mining Law (Ley General de Mineriacutea) was passed in 1981 with the goalof promoting more benefits for private companies and eradicating the gov-ernment monopoly over the metals trade This was not enough to reviveprivate investment however and major operations remained largely underthe control of state-owned enterprises Ideologically President Belauacutende andhis finance minister Manuel Ulloa were favourable to privatization of thissector but their party followers did not necessarily share that agenda Inter-viewees with both public and private experience10 noted that strong resist-ance from public employeesrsquo and mine workersrsquo unions as well as the MarxistLeft parties also made it politically risky to attempt such a move and within afew years that government would be mired in crisis and replaced by leaderswith no desire to privatize

During the 1980s mining production and exports decreased because of acombination of low world prices and the anti-export bias of prevailing eco-nomic policies Mining investment was also affected directly by internalarmed conflict initiated by the Shining Path in the 1980s with millions ofdollars in losses due to sabotage and work stoppages leading in some casesto the full militarization of mining camps and operations (Comisioacuten de la



44

Verdad y Reconciliacioacuten 2003) The decade ended in economic and politicaldisaster for the country as a whole with increasing external debt unprece-dented inflation and public finances nearly bankrupt In the mining sectornew explorations for large-scale deposits were virtually halted and state-runcompanies which continued to account for 60 per cent of total miningproduction in the 1980s operated under the burden of generating foreignexchange for other public expenditures and were also subject to considerableinternal corruption (Fitzgerald 1979 Glave and Kuramoto 2007)

33 Neoliberalism and Mining in Two Stages (1990ndash2016)

After 1990 both internal and external pressures made the political settlementbased on state-centred development strategies unsustainable What followedwas a period in which neoliberal reforms were rapidly and radically imple-mented by central government technocrats and the most productive sectorsof the economy were all returned to private hands and opened to globalcompetition Large-scale mining in primarily foreign hands returned to aposition of prominence Major aspects of this neoliberal settlement remainedin place with the return to democracy after 2000 while new social demandsand actors emerged with force accelerated by a process of partial politicaldecentralization Greater political competition and more conflict aroundmining operations has been manifest after the turn of the century Hencewe see the post-Fujimori period as one of realignment and modification ofthe mineral governance regime while not yet constituting a distinctive newsettlement

331 FIRST STAGE PRIVATIZATION AND EXPANSION IN THE 1990SAccording to most direct accounts from the 1990s promoting the miningsector was not initially a priority for Fujimori and his advisors Yet the inter-national context together with the quality of Perursquos mineral deposits andits new policy environment led the sector to account for 64 per cent of thetotal investment received as a result of privatizations in this period while just13 per cent of these privatizing transactions were mining related (Pasco-Fontand Saavedra 2001)

Reform of the mining sector drew collaboration from experienced profes-sionals within the state-owned mining enterprises as well as from someprivate sector miners who assumed public functions11 At the outset govern-ment officials also worked to resolve outstanding conflicts between privatecompanies and the state12 Measures were also taken to guarantee tax andexchange rate stability and offer attractive tax incentives (Muntildeoz and Vega2000) Mineral commercialization was also liberalized and the concessionsystem simplified13 These measures encouraged by World Bank advisors



45

and domestic experts were considered necessary to attract new investors towhat was still a high-risk country

Policymakers in this period had reduced space for negotiationwith investorsaround purchase prices given the risk involved and the poor shape of someof the existing assets which would require considerable new investmentto modernize From 1991 to 2000 the privatization of mining operationsgenerated an estimated US$12 billion in direct income for the state (RuizCaro 2002 28 Bury 2011) And while mineral exploration activities doubledworldwide in the 1990s they multiplied twentyfold in Peru in this period(Poveda 2007) This involved expansion not only in areas with existing min-ing operations in the central and southern highlands but also into parts of thecountry where people were not accustomed to large-scale mining includingareas with fragile ecosystems or thriving agricultural interests According to theGeological Mining and Metallurgical Institute (Instituto Geoloacutegico Minero yMetaluacutergico INGEMMET) a government agency and as shown in Figure 25the total land area authorized for the granting of concession rights grew from78 per cent of national territory in 1991 to 12 per cent in 1999 Transnationalcapital also renewed its predominance in themining sector in the 1990s aloneor in partnership with national firms (Aste 1986 Bebbington and Hinojosa2011) By 2000 eleven of the worldrsquos twenty major transnational miningcompanies were operating in Peru (Bury 2011)

0

2

4

6

8

10

12

14

16

18

20

0

5000

10000

15000

20000

25000

30000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Titled rights Pending rights of National territory

Figure 25 Evolution of mining rights and share of national territory Peru 1991ndash2016Source Authorsrsquo elaboration based on data from INGEMMET (2017) and Glave and Kuramoto(2007)



46

Trades unions and professional associations saw their political and eco-nomic power recede significantly under neoliberalism while business andassociations of business interestsmdashthe National Confederation of Private Busi-ness Institutions (Confederacioacuten Nacional de Instituciones Empresariales PrivadasCONFIEP) the National Society of Mining Oil and Energy (Sociedad Nacionalde Mineriacutea Petroacuteleo y Energiacutea SNMPE) and to a lesser extent the NationalExportersrsquo Association (Asociacioacuten de Exportadores ADEX)mdashgained in prestigeand access to power In themining sector transnational firms heldmost of thelarge new mining projects such as Antamina (one of the ten largest coppermines in the world) while some national industry leaders also had consider-able political power

In this period World Bank and IMF staff also encouraged Peruvian policy-makers to establish new environmental and social legislation that could moreeffectively prevent or reduce the negative impacts left behind by past extract-ive activity (Szablowski 2002 Arellano-Yanguas 2011) Instead of creating aseparate authority for oversight of environmental standards in this and otherindustries however policymakers opted to incorporate enforcement of envir-onmental norms into each line ministry For example an environmentaloffice was established for the first time within MINEM in 1992 the GeneralDirection of Environmental Issues in Mining (Director General de AsuntosAmbientales Mineros DGAAM) This produced an apparent conflict of interestin regard to mining as MINEM was charged with both promoting new invest-ment and implementing regulatory standards often resisted by the compan-ies that invested (Charpentier and Hidalgo 1999 World Bank 2005)

Peru also introduced the requirement for investors to present an environ-mental impact assessment (EIA) for new projects during this period as well asan environmental adjustment and management plan (Programa de Adecuacioacuteny Manejo Ambiental PAMA) to manage legacies of past operations Howevertestimonies from this period suggest that in practice the environmentalnorms established in the 1990s were driven by international pressures butas with other such policy innovations (including the 1989 Indigenous andTribal Peoples Convention of the International Labour OrganizationmdashILO169 see Section IV-C-2-c) these were not priorities of the elites withinPerursquos existing political settlement and were not implemented with thekind of institutional and political support necessary to give them teeth Fur-thermore in the 1990s environmental conflicts around mining were not assalient as they would become in the next decade as more mining investmentsmoved into the operation stage

In terms of ASM the Fujimori administration did not adopt any new legis-lation or policy initiatives in the first half of the 1990s From 1995 to 2000however the government took limited steps to formalize and regulate theexpansion of ASM in the Amazon including the first Registry of Artisanal



47

Miners However the overall liberalization of the mineral trade and liquid-ation of the state-run Mining Bank in a context of favourable internationalgold prices not only contributed to the largest expansion of this sector to thatdate but also to a proliferation of informal producers and the atomization ofgold traders operating parallel to the state (Cano 2015a)

332 SECOND STAGE CONTINUITY AND CHANGE IN MININGGOVERNANCE IN THE TWENTY-FIRST CENTURYThe return to democracy in 2001 was followed by a new bonanza period inglobal mineral prices and the entry into the production stage of several newlarge-scale mining operations (Glave and Kuramoto 2007 Portocarrero et al2007) From 2002 to 2012 total mineral exports increased in value fromUS$32 billion to US$274 billion accounting for over half of total Peruvianexports Mining concessions also continued to expand nationwide after 2000By 2015 around 142 per cent of national territory had been titled for miningrights or mining rights in process although a far smaller sharemdashjust 122 percentmdashhad been authorized for mining activity (MINEM 2016 Map 22 showsthe national geography of these different types of mining rights at the begin-ning of 2017)14 From 2005 onwards this boom in extractive activity beganto generate considerable net profits for investors and hence enormous taxrevenues At its peak in 2007 the mining industry accounted for a third of allprofits generated a quarter of all direct taxes and half of all income taxes paidin the country (Zegarra 2014)

In this period ASM also gained in numbers of miners and political influ-ence becoming funders powerbrokers and even candidates in subnationalelections butmdashin contrast with the Bolivian case discussed in Chapter 3mdashwithout relatively stable pacts with the national level and political partiesThey also provided funding to national level politicians and parties whopromised to defend their interests Initially this sector was also allied withinternational aid organizations including the World Bank which saw theformalization of this activity as a route to inclusion (World Bank 2005Mosquera 2006) With the support of regional and local politicians the firstlegal framework to formalize small-scale miners was enacted in 2002 How-ever the intensity of lsquogold feverrsquo after 2005 induced by booming pricesundermined attempts by the state to establish order and encourage moresustainable practices With political decentralization the authorization andregulation of ASM was transferred to regional governments some of whichwere run by prominent small- andmedium-scale miners and lacked either thetechnical capacity or political motivation to enforce high environmental andsocial standards (Cano 2015a)

After 2006 central government policies surrounding ASM took a sharp turntowards an emphasis on contention and repression (Medina 2014 Valencia



48

ECUADORCOLOMBIA

BRAZIL

LIMA

Trujillo

Pacific Ocean

SOUTHAMERICA

Peru

CHILETacna

Operation licenses

Exploration licensesConcessions withoutmining activityDepartments

BOLIVIA

0 200 km

N

Map 22 The national distribution of different types of mining licence Peru January2017Source Elaborated on the basis of maps produced by INGEMMET 2017



49

2014) This change coincided with the negotiation of a Free Trade Agreement(FTA) with the US under which Peru committed to the creation of a newMinistry of the Environment (Ministerio del Ambiente MINAM) that receivedsignificant support from the US Germany Japan and other internationaldonors At the same time there was also strong pressure from internationaland local conservationists to do something about the lsquoecological catastrophersquobeing created by artisanal miners especially in parts of the Amazon Increasesin scale and intensification of extraction methods employed in ASM certainlycontributed to this reaction as well as an association of the sector with moneylaundering and other illegal activities (Cano 2015a) Indeed in some of itsmaps the government associates ASM as much with illegality as informality(Map 23) For its part MINAM was lsquocolonizedrsquo by professionals from envir-onmental NGOs and movements who formed part of global networks inwhich eradication of this unregulated small-scale activity was a high priorityThey thus gave this task new prominence but with a focus on suppressionrather than formalization (ibid)

ASM also created tensions in some areas with larger formal sector miningcompanies In some regions there were overlapping claims for land andminerals between larger firms and artisanal miners who were also communityleaders and authorities The emphasis on containing ASM is thus framed asfavouring the claims of the larger firms Although Ollanta Humalarsquos Nation-alist Party received political support and alleged campaign donations fromASM under that administration the militarization of this effort and intensifi-cation of interdiction actions increased while efforts at formalization werelargely abandoned (Cano 2015a)

An additional key theme of this period is that the return to democracy camewith a significant increase in social conflicts related to mining activity Theseinvolved a variety of demands including respect for indigenous rights claimsrelated to environmental and social impacts disputes over land and waterresources and demands for greater distribution of the tax revenues and othereconomic benefits obtained These conflicts led Perursquos governments to intro-duce reforms aimed at reducing tension or responding to underlying demandsassociated with mining expansion (Bebbington 2012) Although a detailedanalysis of these policy changes and reforms is beyond the scope of thischapter what follows is a summary of the major reforms15

3321 Taxation and revenue redistribution and transparencyThemean rate of income tax onmining operations has been around 30 per centin Peru in the last decade and a half which is average relative to other countrieswith major mineral exports in South America (EY 2014) By 2006 howeverthere was growing public opinion critical of the alleged windfall profits thatlarge firms were making as a combined result of price increases and tax stability



50

ECUADORCOLOMBIA

N

BRAZIL

LIMA

Cusco

Puno

Arequipa

Trujillo

Piura

Pacific Ocean

SOUTHAMERICA

PeruDepartments

lllegal miningSelva

0 200 km CHILE

Tacna

BOLIVIA

Map 23 Areas with presence of illegal and informal mining as identified by theMinistry of Environment Peru 2015Source Elaborated on the basis of maps produced by the Ministry of Environment (2015)



51

agreements negotiated under the Fujimori administration This resulted first inthe lsquoMining Programme in Solidarity with the Peoplersquo (Programa Minero deSolidaridad con el Pueblo PMSP) established by President Alan Garciacutea whichrequired forty companies to implement direct social investment in their areas ofoperation for the equivalent of a 2 per cent windfall profit tax (MINEM 2011)Five years later amid renewed conflict and public demands on the industry theHumala administration discontinued the PMSP and implemented a mandatorycontribution from mining companies16 A former military officer Humala hadrun as a nationalist and strong admirer of General Velasco placing him to theleft of his closest contender President Fujimorirsquos daughter Keiko According toa former prime minister interviewed for this chapter industry leaders fearfulthat Humala would take more drastic action against private property acceptedthis change after a series of negotiations Although these fears would proveunfounded andhis administration adopted a positionmore favourable towardsthe mining industry distrust between government and business leadersremained mutual during this period

Meanwhile beginning under the Toledo administration (2001ndash06) therewas increased pressure for political and fiscal decentralization Because oflobbying by local government authorities and some industry leaders congressexpanded the total amount of tax revenues from mining to be transferred tosubnational government coffers As in the case of Ghana where 10 per cent17

of mining tax revenue is transferred to subnational authorities (see Chapter 5Section 42 this volume) in Peru the lsquomining canonrsquo was established in 2001to distribute a full 50 per cent of all the income tax revenues captured by thecentral government from mining to subnational governments to be used forpublic investment in the regions and districts where the mining operationstake place18 This has meant that large sums of money have flowed to someregional and municipal governments which were often unprepared to man-age them effectively and transparently while others with high levels of pov-erty and basic needs received very few According tomost analysts in fact thistax distribution scheme created more tension than it resolved (Arellano-Yanguas 2011 Ponce and McClintock 2014)19 and attempts to establish amore equitable formula for distribution of revenues to non-producing districtswere not successful (Arellano-Yanguas 2016) Figure 26 shows the totalamount of transfers distributed to regions from 2006 to 2015 and Figure 27breaks this down by region for the same period

Within Latin America however Peru has been a leader in the adoption ofrevenue transparency measures in the extractive industries Considerableinformation about concessions contracts and EIAs are available on govern-ment websites and a diversity of watchdog NGOs focus on large miningcompanies trying to bridge the communications gap Also beginning underthe Toledo administration Peru signed up to become a member of the



52

Extractive Industries Transparency Initiative (EITI) and in 2011 it became thefirst country in the Americas to be deemed compliant with the standards ofthis voluntary reporting programme Among the four countries in this studyPeru was the third to join EITI (after Zambia and Ghana) Bolivia has not yetjoined (Bebbington et al 2017) Under the EITI a majority of large mining

0

1000

2000

3000

4000

5000

6000

7000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mill

ion

s n

uevo

s so

les

Figure 26 Total transfers to regions Peru 2006ndash15 (mining canon royalties andconcessions payments millions of nuevos soles)Source MINEM (2016)

0100020003000400050006000700080009000

10000

AN

CA

SH A

REQ

UIP

A T

AC

NA

CA

JAM

ARC

A L

A L

IBER

TAD

MO

QU

EGU

A P

UN

O P

ASC

O C

USC

O I

CA

LIM

A J

UN

IN A

YAC

UC

HO

HU

AN

CA

VEL

ICA

APU

RIM

AC

HU

AN

UC

O P

IURA

MA

DRE

DE

DIO

S A

MA

ZO

NA

S L

AM

BAYE

QU

E S

AN

MA

RTIN

LO

RETO

UC

AYA

LI T

UM

BES

CA

LLA

O

Mill

ion

s o

f n

uevo

s so

les

Figure 27 Total transfers to regions by region Peru 2006ndash15 (mining canon royal-ties and concessions payments nuevos soles)Source MINEM (2016)



53

and oil companies in Peru agreed to open their books to an independentevaluation and publish the amounts that they pay in taxes to the state

3322 Environmental regulationAlthough Peru adopted modern environmental legislation for the miningsector in the 1990s grassroots community organizers and pressure frommainstream international actors motivated the government to prioritizethese issues more fully in the twenty-first century The creation of MINAMin 2008 occurred in the context of increased demands from IFIs as a conditionfor approving energy projects and of the negotiation of the FTA between Peruand the United States (Barandiaraacuten Gomez 2008)

Within MINAM an important change for the industry was the establish-ment of the regulatory agencies with authority across all sectors such asthe Organism for Environmental Evaluation and Fiscalization (Organismo deEvaluacioacuten y Fiscalizacioacuten Ambiental OEFA) charged with monitoring environ-mental performance and the National Service of Environmental Certificationof Sustainable Investments (Servicio Nacional de Certificacioacuten Ambiental para lasInversiones Sostenibles SENACE) charged with reviewing and approving EIAsThe latter was established in the wake of violent protests against the Congamining project in Cajamarca in the north of the country in which citizenmobilizations together with national and international NGOs and even otherpublic officials questioned the legitimacy of the EIA which had beenapproved in order for the project to be implemented (Lanegra 2015) Thisled to a proposed transfer in 2015 of all environmental functions from lineministries to the new agency a notable change from the model of sectorialenvironmental authorities settled on during the 1990s

In general the operationalization of these independent agencies of envir-onmental regulation wasmet by resistance from theMinistry of Economy andFinance (Ministerio de Economia y Finanzas MEF) and the industry Their mainconcern has been that environmental regulation will further slow investmentin a period of economic downturn and will create more bureaucratic burdenNear the end of its term in fact the Humala administration passed a series ofdecrees curtailing the ability of environmental authorities to sanction viola-tions while a group of mining companies went to court to resist paying amandatory corporate contribution to the agency20 Hence the enforcement ofrules regarding regulation of the environmental impacts of large-scale miningand hydrocarbon operations have remained a challenge for public authorities(Pulgar Vidal 2008 De Echave and Diez 2013)

3323 Implementing ILO 169 and the right to prior consultationPeru signed ILO 169 in 1994 under the Fujimori administration along withnumerous other international norms considered to be important on the road



54

back to international acceptance However it took more than fifteen yearsand particularly violent protest actions by indigenous peoples of the Amazonand their supporters for congress to approve legislation designed to imple-ment this right which was signed into law by President Humala in 201121

The Ministry of Culture and its Vice Ministry for Intercultural Affairs is taskedwith supervising and guiding consultations under this framework (SanbornRamiacuterez and Hurtado 2017) The first consultation processes began in 2013and by the end of 2016 thirty-three processes had been initiated thirteen ofwhich involved hydrocarbon concessions in the Amazon and ten of whichinvolved permissions formining exploration or exploitation activities To datemore than thirty processes have reached some level of agreement between thestate and the indigenous peoples consulted (Ministry of Culture 2018) As wehave written elsewhere this has represented an important step forward forindigenous rights in Peru as for the first time in history the state has beenrequired to identify who its indigenous peoples are and to communicate withand consult indigenous peoples in transparent and culturally appropriateprocesses At the same time resistance to applying the Law of Prior Consult-ation to decisions related to mining activity on the part of both centralgovernment and private investors contributed to the stalling of implementa-tion of this right in the Andean highlandsmdashwhere most Quechua and Aymarapeoples livemdashuntil late 2015 (Sanborn et al 2016) When the first cases ofconsultation about mining began the staff of the Ministry of Energy andMines lacked the intercultural capabilities to conduct these processes in anappropriate way while the Vice Ministry for Intercultural Affairs lacked theauthority to guarantee compliance with the numerous agreements reachedduring the consultation processes (ibid)

In summary when comparing mining governance in the 1990s and after2000 we see continuity in the promotion of private investment the concen-tration of power and decision making in the executive and the influence oftechnocrats with global ties (Arellano-Yanguas 2016 180) There has beenchange however in the emergence of a wider variety of actors with influenceon policy debates promoting norms and institutions related to decentraliza-tion revenue transparency and redistribution environmental oversight andindigenous and rural community rights In some cases these changes havebeen the result of social mobilization and violent protest while in others theyhave come from engagement with international agencies whose agendascombine an uneasy balance of commitments to growth private investmentand socio-political inclusion including the US government (in the context ofnegotiating the FTA) as well as the World BankInternational Finance Corpor-ation (IFC) However neither pressure from outside nor from within hasproduced a significant shift in the development paradigm towards a moresignificant diversification of production with expansion of opportunities to



55

larger numbers of citizens and amore effective commitment to environmentalsustainability

4 Politics Extractive Governance and Developmentin the Twenty-First Century

Figure 28 tracks social and socio-economic conflict reported by PerursquosOmbudsman from 2005 to 2016 How can we account for the fact that neitherdomestic pressure nor international influence has been sufficient to signifi-cantly reduce such conflict and generate broader social consensus around therole of mining in development in the twenty-first century or to sustain moresignificant mining governance reforms In this section we address this ques-tion by stressing three cross-cutting factors state weakness and fracturedpolitics the power of private capital and transnational forces We then exam-ine the outcomes of these dynamics for inclusive development in Peru

41 State Weakness and Fractured Politics

There are three variables that evidence the weakness of the Peruvian state itslimited territorial reach autonomy from non-state actors and capacity todeliver essential public goods and services and protect fundamental rights

0

10

20

30

40

50

60

70

80

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Socio-environmental conflicts Total Social Conflicts Socio-environmental conflicts

Figure 28 Total social and socio-environmental conflicts reported by the OmbudsmanPeru 2005ndash16Note These numbers show the total conflicts registered by December

Source Defensoriacutea del Pueblo (2017)



56

(Mann 2006 Soifer 2012) Our review of Peruvian history stresses the per-petuation of these long-standing weaknesses as prior settlements as well asexternal constraints affect elite priorities and capacity for broader inclusion

The military regime of 1968ndash80 tried to radically alter state capacity byachieving autonomy from oligarchic landowners and foreign interests includ-ing US corporations However the junta failed to achieve its stated develop-ment goals including building a more dynamic and national mining sector tochannel the rents obtained into an industrialization programme

A context of multiple crises throughout the 1980s created political andideological space for the authoritarian restructuring of the 1990s with supportfrom conservative sectors of the armed forces and private business The liberalreforms of this period reduced the debt burden and increased state capacity inareas fundamental to promoting private investment and market-led growthwithout returning to dependency on any one specific country or narrow set ofcorporations They did not however promote state autonomy from privatecapital per se While they set the basis for institutional modernization ofthose agencies involved with macroeconomic stability they did not do thesame for the improvement of state capacity for longer-term planning andhuman development

Despite the political salience of mining in each electoral process since 2001no political party has constructed and sustained a clear position on the role ofthis sector in the broader economy and society Neither are there any nationalparties with significant power to defend indigenous peoplesrsquo rights to beconsulted about development policies and plans in their territories eventhough most mining and hydrocarbon investments are in the Andes and theAmazon respectively where indigenous communities are concentrated Andwhile some political candidates have toyed with the formalization and inclu-sion of small-scale miners in a national development agenda as of 2016 thishad not become a significant concern of the governing coalition or parties tothe dominant settlement

42 The Power of Private Capital

As we have shown throughout this study the political weight of privatecapital and especially of foreign investors has been significant in governmentdecision making for most of Perursquos post-Independence history The reforms ofthe 1990s undermined the influence of certain private interest groups thatemerged in the 1970s and 1980s particularly industrialists accustomed torent-seeking and unable to withstand international competition Yet thesesame reforms empowered private business as a whole ideologically and eco-nomically and gave renewed priority to large-scale mining interests in par-ticular They also empowered technocrats who moved between the public



57

and private sectors with ease and who continue to favour mining as a driverof growth

In twenty-first-century Peru however it is important to avoid treating thelsquomining sectorrsquo as a unitary actor Most of the leading transnationals in thisindustry are present in the country including at least sixteen of the twenty-three firms participating in the International Council onMining andMinerals(ICMM) an industry association oriented towards improving standards in theindustry and promoting sustainable development22 Most of the home officesof ICMM firms have declared support for transparency and consultationmeasures However other long-standing foreign and domestic mining com-panies operating in Peru have strongly resisted key reforms and their voicestend to prevail within the main industry guild the SNMPE

While the SNMPE may act as one force when negotiating with incominggovernments in recent years the power and effectiveness of this guild hascome under question from its larger international members who criticize thelocal leadership as being overly conservative elitist and clubby and as suchproving largely ineffective in promoting legitimacy and public support forthe mining industry per se2324 While guild leaders may act in the collectiveinterests of members in the pursuit of certain policy goals such as in the initialnegotiation with each new political administration executives of the largestfirms tend to focus more on their specific interests and build direct ties topolicymakers and local authorities rather than invest time and energy in theguild as a whole25

43 Transnational Actors and Forces

Peru has historically experienced high levels of influence by external actors inits internal affairs While powerful US corporations and their political alliessaw their influence reduced in the 1970s they were replaced by the IMF andother creditors In the 1990s the World Bank played an important role indiffusing policy ideas and frameworks promoting trade liberalization overallreduction of the state promotion of large-scale mining and the alignment ofextractive industry governance with broader World Bank and Organizationfor Economic Co-operation and Development (OECD) commitments

The weight of external actors changed in the twenty-first century as thedebt burden was reduced significantly and as China and other non-Westernactors moved into the region Large-scale mining remains largely in the handsof transnational firms and depends on international demand In the last twodecades however transnational social movements and NGOs have alsoplayed a role in promoting institutional changes and challenging the powerof both firms and government in alliance with local actors



58

As we have seen since the early 2000s mining-related mobilization andconflict has been increasingly influential The announcement of a new min-ing project or the construction of a mine can create incentives for local andregional political actors to compete for access to subnational governmentposts and once in office their survival may be associated with the deliveryof public goods and services and distribution of canon revenues At the sametime local protests over environmental concerns and human rights oftenbecome linked with transnational networks of activists and with nationalpolitical debates which has led to the resignation of cabinet ministers andthe destabilization of governments However given the weaknesses of thepolitical system they have not had the kind of holding power necessary tosignificantly improve the capacity of the state to implement these reformsnor to alter the overall focus on large-scale mining as an engine of growth andthe lack of definition of the place of artisanal and small-scale miners

44 Outcomes for Inclusive Development

The unofficial alliance between business and government in favour of export-led growth has been stable for most of this period and in particular in acontext in which the national economy grew fairly steadily from 2000onwards reaching annual rates of around 6 per cent from 2005 to 2013Indeed Perursquos GDP growth rate remained among the highest in the regionwhile levels of public debt and inflation have remained low (World Bank2016b) As one of the fastest growing sectors of the economy in the 2000slarge-scale mining has been a large part of this story contributing arounda quarter of total foreign direct investment (FDI) and between 11 and 17per cent of GDP (World Bank 2016b EY 2017) It is not the whole story asthe value of Perursquos non-traditional exports grew fivefold between 2002 and2014 led primarily by the expansion of commercial agriculture Yet trad-itional mineral commodities continue to constitute around 60 per cent oftotal exports (BCRP 2016 EY 2017)

Although exports are vital to Perursquos small open economy continued reli-ance on non-renewable natural resource exports makes it vulnerable to inter-national price changes which affect the economy as a whole This becamemore apparent after 2013 when declining export income translated intoreduced transfer of canon revenues and an overall slowing of growth to24 per cent in 2014 While increased mineral production and export volumehelped to drive Perursquos growth rates back up to 33 per cent in 2015 and nearly4 per cent in 2016 the economy remains highly sensitive to fluctuationsin external commodity prices (BCRP 2016 World Bank 2017a)26

Along with the risks of increased dependency on global demand for min-erals analysts critical of the weight of mining in Perursquos economy tend to stress



59

its weak links to growth in other sectors and the low levels of direct employ-ment it generates (Schuldt 2013 Seminario 2014 Ghezzi 2015) This argu-ment has been disputed by government technocrats and private industryleaders who argue that mining has a stronger ripple effect and creates moreindirect jobs than critics recognize (SNMPE 2012 IPE 2013)

In regard to taxation total tax revenues quadrupled from 2001 to 2015largely as a result of export-led growth However policymakers have had littleability or incentive to expand the countryrsquos overall tax base relying instead onthe revenues generated from a relatively small number of large firms withmining contributing up to 25 per cent and from a general consumption tax(Impuesto General a las Ventas IGV) which represents around 26 per cent(SUNAT 2017) Tax revenue as a percentage of GDP has remained around16 per cent since 2006 below the average rate of 21 per cent for Latin Americaas a whole (World Bank 2016b)27

As for the use of these revenues public investment as a percentage of GDPincreased from 28 per cent in 2002 to 58 per cent in 2015 (MEF 2016b) andsuccessive elected governments have invested in expanding access to educa-tion and health care electricity running water and sewage28 Social pro-grammes targeted specifically at the poor including income transfers werealso expanded Progress has been slower in improving the quality of theseservices and their equitable distribution while social spending has remainedlow as a share of GDP in Peru when compared with similar economies (WorldBank 2016a)29 Peruvian levels of spending on science and technology crit-ical to economic diversification are also among the lowest in the regionreinforcing the priority on primary sector development (PRODUCE 2014Concytec 2017)

One of the most important successes of the post-2000 focus on growth wasa dramatic reduction in poverty While 556 per cent of the populationwas officially poor in 2005 based on income measures this dropped to 218per cent by 2015 while the share of people living in extreme poverty declinedfrom 158 per cent to 41 per cent in the same period (INEI 2016 Work Bank2016b) Furthermore in the last decade Peru has seen a modest decline inoverall income inequality as the Gini index declined from 049 in 2004 to 044in 2014 (Castro et al 2016 World Bank 2016b)

For the most part these important reductions in both poverty and inequal-ity can be attributed to the lsquorising tidersquo of overall economic growth associatedwith expanding labour markets and shifts from unpaid family workers intowage employment (Inchauste et al 2012 Cord et al 2015 Castro et al2016) However some evidence suggests that since 2011 government socialpolicies may have contributed more significantly to reducing inequality(Castro et al 2016)mdashpolicies that also rely heavily on a still narrow tax baseIt should be stressed however that Peru remains a very unequal society with



60

Gini levels twice those of more developed countries and higher than Chilersquosthemost unequal country in the OECD This is seen not only in income levelsbut also in the persistent gaps between urban and rural areas and betweendiverse regions and the vulnerability of millions of Peruvians who haveclimbed into the middle class but precariously so Although one in threePeruvians had joined the middle class by 2012 according to the WorldBank an estimated 40 per cent are considered to be vulnerable to fallingback into poverty as overall growth levels subsidemdashslightly above the averageof 378 per cent for the region as a whole (Cord et al 2015)

Neither have the benefits from growth to date overcome the countryrsquos long-standing geographical disparities In 2015 45 per cent of rural residentsremained poor and nearly 14 per cent still lived in extreme poverty comparedto 145 per cent and just 1 per cent in urban areas respectively (INEI 2016)Furthermore if we use a measure of multidimensional poverty involvingdiverse indicators related to education health housing and access to vitalsocial services some 60 per cent of the rural population in the Andeanhighlands remained poor in 2014 (Vasquez 2016) This includes areas ofintensive large-scale mining activity30

It is hard to assess the actual results of the huge revenue flows from themining tax canon in producer districts and regions Several studies conductedin producer areas argue that there has been limited positive impact on localwelfare especially among rural communities (see for example Arellano-Yanguas 2011 Paredes et al 2013) Others stress that canon resources haveincreased the relative importance of public investment but also note devel-opment gaps between regions (Fort and Paredes 2015)

Peru also continues to stand out for having some of the highest levels ofinformality in the developing world comprising 709 per cent of the totallabour force and 61 per cent of the non-agricultural labour force according toofficial government data (INEI 2016) This is partly the historical result of apredominantly primary economy a weak state and a lack of elite commit-ment to investment in human capital translating into low levels of educa-tional achievement and hence labour productivity (Loayza 2007)

As mentioned in Section 3 informality was also exacerbated as a result of therollback of labour rights and deregulation in the 1990s (Chong et al 2007)While informality appears to have declined modestlymdasharound 5 per centmdashsince the early 2000s and especially since 2005 it remains very high forwhat is now a middle-income country The National Institute of Statisticsand Informatics (Instituto Nacional de Estadiacutestica e Informaacutetica INEI) concludedthat the informal sector generated 61 per cent of total employment but just19 per cent of GDP in 2015 (INEI 2016) This situation reinforces the relativenarrowness of the countryrsquos tax base as well as the weakness of its organizedlabour movement While up to 40 per cent of the economically active



61

population belonged to a trades union in the 1980s this declined to 2 per centin the late 1990s and has remained between 4 and 6 per cent since 2012(Villavicencio 2015 344 ILO 2017)

The persistence of this situation well into the twenty-first century alsoreflects the continuity of neoliberal ideas among the technocrats in the centralgovernment and their strong identification with private sector elitesAlthough candidates may appeal to workers during electoral periods promis-ing increases in the legal minimumwage or improved public sector salaries nogovernment since 2001 has focused on labour rights once in power Successiveministers of economy and finance have been more sympathetic to thedemands of employersrsquo associations which regularly call for a further rollbackof labour rights and wage guidelines claiming that the costs of formalizationare too high especially for small businesses31 The Ministry of Labour remainsone of the least modernized public institutions and authorities have limitedcapacity or incentive for supervising Perursquos diverse labour markets and enfor-cing the rules on the books In addition no political parties with presence incongress have an explicit working-class identity or agenda

Since 2001 Peruvian democracy has had a weak capacity for interest repre-sentation overall On one hand it is positive that elected governments haveremained in place since 2001 the military have largely remained out ofpolitics and dominant elite agreements must be legitimated at least in partthrough the democratic process Furthermore the electorate is now very broadbasedmdashnearly 70 per cent of the total population is of voting agemdashand therehave been advances in political and fiscal decentralization especially underthe Toledo administration On the other hand the rule changes and lsquoanti-partyrsquo rhetoric of the 1990s left a party system that is weak fragmented andvolatile Fewer than 5 per cent of Peruvians belong to any party and short-lived electoral lsquomovementsrsquo tend to win subnational elections Themajority ofmembers elected to Perursquos small congress are newcomers and are notre-elected to a second term While some analysts argue that the decline ofparties and traditional interest organizations is a global phenomenon othersclaim that in the Peruvian case economic informality also feeds politicalinformality (Cameron 1997) The weakness of mass-based representativeinstitutions makes it harder for voters to hold politicians accountable afterelections and facilitates the persistent influence of wealthy and powerfulelites and high levels of political corruption

In addition the participation of indigenous peoples and organizations inthe democratic process remains weak in twenty-first-century Peru Althoughthere are now laws establishing quotas for indigenous candidates on regionaland municipal party lists in areas with high shares of indigenous voters todate the indigenous presence in elected offices remains limited and indigen-ous voices are rarely present in national political arenas where the quotas do



62

not apply32 Leaders of some national indigenous organizations charge that inpractice few parties have indigenous members with decision-making powerand they have few incentives to recruit and train indigenous members(ONAMIAP 2014 Sanborn et al 2016) Efforts by indigenous firms to organ-ize their own parties and field candidates have also failed to gain much votersupport Instead protests often remain the main mechanism through whichindigenous demands have been heard by and had impact on national publicopinion and dominant elites

A major advance in recent years has been the national Law of Prior Consult-ation which despite the problems involved in its implementation has obligedthe state to embark on an unprecedented effort to identify and communicatewith its indigenous citizensMining investors today also need to obtain explicitpermission from indigenous and peasant communities formining activities ontheir lands and a qualified majority of communal assembly members if theirland is to be used or sold (Ley Nordm 26505) These policies represent a languageand practice of inclusion that is relatively new in Peru (De Echave and Diez2013) Yet they have not changed the main legal and property regime that hasgovernedmining activity since the 1990s Decisions concerning the granting ofconcessions remain a Lima-based central government attribute and legalframeworks for the protection of peasant communitiesrsquo lands have been fre-quently threatened by efforts to encourage more investment

As for the environmental dimension as mentioned above there have beenseveral advances in the promotion of environmental regulation during thelast five years These include the creation of institutions aimed at evaluatingthe EIAs presented by investors monitoring compliance with existing normssanctioning violators and simplifying administrative oversight Howevermaintaining the authority and autonomy of environmental regulators is anongoing political struggle that requires the support of other cabinet membersthe media and civil society organizations in the face of pressures by the morepowerful members of the executive branchmdashaligned with private interestsmdashto reduce the social and environmental protections demanded of investors

In summary these various dimensions of inclusive development in Peru inthe twenty-first century should be understood in relation to the weight of pastpolitical settlements and the potential unravelling or modification of themost recent neoliberal one In a context of rising global prices policymakersin the post-Fujimori era did not have incentives to significantly alter a primaryexport-oriented economy promote greater diversification reform labour mar-kets or improve the underlying social conditions that distort them Invest-ment in social programmes for the poor has been substantial but insufficientto compensate for more structural challenges and as a result a significantsection of the Peruvian population remains vulnerable to the impact of exter-nal shocks and at risk of falling back into poverty



63

5 Conclusions and Final Reflections

This chapter began with three general questions about the Peruvian caseWhen have there been periods of political realignment and settlement asreflected in the institutions and policies of the state How have such settle-ments shaped the governance and exploitation of Perursquos mineral resourcesAnd how have the relationships between dominant elites mineral extractionand the state affected patterns of inclusive development over time

The first question is addressed primarily in Section 2 wherewe identify threebroad periods as having relatively stable institutional arrangements that havebeen crucial for the development of economic models and the distribution ofholding power among key actors These are the very long period of oligarchicpredominance (1895ndash1968) a second period we call statist (1968ndash90) and theneoliberal period which dates from the early 1990s to the present Althoughmarked by diverse social and economic pressures we argue that each period isreflected in particular patterns of state building and dominant economicmodels However in the face of global market forces and with pressure fromnew ideological trends andmobilization from excluded actors the chapter hasdiscussed how each settlement lost strength and eventually became radicallyaltered and which groups benefited and lost out in the process

How did these arrangements shape patterns of governance and exploitationof Perursquos mineral resources As discussed in Section 3 the oligarchical periodwas most strongly associated with the exploitation of land and labour foragriculture while Peruvian elites ceded power over mineral resources toforeign (largely US-based) corporations with the necessary capital to exploitlarge deposits and eventually to build and manage large open-pit operationsFor decades the large landed estate or hacienda and the mining enclavecoexisted and the state benefited from tax collection while labour rightswere only gradually introduced Over time however the demands of urbanand rural workers peasant communities and emerging middle classes grewenough to challenge this dominant model

Mining governance during the second settlement period (1968ndash90) cannotbe understood without looking at this precedent One of the main features ofthe Revolutionary Government of the Armed Forces was its stated commit-ment to reducing dependency on foreign capital empowering a nationalbourgeoisie and expanding the domestic market goals shared simultaneouslyby broad sectors of the Peruvian population as inmuch of Latin America at thetime This meant a radical transformation of the ownership and managementof the mining sector as well as broad land and labour reforms However thegoal of an alliance between themilitary and private Peruvian investors was notachieved and instead most large-scale mining operations were concentratedin state-run enterprises This radically altered the composition of ownership in



64

the sector for two decades but proved unsustainable for reasons of profoundeconomic and political crisis in the 1980s This ownership model was disman-tled in an equally radical neoliberal shift starting in the early 1990s

In the third period (1990 onwards) large-scale mining shifted back intoprivate and primarily transnational hands and became a major driver ofeconomic growth A new alliance of military and civilian elites set Peru on aradically liberalizing pattern of state reforms and the resulting empowermentof the liberal technocracy maintained continuity after the return to democ-racy (2000 onwards) However the balance of power remained less stablebecause of the growing conflicts around expanding mining operations andbecause of some of the very reforms introduced to stem such conflict such asthe mining canon In recent years there have also been institutional innov-ations within the state associated with environmental regulation and politicsof recognition of indigenous rights which introduce counterweights withoutsignificantly altering the pattern of mining ownership and governance

Section 4 addressed our third question about the relationships betweendominant elites mining and inclusive development Here we argue thatthree cross-cutting factorsmdashstate weakness and fractured politics the powerof private capital and transnational forcesmdashhelp account for the difficulties inovercoming social conflict around the role of mining in development and insustaining more significant mining governance reforms The section endswith a discussion of how these dynamics ultimately restrict the prospects forinclusive development in contemporary Peru

51 Final Reflections

Although the fate of mining-dependent countries such as Peru is often con-sidered to be largely determined by international markets and capital flowsthis project has focused on issues of political relationships and the interactionof domestic and transnational actors The results of these interactions haveimportant consequences for the governance of the extractive industries andfor the capacity of the state to achieve more inclusive and sustainabledevelopment

In the Peruvian case at the helm of the state we have seen both economic-ally liberalizing coalitions which give priority to primary exports and morestatist coalitions which tried (and failed) to promote greater industrializationThese different coalitions have significantly altered the patterns of mineralproduction and regulation as part of broader agendas We have also seenprivate actors resist the political directives of the state halting investmentsor waiting for changing political tides when policies were not in their favourThe balance of power around mining governance in Peru has been asymmet-rical but also unstable



65

Through the twentieth century the most radical changes in mineral gov-ernance were undertaken under authoritarian rule in which the dominantelites had little incentive or commitment to negotiate with other groups insociety especially if they were weak and dispersed The democratic opening in2001 appeared as a favourable scenario to change this pattern and to modifythe ways in which mining itself is governed As we have seen on variouslevels Peru has made strides in this century towards overcoming its historicallsquoresource cursersquo taking advantage of the rising global demand forminerals andother commodities achieving sustained economic growth for nearly twodecades and implementing an unprecedented degree of decentralization ofthe revenues generated

Yet as we have also discussed the implementation of extractive governancereforms has been largely in response to conflict and difficult to sustain inpractice Some of these reforms created or empowered local interests prone tocorrupt or authoritarian forms of behaviour and some have generated newconflicts The mining canon for example has become not only a source ofrevenue for local governments but also something that is considered anacquired right by local and regional actors Yet the weakness of subnationalgovernments and local political organizations inhibits their ability to investthese resources effectively build alliances and serve as a counterweight tocentral executive power This is also reflected in the fact that policymakingtowards large- and medium-scale mining is concentrated in the nationalgovernment while the only mining governance functions transferred to sub-national government involve regulating artisanal mining In recent yearsdecentralization has also coexisted with diverse schemes of publicndashprivatepartnership which aim to reduce the infrastructure gap in Peru but havebeen criticized for potentially undermining efforts to strengthen subnationalgovernment institutions curb corruption and reinforce still incipient effortsat citizen deliberation over public spending

In this context of lsquofractured politicsrsquo (Crabtree 2011) technocrats haveremained fundamental to operating the central state in Peru and this hascontributed to a higher degree of stability and responsibility in macroeco-nomic policymaking than in past eras (Dargent 2015) However they do nothave the kind of party affiliations and holding power that their counterpartsin Chile and elsewhere have Furthermore the power of technocrats has notbeen consistent across the state and their lack of political experience and skillsleaves them ill-equipped to prevent or manage social conflict especiallyaround mining Yet it is often the frustration on the part of those who liveoutside of Lima and feel left out of this most recent lsquoPeruvian miraclersquo thatfuels such conflict which tends to be channelled through more violentmeans and to be met with considerable violence from the state as well



66

The lack of stronger and more representative parties and civil society organ-izations in Peru exacerbated by the political violence of the 1980s and theattack on representative institutions in the 1990s has limited the quality ofdemocracy as well as the ability of elites to agree on models of longer-terminclusive development The economy remains unable to create more effectivecounter-cyclical policies promote greater productive diversity and buildmoredecent employment As a result it remains highly vulnerable to externalmarkets and the newly emergent and in large part informal middle classesremain vulnerable to falling back into poverty The need to promote newmineral production to sustain these revenuesmdashto offset the effect of decliningworld pricesmdashhas also led policymakers to backslide on environmental andsocial safeguards and to resist implementing new rights especially those ofindigenous peoples

The fact that the general liberal economic direction of the 1990s has con-tinued through this century does not mean there is broad social consensusaround it nor the drive by ruling elites to expand extractive activity nation-wide The combination of sustained growth and targeted social policy partiallycontributed to the important reduction in poverty levels However this didnot serve to effectively lsquoincludersquomore citizens in alliances pacts or coalitionsable to overcome the countryrsquos historical political instability and fragmenta-tion In class ethnic and regional terms there has been limited change in themain parties to Perursquos dominant political settlements

In current Peruvian academic and policymaking circles there is growingrecognition of the limits of development centred on macroeconomic growthalone and of the need to focus more on the development and quality ofinstitutions (Ghezzi and Gallardo 2013) There is less awareness howeverof the power dynamics that lie behind institutions or the challenges to build-ing political alliances and coalitions to change them The challenges faced byPeru like many other mineral exporters include the diversification of theeconomy and the reduction of informality as well as more equitable distribu-tion of public investment and services This demands not only technocraticpolicy decisions but also broader state reform that can be promoted andsustained by political and economic elites In this chapter we have identifiedthe origins of what Arellano-Yanguas (2008) calls a lsquodual bureaucracyrsquo withinthe Peruvian state in which certain sectors and agencies linked to marketopening and macroeconomic stability have benefited from reforms orientedtowards professionalization and modernization while other long-standingsocial ministries (labour health education) and new ones created becauseof international pressure or social conflict such as the ministries of theenvironment and of culture still lack the power to defend policies not popularwith primary export interests



67

In this sense we find that even after nearly two decades of uninterrupteddemocracy high levels of political instability and fragmentation haveinhibited the development of effective institutions and longer-term policiesin Peru To date there are still few powers within the state that can serve aschecks and balances on the executive and particularly the ministries thatpromote mining-led growth The absence of organizations that representinterests beyond the local sphere limits the effectiveness and legitimacy ofinstitutions created to improve mineral governance regulate environmentalimpacts and protect human rights Instead the response of recent govern-ments to increased social conflict around mining has been characterized byshort-term measures and the arbitrary use of force

The persistent legacies of the 1970srsquo military regime and of the neoliberalreforms of the 1990s have also left an important sector of Peruvian elitesaverse to any serious effort at longer-term national planning on the part of thestate This ideological inheritance combined with political instability alsohelps to explain the lack of elite commitment that underlies limited capacityto promote a professional civil service or implement more ambitious strat-egies for promoting economic diversification To enact measures that morebroadly modernize the state and put it more at the service of inclusive devel-opment requires politicians and technocrats who are committed to this goalover the long term and are able to resist the short-term interests of those whobenefit from the model at hand

Acknowledgements

Tania Ramiacuterez and Veroacutenica Hurtado made considerable and important contributionsto the development of the Peruvian case study This chapter is based largely on anearlier and more extensive document published as Sanborn et al (2017) lsquoMiningpolitical settlements and inclusive development in Perursquo ESID Working PaperNumber 79

Endnotes

1 See for example Gonzaacuteles de Olarte and Samameacute (1991) Tuesta (1996) Cameron(1997) Tanaka (1998) Parodi (2002) and Schmidt (2008) cited in Moron andSanborn (2007)

2 This includes specialized survey data produced by the National Institute forStatistics and Informatics (Instituto Nacional de Estadiacutestica e Informaacutetica INEI) theCentral Reserve Bank (Banco Central de Reserva) National Superintendency of TaxAdministration (Superintendencia Nacional de Administracioacuten Tributaria SUNAT) the



68

Geological Mining and Metallurgical Institute (Instituto Geoloacutegico Minero yMetaluacutergico INGEMMET) the ministries of Energy and Mines (Ministerio de Ener-giacutea y Minas MINEM) Production (Ministerio de Produccioacuten PRODUCE) and Cul-ture (Ministerio de Cultura MC) and the National Society of Mining Oil andEnergy (Sociedad Nacional de Mineriacutea Petroacuteleo y Energiacutea SNMPE)

3 Peru has one of the largest indigenous populations in South America yet their totalnumbers are difficult to measure As of 2016 national census data did not includequestions of racial or ethnic identity only the maternal language of heads ofhousehold Using this indicator the most recent census of 2007 estimated thetotal number of indigenous people at four million or roughly 157 per cent ofthe population (INEI 2007) Alternative measures range from as low as 5 per centwhen only self-identification is used to as high as 75 per cent when taking intoaccount ancestors traditions and customs (Sulmont 2012) The Ministry of Cul-ture has identified fifty-five main indigenous peoples the largest being Quechuaand Aymara and over fifty-one smaller groups of Amazonian peoples (INEI 2007Ministry of Culture 2017b)

4 The Law of Highway Conscription in 1920 mandated that all men aged eighteento sixty do unpaid roadwork for a certain number of days per year Only a few couldbuy their way out of this obligation (Contreras and Cueto 2009)

5 The UNO was a party created by former dictator Manuel Odriacutea (President 1948ndash56)and linked to sugar and cotton barons Its alliance with APRA allowed for anopposition majority against Belaunde from 1963 to 1968 (Manrique 2009)

6 The Fujimori regime after 1992 has been called lsquocompetitive authoritarianismrsquobecause elections were held without major fraud and there were spaces for politicalopposition in the new congress local governments and a sector of the media(Levitsky and Way 2010) The 1993 constitution remained in place by democrat-ically elected governments after 2000

7 According to an interview with a former executive of a leading foreign miningcompany in Peru See also Becker (1983)

8 Apparently the military leaders initially wanted a joint venture with CPMC and apart of the stock that company held in SPCC which was refused The nationaliza-tion was then presented as a political victory in a famous speech by General JorgeFernaacutendez Maldonado (Saacutenchez Albavera 1981 Becker 1983)

9 According to an interview with a former general director of mining of the Ministryof Energy and Mines and board member of Hierro Peru and Centromin See alsoPasco-Font (2000)

10 A former minister of energy and mines a former minister of transport and com-munications minister of energy and mines and minister of the presidency and aformer executive of a leading foreign mining company in Peru

11 According to interviews with a former general director of mining in the Ministry ofEnergy and Mines and board member of Hierro Peru and Centromin and a formerminister of energy and mines

12 According to interviews with a former minister of transport and communicationsminister of energy and mines and minister of the presidency and a formerexecutive of a leading foreign mining company in Peru



69

13 According to interviews with a former general director of mining of the Ministry ofEnergy and Mines and board member of Hierro Peru and Centromin the regionalcoordinator of an international NGO and a former minister of transport andcommunications minister of energy and mines and minister of the presidency

14 The share of national territory that remained off-limits for mining activity in 2015because of various factors including creation of national parks and protectednature areas as well as urban zoning was estimated at 65 per cent The grantingof mining rights alone does not authorize holders to engage in active mineralexploration mine construction or extraction all of which require numeroussteps from negotiating purchase or lease of surface lands to obtaining approvalof EIAsmdashprocedures that can take years to complete (MINEM 2016)

15 For more details on these measures see Sanborn and Chonn (2015) Sanborn andParedes (2015)

16 According to an interview with a former prime minister See also EY (2014)17 Note that the Office of Administration of Stool Lands (OASL) which oversees this

distribution is allowed to retain 10 per cent of it for its own costs so 9 per cent isactually transferred to subnational authorities

18 Since 2003 the formula for canon distribution provides 25 per cent to the regionalgovernment where the operation is based 25 per cent to the provincial municipal-ity and related districts 20 per cent to the producer district and 40 per cent to allother municipalities in the region (Sanborn and Dammert 2013)

19 The main regions dependent on mining are Moquegua (40 per cent of regionalGDP) Tacna (34 per cent) Pasco (27 per cent) Ancash (26 per cent) and Arequipa(24 per cent) (McKinsey 2013)

20 See for example lsquoExigen a Tribunal Constitucional responder demanda contra Ley30230rsquo (22 July 2015) SERVINDI httpwwwservindiorgactualidad135812lsquoAporte por regulacioacuten OEFA gana nuevo proceso a minerarsquo (21 July 2015) LaRepuacuteblica httplarepublicapeimpresaeconomia16893-aporte-por-regulacion-oefa-gana-nuevo-proceso-minera and lsquoMedida judicial no permite que OEFAcobre 56 multas ambientales a minerasrsquo (10 July 2015) SPDA Actualidad Ambientalhttpwwwactualidadambientalpep=31113

21 In 2009 after months of strikes and protests by native Amazonian peoples over notbeing consulted on new legislation related to forestry and extractive investments aconfrontation broke out in the city of Bagua in the Amazonas region when policetried to forcibly disperse a fifty-nine-day roadblock In what is known as thelsquoBaguazorsquo twenty-three police officers and ten civilians were killed and hundredswounded (Barrera-Hernaacutendez 2009 Amnesty International 2014) This violencespurred Humala to approve the implementation of ILO 169 as one of his firstactions in office

22 See httpwwwicmmcomen-gbmembersmember-companies23 According to interviews with a former general director of mining of the Ministry of

Energy and Mines and a board member of Hierro Peru and Centromin a formerminister of energy and mines and a former executive of a leading foreign miningcompany in Peru



70

24 lsquoThe NationalMining Society is one of themost ineffective inefficient and unequalorganizational messes in the hemispherersquo said one foreign mining executive basedin Peru lsquoIf a mining company really wants to get something done they sit downwith the corresponding authority directly If it is a company with more than abillion dollarsrsquo worth of investment they can have a direct talk with the ministerrsquoFurthermore lsquothere is no clear strategy in their actions and the studies they oncepromoted for the sector have been left behindrsquo

25 According to interviews with a former general director of mining of the Ministry ofEnergy and Mines and a board member of Hierro Peru and Centromin and aformer executive of a leading foreign mining company in Peru

26 Copper production in particular jumped from 16 million tonnes in 2015 to 23million tonnes in 2016 thanks largely to two mega-projects coming on line theCerro Verde mine in Arequipa and Las Bambas in Apurimac (EY 2017 37)

27 See also lsquoLatin America and the Caribbean Tax Revenues remain stablersquo (10 March2015) Inter-American Development Bank Retrieved from httpwwwiadborgennewsnews-releases2015-03-10revenue-statistics-in-latin-america-and-the-caribbean11082html

28 To review the historical evolution of public spending in these services see MEF(Ministry of Economy and Finance) (2016a)

29 For example investment in education in 2012 represented 29 per cent of GDPmdashwell below levels of neighbouring countries with similar dependence on naturalresource exports such as Chile (46 per cent of GDP) Argentina (51 per cent) andBolivia (64 per cent) (World Bank 2016a)

30 According to Vasquez (2016) using a measure of multidimensional poverty thefive poorest regions of Peru in 2014 were Huancavelica (5263 per cent) Cajamarca(4989 per cent) Amazonas (4679 per cent) Puno (4527 per cent) and Huaacutenuco(4399 per cent) These regions include areas of intensive mining activity

31 See lsquoExcesiva regulacioacuten y altos impuestos gravan ingreso al sector formal en Peruacutersquo(19 October 2014) Gestioacuten httpgestionpeeconomiaexcesiva-regulacion-y-altos-impuestos-gravan-ingreso-al-sector-formal-peru-2111487

32 Various electoral laws in Peru promote participation of historically excluded indi-genous peoples as well as women and youth Law 26859 for example states that atleast 30 per cent of candidates on the parliamentary lists of all parties must bewomen while Law 27734 passed in 2002 states that a minimum of 15 per cent ofcandidates for regional and municipal councillors should be of indigenous ornative origins in those regions and provinces determined by authorities to have ahigh percentage of indigenous residents As mentioned at the outset while thenational census does not measure ethnic or racial identities some 156 per centclaim an indigenous mother tongue and an estimated 40 per cent of the popula-tion claims to descend fromnative Andean or Amazonian peoples (Sulmont 2012)



71

3

Political Settlements Natural ResourceExtraction and Inclusion in Bolivia

The concept of lsquopolitical settlementrsquo draws attention to the need to under-stand institutional arrangements as the products of bargains among elites(Di John and Putzel 2009) That is contention and relationships of poweramong elites produce institutions that will tend to distribute benefits more orless in line with differences in power (Khan 2010 see also Acemoglu andRobinson 2012) The nature of the state will reflect this distribution ofpower and these bargains as well as institutions inherited from historicaldistributions of power

As noted in Chapter 1 Khan (2010) suggests that the overall mode in whichstate authority is exercised depends on what he refers to as lsquohorizontalrsquo andlsquoverticalrsquo distributions of power The vertical distribution refers to the way inwhich power is distributed within the coalition of ruling elites (the parties tothe lsquobargainrsquo) while the horizontal distribution refers to the relationships ofpower between the ruling coalition and so-called lsquoexcluded factionsrsquo whowere not party to the bargain and are not therefore directly involved in ruleand benefit capture These two distributions of power draw attention to theever-present possibility of instability in the settlement The greater the relativepower of excluded factions as well as of weaker (lsquolower-levelrsquo) groups withinthe ruling coalition the greater the likelihood of instability Another factor indetermining relative instability is the extent to which the form of develop-ment delivered by the ruling coalition produces benefits for factions that areexcluded from or are little more than sleeper members of the ruling coalitionFor Khan the nature of this development depends on the extent to whichruling elite interests are aligned with economic growth Booth (2015) addsthat the quality of this development will also depend on the capacity of eliteparties to the bargain to act collectively around a shared vision of society andeconomy In some sense the issue here is whether the bargain arrived at


hinges around a shared vision of change or a simple divvying up of the spoilsof government1

These different observations are important because although the termlsquosettlementrsquo implies some type of equilibrium the pacts underlying the settle-ment can be unstable and even ephemeral This has been the norm for BoliviaUnderstanding the sources of such instability and also the conditions inwhich settlements becomemore stable is therefore important for understand-ing how development processes are governed In a case such as Bolivia wheregovernance and development were traditionally characterized by chronicinstability only to enter a period of remarkable stability since 2005 itbecomes particularly important to find a framework whose concepts helpexplain both the drivers of instability and the conditions that have nowhelped favour stability

The Bolivian case also suggests the value of making natural resources centralto political settlement thinking This is for several reasons access to andcontrol over resources and resource rents are central to elite bargains thetransnational valorization of resources serves to bring political actors intobeing and into demise and the economic and cultural values apportioned tonatural resources become critical elements of both state- and nation-building(Bebbington 2013b) The lsquolongue dureacuteersquo perspective of political settlementstaken in this book reveals lsquounresolved tensionsrsquo (Crabtree and Whitehead2008) in Bolivia over who should control natural resources how thoseresources should be used and by whom how their benefits should be distrib-uted socially and spatially and the type of state that should be built for aparticular mode of natural resource governance (state-led vs market-led cen-tralized vs decentralized linked to indigenous governance vs Weberian stateforms etc)

In this context this chapter considers the following

How far have prior political settlements and coalitions in Bolivia struc-tured the forms taken by an expanding extractive economy and how farhave these settlements subsequently been shaped by this expansion

To what extent have conflict coalitional change and learning processesdriven institutional innovation in the governance of extractive industriesin Bolivia

How have interactions among actors operating at different scales affectedthese processes of institutional change and the overall governance ofmining and hydrocarbons in Bolivia

We address these themes by first offering a short introduction to mineralsand hydrocarbons in Bolivia followed by a brief periodization of Bolivianpolitical dynamics and settlements from 1899 through to the present This


Resource Extraction and Inclusion in Bolivia

73

serves to introduce a more detailed discussion of the interactions betweenmining hydrocarbons and political settlements over timemdashthe theme ofSection 3 (mining) and Section 4 (hydrocarbons) The final section Section 5concludes with a discussion of the relationships between resource extractionand political settlements over the long term emphasizing the recurringimportance of subnational politics and ideas of resource nationalism inthese settlements

The argument draws on historical analysis from secondary sources comple-mented by a series of key informant interviews Specifically field research andinterviews were conducted in the departments of Tarija the primary centreof natural gas production in Bolivia and Potosiacute the historical centre of thehard-rock mining economy since pre-Hispanic times Both structured andinformal interviews were conducted with a range of actors representing busi-nesses popular organizations elected representatives and local authoritiesin Potosiacute Tarija and the capital city of La Paz The analysis is further informedand complemented by documentary analysis drawn from newspaperarticles government publications and presentations and published andunpublished reports from Bolivian research centres and non-governmentalorganizations (NGOs)

1 Resource Extraction and Political Settlements in Boliviaan Overview

11 The Simple Geographies of Mining and Hydrocarbons in Bolivia

Mining has been part of Boliviarsquos identity and economy since well before itexisted as a modern nation and even before Spanish colonization of thecentral Andes Until recently this mining has been concentrated in the west-ern highlands of the country This region is one of high altitude plains (thealtiplano) mountain peaks and valleys and historically was the home toadvanced pre-Incaic forms of government and rule These highlands continueto be populated primarily by indigenous Aymara and Quechua groups Min-ing labour has been almost entirely indigenous throughout the history of thesector (Nash 1993 Oporto 2012)

The highland concentration of mining is largely an artefact of geologywith Andean mineralizations yielding deposits of silver tin zinc nickelgold copper and wolfram among others (see Map 31) These resourceshave traditionally been extracted through underground operations butthese began to give way to open-cast operations headed by transnationalcompanies during the 1990s In terms of size mining in Bolivia has longconsisted of a mix of large-scale and small-scale operations Beginning withthe period following structural adjustment in 1985 however substantial



74

growth emerged in small- and medium-scale production This is characterizedby cooperative mining in which groups of miners organized through hier-archically structured networks of control and informal labour gain preferentialaccess to mine sites provided by the state mining company the BolivianMining Corporation (Corporacioacuten Minera de Bolivia COMIBOL) These net-works have come to dominate the mining sector and have been politicallyimportant actors since 2000

SOUTHAMERICA

Bolivia

Mining licensesBRAZIL

Cobija

PERU

LA PAZ

CHILE

ARGENTINA

PARAGUAYTarija

Oruro

Cochabamba

0 250 km

Trinidad

Santa CruzDe La Sierra

Sucre

Potosiacute

N

Departments

Map 31 Mining areas BoliviaSource Map prepared by Chandra Jayasuriya on the basis of maps made available by CEDIBCochabamba Bolivia 2017



75

Mineral extraction in the humid tropical lowlands to the north and eastof Bolivia is a far more recent phenomenon taking two forms (see Map 31)To the north informal gold mining has become increasingly important inalluvial areas where gold has been carried downstream from the Andes overgeological time and deposited in areas bordering what are now Peru and BrazilThis alluvial gold extraction should be viewed as part of a larger complex ofwhich the socio-politically and economically significant alluvial mining inMadre de Dios Peru is a prominent manifestation (see Cano 2015b andChapter 2 this volume) In Bolivia this alluvial gold mining has producedmurderous violence as in Peru but is yet to generate socio-politically strongactors in the way that has occurred in the Peruvian lowlands or Boliviarsquoshighlands The second form taken by lowland mining involves actual andplanned large-scale operations in the eastern parts of the Santa Cruz depart-ment Most significant among these are the Don Mario gold mine (Hindery2013 2013b) and the very large iron ore deposits of Mutuacuten that are currentlyheld by the Bolivian state following the withdrawal in 2012 of the Indiancompany Jindal2

The geography of hydrocarbons is the obverse of that of minerals withprimary reserves being concentrated in the Chaco a narrow band of lowlandsof the easternsoutheastern departments of Santa Cruz Tarija and Chuquisaca(see Map 32) These deposits are part of a larger belt of hydrocarbons andgas stretching along the eastern flank of the Andes through to ArgentinaIn Bolivia these reserves are also concentrated in historically indigenousterritories primarily of Guaraniacute peoples However unlike mining thesepopulations have played scarcely any role as labour in the hydrocarboneconomy and have more typically (until recent years) been displaced andignored by operating companies

The first hydrocarbon operations in Bolivia were along the Aguaraguumlemountain range of the Chaco of Tarija in the 1920s By the 1940s operationsextended into the Chaco of Santa Cruz and Chuquisaca as well as morehumid areas of Santa Cruz Santa Cruz steadily became the heart of operationsfor Boliviarsquos hydrocarbons sector at the same time as it was becoming theoverall economic centre of Bolivia It also emerged as an important hub formore conservative political parties and movements with a strong regionalidentity and more or less overt expressions of racism centred on differentiat-ing themselves from highland indigenous populations (Perreault 2013) Overthe last two decades large gas fields were discovered and brought into pro-duction in the Chaco of Tarija making the department of Tarija by far thelargest producer of hydrocarbons and recipient of hydrocarbon revenue in thecountry (Humphreys Bebbington 2010) However the city of Santa Cruzcontinues to be the administrative centre of the hydrocarbon economywith companies maintaining their primary offices there



76

The geography of revenue distribution from hydrocarbons (discussed inSubsection 42) has meant that these three departments have gained signifi-cantly from gas and oil extraction This has given rise to tensions with otherdepartments and the national government one result of which has been aneffort by the Movement to Socialism (Movimiento al Socialismo MAS) centralgovernment to encourage hydrocarbon exploration in non-traditional areas

SOUTHAMERICA

Bolivia

New areas reserved forYPFB as of 2015

Existing reserved areasfor YPFBExisting contracts

BRAZIL

Cobija

PERU

LA PAZ

CHILE

ARGENTINA

PARAGUAYTarija

OruroOruro

CochabambaCochabamba

0 250 km

Trinidad


Sucre

Potosiacute

N

Departments

Cochabamba

Oruro

Map 32 Hydrocarbon areas BoliviaSource Map prepared by Chandra Jayasuriya on the basis of maps made available by CEDIBCochabamba Bolivia 2017



77

such as the Amazonian lowlands of the department of La Paz3 While thereappear to be strong indications of reserves there the cost of establishingoperations is high and government efforts to drill wells lag behind the trad-itional hydrocarbon-producing areas (Paacutegina Siete 2016)

The geographies of mining and hydrocarbons have been the mirror imageof each other but over time each has extended into the primary lsquoterritoryrsquo ofthe other These geographies are important because through their interactionwith geographies of race and ethnicity they have helped produce politicallyimportant actors and some of the discourses of justice sovereignty andautonomy that these actors mobilize in arguments over natural resources

Not only have mining and hydrocarbons been politically salient theyhave also dominated Boliviarsquos economy throughout history and certainlysince 1899 the starting point for this chapter Mining production dominatedearly with a peak in the 1950s as a result of a decline in the quality ofore grades beginning in the 1930s In contrast oil accounted for less than1 per cent of total GDP in 1953 (Klein and Peres Cajiacuteas 2014) However by1972 the opening of markets for natural gas quickly led that sector to surpassoil exports Following the collapse of international tin markets natural gasbecame Boliviarsquos most important commodity Indeed in the 1980s taxes fromthe hydrocarbons sector constituted nearly 50 per cent of national income

Aggregating across minerals mining and hydrocarbons nowmake compar-able contributions to GDP 66 per cent for hydrocarbons and 68 per centfor mining Each subsector likewise contributes similarly to total exports423 per cent for hydrocarbons and 343 per cent for mining However thereis a significant difference in terms of taxes paid with hydrocarbons account-ing for 292 per cent of government revenue and mining a paltry 19 per cent(Arellano-Yanguas 2014) Conversely mining continues to provide employ-ment to significant numbers of Bolivian families which is not the case for thehydrocarbons sector

2 A Brief Periodization of Boliviarsquos PoliticalSettlement and Instability

21 Continuities and Instabilities among Elitesand Extractivist Institutions

Interpreting Bolivian history and contemporary events through the lens ofpolitical settlements is no small challenge in light of the often unruly andrupture-prone nature of national politics (Dunkerley 2007) The main diffi-culty lies in balancing attention to detail which can shed light on the forcesthat lead to new settlements with the need to tease out larger patterns Weargue that political settlements beginning in the late nineteenth century



78

and extending into the twenty-first century have been characterized bycompetition instability shifting alliances of power and deeply entrenchedforms of clientelism

As we build this interpretation we draw upon the work of both institutionaleconomists and historiographers of Bolivia In their work on the colonialorigins of economic development Acemoglu et al (2001) explore the lsquorichesto ragsrsquo trajectories of a group of once wealthy but now poor countries firstcolonized by European powers in the sixteenth centurymdasha category intowhich Bolivia would fall Seeking to explain this lsquoreversal of fortunersquo theauthors turn to an analysis of the kinds of institutions that European colonialpowers introduced to these settings They hypothesize that the differenteconomic trajectories can be explained by taking a closer look at the organiza-tion of society at the time of colonization More specifically in those territoriesof great wealth Europeans introduced lsquoextractivist institutionsrsquo4 whichfavoured control by a small elite conversely in more marginal environmentswith less obvious resource wealth the tendency was to ensure property rights(lsquoinstitutions of propertyrsquo) to a broader swathe of society (Acemoglu et al2002 1235 Acemoglu and Robinson 2012) Extractivist institutions are seenas a brake on investment and long-term economic development becausesuch institutions allow groups that hold power to capture rents and maintainpower while institutions of property are seen as contributing favourably tothe conditions necessary for investment in capitalist development5

Acemoglu et alrsquos emphasis on the lsquostickinessrsquo of institutions and the longuedureacutee of history is important However there is more than a suggestion ofpath dependence in their argument as lsquoextractivist institutionsrsquo remain firmlyin the hands of a small but cohesive elite that retains its power and privilegethrough the control of rents over an extended period of time In the case ofBolivia however recent historiography suggests that the nature of elite cohe-siveness and power is more nuanced complex and potentially fragile(Barragaacuten 2008) Economic historian Joseacute Peres Cajiacuteas (2011) argues that thelsquooligarchy hypothesisrsquo which suggests the presence of a coherent and power-ful elite exercising hegemonic power over national territory from 1880 to1930 is not supported by evidence He argues that it is more useful to analysepower relations through the prism of negotiation and accommodation ratherthan domination Through this prism Peres Cajiacuteas details a chronic struggleof the weak (lucha de deacutebiles) among sectors whose relative strength andcapacity to influence politics is uneven and generally insufficient to consoli-date a true national-level hegemony sustained over time (2011 99) He pointsto the tensions between lsquonational elitesrsquo and regional elites over the construc-tion of railway lines which resulted in clear winners and losers (Rodriguez1994 cited in Peres Cajiacuteas 2011 111) Importantly one upshot of thischronic struggle is the production of prolonged uncertainty that in turn



79

dampens the expectations of economic actors dissuades investment andgenerates negative consequences for economic growth

Bringing these insights together we argue that the roots of political settle-ments and coalitions that underlie Boliviarsquos extractivist economy can betraced to historical institutional arrangements first introduced by Spanishcolonizers and later modified during the Republican period (1825ndash80)6

These early institutions were focused on extracting silver for export to Europeand resulted in the suppression of other economic activities not linked toextraction This helped perpetuate arrangements in which a few elites linkedto the control of natural resources were able to dominate national politicseven if they were not the only groups to draw some benefit from theseinstitutional arrangements7 The emergence of oil and gas production in theeastern lowlands in the second half of the twentieth century then broughtinto being new elites as well as a new set of institutional arrangementsreflecting significant divergences from mining sector practices with regard tohow financial resource flows were collected redistributed and spent

22 Periodizing Political Settlements 1899ndash2016

With these observations in mind we suggest that the broad dynamics ofpolitical settlements in Bolivia can be discussed across five periods between1899 and 2016 The transitions between these periods are marked by somecombination of change of government period of crisis and revolution andordramatic economic change (see Table 31)

221 1899ndash1935The first period is bookended by the termination of the Federal War (1898ndash99)and the Chaco War (1932ndash35) The former pitted liberals supported by tinmining elites mostly in the La Paz area against conservatives who were morelinked to silver interests and large landowners based in and around SucreThis tension between Sucre and La Paz was indicative of this period whichwas one of regional oligarchies competing among themselves and withnational elites

The end of this period of settlement in which the so-called tin barons weredominant was ushered in by economic crisis and war The beginning ofthe Great Depression in 1929 and associated collapse of export marketsrevealed the chronic dependency of Bolivia on commodity market volatilityand marked the beginning of the end for the tin barons Then the ChacoWarwaged between 1932 and 1935 saw Bolivia and Paraguay in a dispute overinhospitable eastern lowland territory that was becoming known to hostoil reserves The Chaco War became a disaster for Bolivia while also markingthe delegitimation of the old political order and setting the stage for the



80

emergence of modern political parties the ascension of younger militaryofficers with more progressive ideas and new forms of popular politicalconsciousness8

222 1936ndash52The Chaco War changed Bolivia and Bolivians in profound ways All Bolivianmen had been conscripted to fight miners stood alongside students urbanworkers highland peasants from lsquofreersquo communities and peasants labouringon semi-feudal estates In the wake of the conflict the political system col-lapsed and a period of social protest and disorder followed In 1936 two warheroes David Toro and Germaacuten Busch launched a coup installing Toro aspresident and shortly afterwards Toro announced his intent to pursue aproject of lsquomilitary socialismrsquo Political life expanded in many directions asstudents and intellectuals explored radical politics through the creation ofnew political parties at times influenced by international currents

Meanwhile the continuing stagnation of the global tin economy markeda period in which the traditional political parties (liberal conservativerepublican) unravelled and the power of mining and landed elites beganto break down This period was also marked by lsquoincreasing polarizationbetween labour and capital in the industryrsquo (Contreras 1993 20) as wellas the undoing of old elites replaced by coalitions of new elites This wasreflected in a series of regime changes and coups leading to periods of liberalmilitary rule and reform The combination of liberal-minded militaries andincreasingly organized and radicalized labour also gave rise to a growingprominence of nationalist ideas and discourses around natural resourcesThis period of extended political disequilibrium marked the absence of anyclear settlement and a profound churning of elites with industrial elitesincreasingly challenged by new elites emerging from labour new politicalparties and factions in the military

223 1953ndash84The churning of elites culminated in the revolution of 1952 led by theNational Revolutionary Movement (Movimiento Nacionalista RevolucionarioMNR) While the period from 1952 to 1964 was hardly one of politicalquiescence the MNRrsquos sustained hold on government power allowed for theroll-out of thoroughgoing institutional and social reforms These includedbroad-based expropriation of rural estates and land reform the nationaliza-tion of mines (and thus the end of the tin barons) mass education universalsuffrage9 and social programmes A period of dominant party politics withincreased attention to the promotion of class alliances these twelve yearschanged the structures of access to and control of resources in the countryof political participation and of class alliances Indeed in this period the



81

peasantry and workers became central to the ways in which settlements werenegotiated largely because they became increasingly organized from local tonational level with the creation in 1952 of the Confederation of BolivianWorkers (Central Obrera Boliviana COB) and the National Confederation ofPeasant Workers of Bolivia (Confederacioacuten Nacional de Trabajadores Campesinosde BoliviaCNTCB) in 195310 TheMNR extended its hegemony using a mix ofclientelism and authoritarian methods in particular with the increasinglyrestless minersrsquo unions

In 1964 a military coup brought MNR rule to an end and the following sixyears combined both coup-based and electedmilitary rule Conflict within themilitary regarding both style and content of rule and a mixture of pactedcontentious and at times violent relations with organized labour and thepeasantry characterized a period of little direction The absence of any settle-ment about how politics should be done who should lead and how powerand property should be distributed characterized this period

The period of 1971ndash85 is characterized by a high degree of political instabil-ity and the absence of any clear view of models of development Militaryrule (albeit by quite distinct factions of the military at different times) resultedin varying combinations of military-society pacts clientelism kleptocracyand outright repression Governing ideas of development and societalorganization changed often in this period though importantly there was asustained commitment to the eastern lowlands whose economies andelites benefited considerably The lowland city of Santa Cruz emerged as theincreasingly obvious economic capital of the country benefiting especiallyfrom the policies of the government of Hugo Banzer (1971ndash78) Military rulecame to an end in 1982 with the election of an unstable political coalition ofcentrist and left-of-centre groupings that culminated in economic chaos andhyperinflation in 1984 and 1985

224 1985ndash2002This period begins with a textbook case of economic shock therapy andstructural adjustment in August 1985 but is also characterized by electedrule and a party-based democracy associated with a progressive withdrawalof the military and labour unions from political life Governments of thisperiod were all characterized by coalitions among parties because no partyever won much more than 20 per cent of the popular vote at election timeThus while the conduct of elections was all about party-based competitiveclientelism at the moment when governments were formed the competitionalso manifested itself as one between coalitions of parties The other stablefeature of this period is the agreement among elites on the need to institu-tionalize neoliberal rules of economic and social management in the wake ofthe economic chaos of the mid-1980s



82

Politics in these two decades are dominated by lsquopacted democracyrsquo (Assies2004 31) in which rule was mostly characterized by carefully negotiatedelections and outcomes among political elites (including the military) Whilethese coalitions were highly fluid with parties choosing governing allies forpragmatic rather than ideological reasons the constant was the necessity ofgovernment through pacts Another constant is the gradual undoing of thedevelopmental state (a process that began in the 1970s and accelerated fromthe mid-1980s onwards) because of a combination of unmanageable debtgovernment incompetence ideological desire to weaken organized labourneoliberal commitment to the progressive marketization of society and rejec-tion of any pretence that the state might have the capacity to foster develop-ment itself One consequence of this process was the closure of state-ownedCOMIBOL mines across the highlands in the mid-1980s

225 2003ndash18The last period runs from the collapse of the final government of pacteddemocracy in 2003 to the present This has been a period characterized byprofound disillusion with elite pacts the resurgence of state-led developmentand a centrality of social movement discourse and mobilization in nationalpolitics The period begins with the fall of the government of GonzaloSaacutenchez de Lozada in the wake of broad and violent social protests Whilethese protests had different origins the primary drivers were related to naturalresource politics (Perreault 2006 this topic is discussed more fully inSubsection 42) An important actor in each of these protests was the politicalmovement led by Evo Morales who had narrowly lost the 2002 presidentialelections to Saacutenchez de Lozada Moralesrsquos movement was itself a product ofresource governance in that its initial bases had been coca growers many ofwhom were themselves former miners who had been displaced by the closureof state-owned mines in the highlands Morales and MAS prevailed in the2005 elections and have ruled via a self-described government of socialmovements ever since Though MAS has been sustained by consistent elect-oral victories in part this has been made possible by constitutional changesand interpretations that allowed for the successive re-elections of Morales Insome regard the period has therefore been characterized by the increasingconsolidation of a dominant partydominant leader mode of rule11

Ideologically the Morales government rejects neoliberal modes of eco-nomic and social organization and is committed to a form of state-leddevelopment that combines both nationalist and socialist sentiments Thegovernment marks themost settled period of rule in the country since the firsttwo decades of the twentieth century This stability is grounded primarily in asettlement among most national social movements but also with certainprivate capitalist interests (lowland agricultural elites) that have been able to



83

Table 31 Periodization of political settlements in Bolivia 1899ndash2016

Period Characterization of rulingcoalition

Type of political regime Configuration of politicalorganizations

Broader developmentideology

Modes of inclusion inextractive industry

1899ndash1935 Single partytin barons Multiparty Limited access order elitecontrol characterized bycaudillismo

Modernization Employment in mines

1936ndash52 Fluid elite pacts withstrong military presence

Military and multiparty Limited access newmilitary and class elitesemerge old elites unravel

Resource nationalist Employment in mines

1953ndash84 Single partycorporatistfollowed by militarydictatorships (in pacts withdifferent sectors)

Military and multiparty Competitive clientelistwith military presence

Nationalistndashpopulistmodernization

Employment in mines

1985ndash2002 Elected lsquodemocratic pactsrsquoamong regional andsectoral elites

Multiparty Competitive clientelist Neoliberal Access to mining areas(cooperatives)

2003ndash16 MAS and the Governmentof Social Movements

Multiparty Electoral politics with defacto dominant partydominant leader

State-led transformationand redistribution

State ownership taxationand redistribution throughsocial transfers ownershipof mining cooperatives

OUPCORRECTED

PROOFndashFIN

AL2252018

SPi

continue operating in ways that allow for significant profit Completelyexcluded from this settlement however have been historical political elitesfrom the east as in another similarity to the liberal period the settlement ispolitically centred in the highlands

In each of these five periods (summarized in Table 31) therefore it is clearthat overall political settlements cannot be discussed separately from miningand (later) hydrocarbons given the overwhelming economic and politicalsignificance of these sectors The interactions between political settlementsand natural resources across these periods are discussed in more detail in thefollowing two sections mining in Section 3 and hydrocarbons in Section 4

3 Mining and Politics The Long Journey fromOligarchs to Cooperatives

31 From Oligarchic Private Mining to the Unravellingof Resource Nationalist Mining

From the late nineteenth century until post-World War II (WWII) mining inBolivia was dominated by a small group of elite Bolivian families first linkedto silver mining (known as the Patriarchs of Silver) and later supplanted in theearly twentieth century by families linked to tin mining (the tin barons)12

These families increasingly dominated the national economy and politicsthough in slightly different ways while the former exercised direct controlof the presidency at times the latter exercised power indirectly and behind thescenes through the so-called lsquoroscarsquo13 and lawyers and politicians under theircontrol (Mesa et al 1998) At the same time the emergence of tin as a valuablecommodity led to the rise of new mining elites who were both more entre-preneurial and more liberal than silver elites More importantly tin alsosparked a shift in Bolivian politics as the (tin-based) Liberal Party and La Paz-based regional interests demanded the creation of a federalist system greaterrevenue sharing and more autonomy from the Conservative Party govern-ment in Sucre14

Tin production was dominated by three Bolivian producers Simon Patintildeothe Aramayos and the Hochschilds The most famous and important of thesewas Patintildeo a self-made man rising from humble origins to become the richestman in Bolivia and the Americas At its peak Patintildeorsquos tin empire controlled10 per cent of world production and 80 per cent of tin smelters (CaprilesVillazoacuten 1977 Granados 2015) Patintildeo also played an important thoughcontroversial role in the Chaco War by lending the Bolivian governmentmoney and donating planes for the war effort15 The Aramayos were descend-ants of an old silver family and active in the mining sector until the 1952reforms while the Hochschilds a family of Jewish immigrants from Europe



85

eventually left Bolivia to developmining interests elsewhere in Latin America16

Tin cemented the importance of La Paz and the centrality of the altiplanoin Bolivian politics and the new tin elite exerted enormous influence overinfrastructure investment and fiscal policy The barons were also favouredby the commodities boom from 1922 to 1929 in which tin prices rose signifi-cantly as did international demand and production

The tin boom drove increasing government debt which grew fivefoldfrom 1900 to 1922 as the state took on loans to invest in railway net-works to support the sector but failed to impose any significant taxes onthe mines until the 1920s Disputes between national and regional elitesemerged over public investment in railway lines roads and other publicinfrastructure The inability of economic and political elites to agree onhow to diversify the economy combined with an increasing relianceupon tin revenues to finance government not only reinforced the nar-row base of the Bolivian economy but also fed nationalndashsubnationaldisputes over budgets stunted institutional development and derailedthe pursuit of broader development initiatives (Orihuela and Thorp2012 32ndash3)

At the same time as the tin elite exercised significant control over capitaland politics17 the period was characterized by growing mine labour andindigenous organization a series of strikes (one of which ended in theappalling Unciacutea massacre in 1923) and a growing instability in pactsamong mining interests following the Depression18 The governmentneeded more tax revenue to pay off burdensome loans including thosefor infrastructure to support the mining sector and by the 1920s hadmanaged to install something of a tax system and a fiscal commission(Comisioacuten Fiscal Permanente) which lsquoexhaustively reviewed the books ofmining companies and succeeded in collecting significant amounts frommany of them in back taxesrsquo (Contreras 1993 11) Meanwhile a boom intin prices from 1922 to 1929 ended with the collapse of world marketsafter the 1929 Depression leading the government to introduce a systemfor distributing export quotas among mining companies that pitted com-panies against each other and weakened their national representativeassociation Finally despite enjoying a relatively stable political settle-ment the period was characterized by development disappointmentGiven the explosive growth of the tin economy Contreras (1993 8)argues that

[T]hemining industry was not the great lsquoengine of growthrsquo of Bolivian developmentthat it could have been [primarily because of] (i) governmental incapability toextract higher taxes from the mining industry particularly during the first



86

decades together with the inefficient use of that income which was generated and(ii) the factor that themajormining companies after obtaining large profits did notinvest in the country

These were without doubt important factors though it is also true thatmining failed as an engine of growth in later decades when taxes were higherand that the relative paucity of business opportunities in Bolivia may havebeen a factor in minersrsquo decisions not to invest in the country Whatever thecase in many respects it is the ghost of this development disappointment thathangs over the MAS government today as it negotiates how to manage largebut unstable resource rents this time from natural gas and seeks to convertthem into lasting and significant social change and development

These dynamics played out in the context of a more serious structuralchallenge the countryrsquos increasing isolation and limited prospects for eco-nomic growth in the wake of its loss of coastal territory in the War of thePacific (1879ndash83) and the imposed constraints from the peace settlements thatfollowed19 In many ways Bolivia never fully recovered from the loss of thesePacific ports and this certainly constrained the expansion of mining andother investments in the altiplano while also contributing to the countryrsquoseventual turn eastward for economic growth and development20

Following the Great Depression and crises in the tin sector of the 1930s andpost-WWII era the mining sector entered a profound slump (Whitehead1972) The viability of agro-pastoral production and mining in the altiplanocame into question The government which had already begun to supportcolonization of the eastern lowlands and the promotion of commercial agricul-ture redoubled its efforts Support came from the Bohan Commission a USgovernmentmission sent to Bolivia in 1941ndash42 to help draft a strategic plan foreconomic development and cooperation In addition to supporting the expan-sion of a modern commercial agricultural sector the lsquoBohan Planrsquo called forincreased development of hydrocarbon resources in the eastern departmentswhich had been discovered and developed by Standard Oil of New Jersey inthe 1920s and later nationalized in the 1930s Hydrocarbon production wouldbe revitalized through private investment to generate the revenues needed tofund government and replace lost income from a decliningmineral sector Theplan was embraced by political elites from the east and uncontested by eliteselsewhere It served to orient US development assistance to Bolivia for decadesthough it would take sixty years and another round of privatization before thehydrocarbons component of this vision would come to full fruition21

While development planners and some elites were looking east mininglabour was becoming increasingly organized and militant with closer linksto political partiesmdashboth of the far left and the emerging (centrist) MNR This



87

strength won labour a series of favourable legislative provisions which alsohad the effect of increasing minesrsquo costs of production Struggles betweenmine owners and labour became increasingly acute including through themassacre of striking miners at Patintildeorsquos Catavi mine in 1943 This was imme-diately followed by the creation of the Union Federation of Bolivian MineWorkers (Federacioacuten Sindical de Trabajadores Mineros de Bolivia FSTMB) in 1944which subsequently called for greater militancy and the seizure of minesthrough the Trotskyist-inflected lsquoTesis de Pulacayorsquo in 1946

The FSTMB and especially more radicalized elements such as the tin minermilitias from the altiplano played an important role in the MNR revolution ofApril 1952 which became the first lsquonational-popularrsquo revolution of post-WWIILatin America (Hylton and Thomson 2005 42) A coalition of these mininggroups urban-basedmiddle-class reformists radicalized students and workersfrom La Paz ushered in the government of President Paz Estenssoro whichpursued an ambitious and wide-ranging reform agenda These reforms soughtthe definitive end to oligarchic privilege and power which inter alia requiredseparating the oligarchy from natural resource ownership through agrarianreform and nationalization of the mines The ideas and discourses mobilizedin this period reinforced the centrality of extractive industry in the countryrsquoseconomic development process and imaginary with effects felt through tothe present22

The state only nationalized the mines of the tin oligarchs (Patintildeo Hochs-child and Aramayo) as they were seen as anti-patriotic and responsible forBoliviarsquos economic weakness The tin barons sought to establish joint oper-ations with the state but this proposal was rejected Eventually the state tookcontrol of 80 per cent of mineral production (see Contreras 1993) The MNRgovernment created COMIBOL to administer these newly nationalizedminesand introduced the concept of co-government of mines with mine workersMeanwhile in the absence of any countervailing power and under pressurefrom the US government the hydrocarbons sector was reopened to foreigninvestment

If the 1952 revolution effectively disrupted the old regime it also profoundlyreshaped peasantndashindigenousndashworker interactions with the Bolivian stateThe government pronounced all rural workers to be campesinos (peasants) andquickly moved to create a dense network of rural unions (first linked to theexpropriated landed estates but then to more traditional communitiesmdashespecially in thealtiplano) The rural unionsbecamevehicles for ruralpopulationsto gain access to government services and programmes among them the newlyintroduced food programmes supported by international aid23 Corporatist tieswere cemented between the state and the peasantry that would last far beyondthe MNR government re-emerging in important ways in the MASMoralesperiod From this point forward the campesinado (peasantry) became a



88

central actor in Bolivian politics The military dictatorships that immediatelyfollowed the MNR government were quick to institutionalize the alliance inthe form of the Pacto Militar Campesino (Military Campesino Pact)

Following the overthrow of the MNR government in 1964 by Reneacute Barrien-tos formal politics entered a period of hyper-political instability described byJames Dunkerley as a lsquocontinuity of rupturesrsquo (2007 114) Over an eighteen-year period fourteen governments came to power almost all of themmilitaryand many via the ubiquitous lsquocoup drsquoeacutetatrsquo Violations of human rights werefrequent and a culture of violence and impunity took root24 Significantlyunder authoritarianism the conservative right tended to forge alliances withmilitary regimes while the progressive left sought alliances with more pro-gressive officers within the armed forces With no single political party strongenough to challenge military rule party loyalties tended to be fluid andpragmatic (Dunkerley 2007 118) Economic management was poor and themining sector suffered because of repression of unions but also from a lack ofany strategy to invest in or strengthen COMIBOL

Profound divisions within the military ultimately led to a return of a (weak)civilian political coalition first elected in 1980 but prevented from takingoffice until 1982 The return to civilian rule coincided with the emergingdebt crisis in Latin America an empty treasury and a restless citizenry Slidinginto social crisis Paz Estenssoro the president who had led the revolutionof 1952 and now in the role of elder statesman was elected to power in1985 He promptly announced a programme of stabilization including apackage of emergency economic measures to stem hyperinflation Thecountryrsquos plight was compounded by the dramatic collapse of tin marketsin 1984 and the resulting crisis of tin mining a key source of rural employ-ment and export revenues Among the measures taken to reduce publicexpenditure and open the economy to external competition the nationalmining company COMIBOL was lsquodecentralizedrsquo into a series of regionalunits and a policy of relocalizacioacuten (relocation) was introduced25 Nearly80 per cent of COMIBOLrsquos workforce comprised largely of indigenoushighland miners was dismissed The FSTMB fought the closures and nego-tiated with the state to maintain production at some sites But this timestrikes and road blocksmdashthe tactic of choice in so many previous conflictswith the statemdashheld no sway With little left to negotiate rural familiesheaded to urban settlements in El Alto and Cochabamba the Chapare tocultivate coca leaf and further afield to Argentina and Brazil The ensuingexodus from the mining sector has had profound implications for Boliviarsquossocial and political landscape as seen in the capacity of ex-miners toorganize the Juntas Vecinales at the forefront of the 2003 Guerra del Gasconflict and more recently the role of colonist families (many of themex-miners from the highlands) in the Isiboro Seacutecure Indigenous Territory



89

and National Park (Territorio Indiacutegena y Parque Nacional Isiboro-Seacutecure TIPNIS)conflict of 201226

However not all families abandoned mining and an important number ofthem negotiated with the state in order to obtain concessions and equipmentto continue mining activity on a small-scale basis as organized cooperativesThis was not a new institutional arrangement mining cooperatives had longexisted in the highlands in particular in the department of Potosiacute Fromcolonial times miners practised Kachi arrangements in which miners wereallowed to enter certain areas of the mine and work independently sharingthe value of the minerals they produced27 In the twentieth century thispractice persisted and was consolidated in times of economic crisis Analyststoday continue to maintain that the rise of the cooperative sector is linked tothe long practice of Kachi and the statersquos legalization of independent miningvia the measures introduced by Gonzalo Saacutenchez de Lozada the planningminister and implementer of the stabilization programme (Poveda 2012Francescone and Diacuteaz 2014) In hindsight the governmentrsquos recognitionand support of the cooperative sector might be seen as a so-called salida depasomdasha pragmatic exit from an immediate problem It certainly was neitherpart of a longer-term view of developing the mining sector nor an attempt toincrease popular access to mineral resources The organization of cooperativesand the transference of concessions and equipment for the purposes ofexploitation at least partially resolved the immediate question of what to dowith mining families It also complemented the governmentrsquos larger plan ofreopening the mining sector to foreign capital in the hopes of revitalizing along moribund industry inter alia to satisfy the personal interests of thepresident (Hindery 2013a Kaup 2013)28

32 Emergence of Cooperativism and the Returnof Large-Scale Private Mining

While many subaltern actors in Bolivian politics have gained visibility andpower over the last thirty years the trajectory of themining cooperatives fromassertive excluded faction to prominent actor in the current political settle-ment is most noteworthy One interviewee a former Assembly representativefrom the department of Potosiacute noted

The cooperatives have always made pacts with neoliberal governments of thepast with the MIR with ADN with the MNR and NFR in order to have access tomining concessions and benefits Before MAS the cooperatives had these pactsThe mining cooperatives were against the Constituent Assembly [to reform theconstitution] and they marched against it with dynamite in hand Today afteropposing the new constitution the cooperatives are now the transcendent political



90

allies of this government not the Federation of Mine Workers not theConfederation of Workers [COB] It is the Federation of Cooperative Miners[FENCOMIN] and its departmental and regional affiliates that are part of thispolitical alliance (Authorsrsquo translation)

The emergence ofmining cooperatives has produced wide-ranging impacts onthe development of Boliviarsquos mining sector (Francescone 2015) This is evi-dent in the significant influence they exerted to shape the policies practicesand governance of the sector in the new LeyMinera (Mining Law) ofMay 2014The sector is also one of the closest allies of the MASMorales government asthey can be relied upon to mobilize their massive numbers (estimated at over100000 families) eclipsing the importance of the statersquos historical ally theFSTMB29 In acknowledgement of their political power one formerminister ofmining explained that the MASMorales administration created three vice-ministry positions assigning each key sector either a vice-ministerrsquos or minis-terrsquos seat the cooperative sector the FSTMB and private medium-scaleminers Moreover a representative of the cooperative sector was appointedminister in 2013 though was later replaced in the midst of negotiationsaround the newMining Law in favour of a more conciliatory figure not linkedto a particular mining constituency30

To secure their unconditional support the mining cooperatives receivehighly favourable treatment that is at times better than that received by theFSTMB miners who labour for COMIBOL This is not lost on the latter whohave seen their power diminished both politically and at times physicallyas in the case of the Huanuni mine conflict of 200531 According to oneex-minister of mines interviewed the cooperativeminers pay only theminingroyalty which is 5ndash7 per cent of the total value of their production They do notpay IVA (value-added tax) and are exempt from additional (social) costs thatprivate mining firms and COMIBOL are obliged by law to cover The smallerless organized cooperatives do not contribute to pension schemes (though thelarger better organized cooperatives do) Cooperatives are not required topresent an environmental licence for their activities nor fulfil other environ-mental requirements32 The newMining Law of 2014 also provides for low-costloans technical assistance and social benefits to the cooperative sector

The cooperative sector also enjoys preferential treatment in terms of receiv-ing concessions for areas to work a practice which appears to be in contradic-tion to a stated government agenda to consolidate a state-led miningeconomy In a highly fluid context cooperatives attempt to gain access tomines through two routes The first involves petitioning COMIBOL for con-cessions which may be pursued through the violent occupation of a (privateor state-owned) mining operation in order to force the government to give



91

them more areas to work The second tactic involves a more collaborativeapproach in which privatemining interests sub-contract cooperatives to workspecific areas andor carry out tasks as in the case of the San Bartolomeacute minein the vicinity of Cerro Rico3334 What is markedly different from previouseras of extraction is the high level of social conflict and violence associatedwith the expansion of mining (CEDLA 2014 Fundacioacuten UNIR 2014) Whilethe government has moved to discourage violent occupations of mines policepresence in rural areas is weak and the government is hesitant to send in themilitary to remove the occupiers Analysts criticize the government for doingtoo little too late pointing to the now entrenched modus operandi of coop-erativists (and other opportunists masquerading as cooperativists) that hasconstrained the prospects for developing a vibrant modern state-led miningsector (Espinoza Morales 2010 Oporto 2012)

The emergence of the cooperative sector is critical to understanding thechanging structure of capital investment and economic development as wellas to interpreting shifts in the political base of the MASMorales governmentof social movements However it would be incorrect to suggest that thismarksthe beginning of the end of transnational mining and private investmentin Bolivia Indeed cooperatives contribute little to the national budget byway of taxes or royalties Instead mining revenue comes largely from a singleoperation the San Cristobal mine in southern Potosiacute which accounts for30per cent of all exportmining revenues (CEDIB 2013)Operatedby Sumitomoa Japanese firm the mine produces silver zinc and lead In 2011 the mine paidUS$150 million in royalties and taxes The rest of Boliviarsquos private mineswhile not as large also contribute important sums in terms of royalties andtaxes These are medium-scale mines with investors from Canadian USAustralian and Korean firms who often partner with Bolivian firms repre-sented by the National Association of Medium-Scale Mining (AsociacioacutenNacional de Mineros Medianos ANMM) In recent years private investmentin the mining sector has stagnated as only the most risk-tolerant firms moveforward with projects One national mining authority interviewed noted thatprivately the government promotes foreign investment in mining thoughits public message is more antagonistic35

Under the 2014 Mining Law the Bolivian government will convert allexisting mining concessions to joint contracts with COMIBOL with theobjective of reasserting sovereignty (if only symbolically) over the countryrsquosnatural resources and deterring speculation36 Of the various actors in thesector COMIBOL the FSTMB and ANMM stand to lose the most In thecase of COMIBOL the government is forced to cede its plan to forge amoderndynamic state-owned mining sector and instead focus on attracting foreigncapital (when possible) and pursue initiatives to exploit and industrialize ironore (via the Proyecto Mutuacuten in the department of Santa Cruz) and lithium (via



92

a joint investment in Potosiacute) These are both long-term projects that have thepotential to radically reshape Boliviarsquos mining industry However they requireenormous investment over a long period of time and the MASMoralesgovernment has not shown the capacity to negotiate contracts that cansupport the development of iron ore and lithium reserves Meanwhile theFSTMB has been displaced by a more vocal and militant cooperative leader-ship that has extracted major concessions from the government While theycontinue to be important allies as a social movement their relatively unim-portant role in the negotiation of the new Mining Law suggests a very differ-ent trajectory for COMIBOL and a less visible political role for unionizedmineworkers Finally medium-scale mining companies will have to negotiatecomplicated arrangements with the Bolivian state (via COMIBOL) as well aswith communities cooperatives and in some cases with formally recognizedindigenous communities

33 Summary

In this section we have demonstrated that the control of mining in Boliviashifted broadly over time from internationalndashnational capitalist control tonational capitalist control to state control to a return to international andnational capitalist control followed finally by increasingmdashand increasinglyprominentmdashcooperative influence These changes reflect shifts in the largerdevelopment ideas and discourses across the settlement periods outlinedearlier from liberal capitalist to developmental statist to neoliberal to stat-istresource nationalist and social movement-based These changes reflect theshifting influence and politics of different actors within national settlementsat the same time as they have helped to constitute certain actors as particularlypowerful The changes also point to the complex relationships between eco-nomic and political power as much for nineteenth-century mining elites asfor cooperatives today while their economic power has been a basis for theirpolitical power they have also used their political power to secure andenhance their economic power The current context is one characterized bythe increasing power of the cooperatives and a pragmatic institutional plural-ism that accommodates their demands but also permits private capital tocoexist and participate profitably in the sector

Changes in the sector also reflect shifts in the relative importance ofdifferentmodes of inclusion throughmining In earlier periods mining policywas not very inclusive except through labour With the creation ofCOMIBOL in the 1950s inclusion took place through labour that soughtboth economic and political inclusion for miners through co-governmentwith miners taking up positions in the bureaucracy and also throughgovernment-administered clientelist programmes funded by rents generated



93

by COMIBOL In the neoliberal period at least initially there was limitedinclusion of either type (few jobs and low tax revenues) However the eco-nomic crisis at the moment of adjustment (1985) sowed the seeds for a newmodel of inclusion First the governmentrsquos transfer of mining rights to dis-placed miners organized as cooperatives created the basis for what has nowbecome a large sector In this case what was initially an effort to foster limitedeconomic inclusion (through allocating mining rights) triggered processesthat have culminated in far greater political inclusion demanded by an organ-ized sector with substantial capacity (or lsquoholding powerrsquo in Khanrsquos terms37) toexercise influence over other actors national elites and the nature of thenational political settlement Second adjustment in 1985 was accompaniedby the creation of the Social Emergency Fund an effort to foster very basicinclusion under conditions of crisis In retrospect this initiated the model offund-based social protection financing that has since become central to theMAS governmentrsquos efforts to foster inclusion38

4 Hydrocarbons Regionalism and Economic Development

41 The Rise and Demise of Hydrocarbon Nationalism

The emergence of oil as an additional source of rents began in the early yearsof the twentieth century far from the disputes and struggles of the La Paz-based mining and landed elites Some minor investment speculation andexploratory activity took place prior to this period but it was not until 1921when Standard Oil of New Jersey began exploring for oil in the Chaco that thesector attracted any real interest The first fields brought into production werein the area of Bermejo (1924) just north of the frontier with Argentina in thedepartment of Tarija followed by a series of discoveries along the Serraniacutea deAguaraguumle in the Chaco of Tarija (which has become an area of renewed gasexploration in recent years) These were remote sites in a marginal regionoccupied by a mix of lowland indigenous groups cattle ranchers missionar-ies and indigenous peasants tied to landed estates

The purported role of oil companies in fostering the Chaco War (1932ndash35)in which over 50000 Bolivian soldiers died changed how Bolivians viewedthe role of the state in administering and protecting the countryrsquos naturalresources Political analyst Carlos Toranzo Roca (2009) argues that historicalinterpretations of the Chaco War as having been fought over oil producedan idea fuerza (dominant idea) that oil is part of Boliviarsquos strategic wealth andthat the state must retain control over the hydrocarbons sector This ideapersists among the general public through to the present and underlies theMASMorales discourse39



94

The post-war coup-installed military government moved to regain controlover the countryrsquos hydrocarbon resources by confiscating the oilfields ownedby Standard Oil and in so doing established yet another idea fuerza that of themilitary as defender of Boliviarsquos natural resources In 1937 the governmentcreated a national hydrocarbons agency Bolivian National Oilfields (Yaci-mientos Petroliacuteferos Fiscales de Bolivia YPFB) In addition a Ministry of Minesand Petroleum was established to oversee the development of the extractivesectors and to promote a modern technical management of the countryrsquosresources For the next fifteen years YPFB was the sole operator in the sectordrilling at different sites in the Chaco and gaining expertise in the emergingoil and gas sectors

As a relatively small actor providing modest amounts to the nationalbudget and with physical operations in a distant territory YPFB was able togrow develop technical capacity and consolidate its operations relativelyundisturbed The hydrocarbons industry in Bolivia never produced a nationalhydrocarbon elite of oilmen and speculators (as it did in the United States oras mining had already done in Bolivia Kaup 2013) Instead as YPFB grew itproduced an important if small number of engineers and managers Some ofthese were trained in Mexico and therefore knew the experience of state-ledMexican Petroleums (Petroacuteleos Mexicanos PEMEX) while others were trainedin the United States particularly in Texas and forged ties with internationaloil companies Those who worked in the industry in Bolivia in the decadesfrom the 1950s to the 1970s often came to occupy important positions incentral bureaucracy and in the governments of oil-producing departmentsestablished technical services firms serving the industry or took up consult-ancy work as analysts in the country and abroad

In contrast to the royalties produced from the mining sector which weresent to the national treasury (mining rents never formed an important partof departmental budgets) the system of royalties for oil (and later gas) fol-lowed a different trajectory This system was first laid out in legislation datingto 1921 and later reaffirmed in the Organic Petroleum Law of 1938 whichestablished that a royalty payment of 11 per cent of the value of oil produc-tion would be paid to the region where it was produced The Busch Law of1957 ratified the arrangement again though there were efforts by centralgovernment to modify these payments While the amount paid was initiallymodest (in 1954 the department of Santa Cruz received only US$76000 in oilroyalties) payments rose quickly as production increased (Barragaacuten 2008)When in the mid-1950s the MNR government sought to rein in thesepayments the response was a regional citizen revolt in Santa Cruz in whichthe Comiteacute Ciacutevico (Citizenrsquos Committee) a group of prominent citizens lobby-ing for departmental interests launched a two-year protest to receive their11 per cent royalty in support of their economic development (Roca 2008)



95

Eventually the government ceded to the demands of the Santa Cruz rebelsThe department of Tarija a more modest producer of oil allied with theSanta Cruz Comiteacute Ciacutevico to demand to be included in the same arrangementand thus Tarija also began receiving royalties paid directly by YPFB to depart-mental coffers40

Importantly these social mobilizations organized by regional political andeconomic elites to institutionalize the payment of hydrocarbon rents todepartments reinforced another set of ideas fuerza The first of these was thatproducing regions were entitled to a direct flow of the financial resources linkedto the amount of hydrocarbons produced in their territory The second ideawas that these resources were needed in order to promote the economicdevelopment aspirations of regions that had been neglected and harmed bythe excessive centralism of La Paz and the highlands A third idea fuerza wasthat regional governments must be vigilant against efforts by the centralgovernment to reclaim departmental revenues41 These dominant ideas linkedto hydrocarbon rents have persisted over the last six decades fuelled signifi-cant social conflict in recent years and continue to shape the current (post-2003) political settlement despite the efforts of MAS and Morales to reformhow hydrocarbon rents are distributed and spent across national territory

Under pressure from the US embassy the MNR government agreed to signthe Davenport Code in 1956 which transferred potential areas of productionheld by YPFB to the US-owned Gulf Oil In 1969 another military govern-ment led by General Alfredo Ovando reclaimed sovereignty over Boliviarsquosoil and gas fields with a second nationalization Advising Ovando were twoinfluential public intellectuals Marcelo Quiroga Santa Cruz later namedMinister of Mining and Petroleum and Sergio Almaraz a strategist of the leftBoth effectively mobilized nationalistndashpopulist sentiments that resonated withthe working and urbanmiddle classes and with YPFB workers and technocratsThrough nationalization the country recovered about 90 per cent of its gasreservesmdashconsidered to be illegally controlled by Gulf Oil Bolivia was thenable to negotiate a long-term agreement to deliver natural gas to Argentinarsquosexpanding market Shortly thereafter during the Banzer dictatorship thenatural gas sector further expanded with the possibilities of serving newmarkets in Brazil (1972)42

By the early 1990s however the sector was again confronting a shortage ofcapital to invest in exploration and the development of new fields With thedecline of tin revenues the Latin American debt crisis and constraintsimposed on public expenditure through neoliberal measures the coffers ofYPFB were empty (Morales 1992) To further aggravate YPFBrsquos woes an erraticpayment arrangement between Bolivia and Argentina for the delivery ofnatural gas meant that YPFB did not always receive what it was owed As thecontractual arrangement allowed Bolivia to be paid lsquoin kindrsquo repayment



96

would take the form of equipment processed fuel or other inputs amongother things As both countries suffered from significant currency devalu-ations and general economic mismanagement keeping track of deliveriesand payments became exceedingly complex This led to the infamous borroacuteny cuenta nueva when both countries threw up their hands and agreed to settleaccounts with a lsquoclean slatersquo43

The period from the 1930s to the 1980s was therefore one of oscillationbetween private and state control of the industry While the state was neverable to adequately strengthen a national hydrocarbons company social andpolitical leaders were recurrently inclined to deploy ideas of resource nation-alism because of historically inherited distrust of transnational companies Inparallel with this regional actors in hydrocarbon-rich areas became increas-ingly strong and able to make claims for the earmarking of tax and royaltyrevenue for regional needs The seeds of hydrocarbon nationalism planted inthe 1960s would re-emerge in the twenty-first century again in a context ofregional claims for revenue sharing This time however these claims alsoemerged in the context of a government based on a stable settlement withnegotiated relations both with parties to the settlement (mostly social move-ments) as well as with strategic excluded factions This has led to greaterstability in hydrocarbons governance as discussed in the following section

42 Resource Regionalism Social Movement Nationalismand the Governance of Natural Gas

By the 1990s the combination of a pacted democracy (Assies 2004) and inter-elite agreement on neoliberal economic management became progressivelyless stable in the face of new more radical political currents in the Andeanhighlands the coca growersrsquo movement (cocaleros) in the Chapare and theincreasing mobilizations of lowland indigenous groups in the east Thecombined effect of these distinct forms of lsquoholding powerrsquo forced politicalleaders to address issues of political economic and social inclusion Inresponse the first Saacutenchez de Lozada government (1993ndash97) launched abroad-ranging reform programme that created new vehicles for grassrootspolitical participation and decentralization These programmes sought toappease excluded factions (especially subnational ones) while at the sametime actually deepening market reforms and opening up new opportunitiesfor capital investment in natural resources (Kohl 2002 Farthing and Kohl2005) Through a series of new laws the government announced the cre-ation of 311 new municipalities with elected town councils These would besupported by municipal citizen oversight committees and have control ofmodest budgets44 These new municipalities would now receive a direct flowof resources from the central statemdashan arrangement that has been reaffirmed



97

and expanded under the MASMorales government Saacutenchez de Lozada didnothing however to recognize regional demands for greater political auton-omy45 fearing this would lsquoBalkanize Boliviarsquo (Roca 2008 66) This was there-fore an attempt to build amega-pactwithmunicipal governmentswhichwouldallow the central government to work around entrenched and hostile politicalelites in the departmental capitals46 In the end though the effort to incorp-orate subnational factions through resource transfers rather than the delegationof political powers was insufficient to sustain the settlement

Political and economic elites generally supported these neoliberal reformseven though the power of La Paz elites and the dominant position of thewestern departments and the mining economy were significantly impacted(those in La Paz for example saw their access to government posts and publicfunds diminish Molina 2008 7) Bolivia pursued its own version of the privat-ization of state assets through a programme of lsquocapitalizationrsquo in which thegovernment retained only a minority share in former state enterprises YPFBwas broken down into various operations and sold off to foreign investorsretaining only minimal functions of promotion information and regulationAttracted by extremely favourable terms some of the worldrsquos largest oil com-panies became involved in the sector as the lsquofire salersquo of YPFBrsquos assets coincidedwith a worldwide boom to search for and bring into production new oil and gasreserves Numerous scholars have argued that this sell-off of state assets was anact of betrayal by the political elite and ultimately gave rise to an environmentof hyper-social mobilization and conflict that would eventually end decades ofpacted democracy in 2003 (eg Kaup 2013 Farthing and Kohl 2014)

The break-up of YPFB thus effectively put control of the hydrocarbons sectorin the hands of international firms who moved to develop their projects in ahighly fluid and competitive environment influenced by international hydro-carbons and capital markets By the turn of the century the natural gas marketwas booming and lsquonew discoveriesrsquo led by Petrobras (Brazil) and REPSOL-YPF(Spain) led to projections that Bolivia would be a major producer and distribu-tor of natural gas for the Southern Cone region (Brazil Argentina Paraguayand Chile) It is important to note however that several authors as well asformer YPFB officials and Bolivian geologists interviewed for this projectargue that YPFB already knew about the existence of these lsquonewly discoveredrsquowells and that they were on the maps that YPFB had to turn over to foreignfirms under privatization The sting in the tail is that the tax regime was muchlower for new discoveries 18 per cent versus 50 per cent for existing wells Thisfed the public perception of an all-out pillage by transnational firms andnurtured a grievance that culminated in MASMoralesrsquo nationalization of oiland gas fields in 2006

A series of mergers and acquisitionsmdashexercised far beyond the borders ofBoliviamdashproduced a landscape of investors speculators and operators that



98

were beyond the control of the state The public perception especially inthe highlands was that transnational firms and institutions were now incontrol of Boliviarsquos gas resources (Perreault 2006) In contrast regionalleaders and elites in the departments of Santa Cruz and especially Tarijawhere the gas boom was centred were less critical of the presence oftransnational firms and actively participated in the promotion of majorinvestments In interviews with a range of social actors in Tarija mostnoted that there was generally a positive reaction to gas projects as thiswould mean that departmental revenues would increase along with employ-ment and other economic activities As petroleros (a term used to describe allworkersofficials linked to the oil and gas industries) had a long-establishedhistory in the region and hydrocarbons had contributed to the develop-ment of the Chaco and the city of Tarija there was less animosity towardstheir presence While there was some opposition by indigenous groups onwhose territories much of the resources were located their mobilizationswere dismissed as little more than an attempt at rent-seeking (HumphreysBebbington 2010)

In the rest of the country and in particular the highlands the expansion ofhydrocarbon investments in the 1990s and early 2000s was generating anx-iety over the sense of lost wealth as well as increasing animosity towardspolitical leaders Ethnic tensions flared between east and west The rise ofMAS which was linked to the cocaleros in the Chapare (Cochabamba) andtheir standard-bearer Evo Morales emerged as the most coherent and organ-ized force among Boliviarsquos political movements MAS would lead the demandfor greater political participation and an end to neoliberal policies A series ofviolent confrontations between social movements and the government overthe privatization of water services in the city of Cochabamba known as theWater War led to social mobilizations elsewhere in the country (Assies 2004Perreault 2006) From Cochabamba street mobilizations spread to the alti-plano Initially social mobilizing centred on opposition to the Ley de Aguas(Water Law) and an end to concessioning water but then encompassed publicrejection of coca eradication policies and the proposal to export Boliviannatural gas via Chile

Facing the spread of unrest Saacutenchez de Lozada called in the military torestore order Dozens of protestors were killed and hundreds were injured inthe resulting conflict Images of bloodied protestors projected in televisednews reports provoked immediate outrage at the outsized use of force by thegovernment prompting Saacutenchez de Lozada to resign and depart the countryAfter some thirty years of pacted power sharing the political settlementcollapsed Though the original grievances behind the lsquoGas Warrsquo had beendiffuse the multiple sites of protest coalesced into a unified public demandthat the state retake control of the nationrsquos natural resources As we will show



99

further this reflects once more the centrality of natural resources to theformulation (and demise) of Bolivian political settlements47

The incoming president Carlos Mesa was seen as a more moderate andconciliatory figure and he moved to introduce a series of reforms to calmtensions To appease both protestersrsquo concerns as well as calls for greaterregional autonomy from the bloc of eastern departments (Santa Cruz TarijaBeni and Pando) he offered to allow regions to elect their prefects directly(previously they had been appointed by the president)48 Under the Mesagovernment the Hydrocarbons Law 3058 (2005) was passed which has sincebecome the basis for the current political settlement The law helped resolve acrippling political crisis by creating a framework for sharing the financialresources generated by extraction It increased the taxes levied against foreigncompaniesrsquo revenues while also expanding distribution to a broader range ofsectors and interest groups with important implications for how different socialand political projects are pursued and sustained Once again then a mechan-ism was created to allow the fashioning of political settlements on the basis ofnatural resource revenues

Despite these efforts tensions continued to flare across the country result-ing in Mesarsquos resignation and a special election in 2005 Morales and MASwere easily elected to power in the first round through the support of acoalition of highland and lowland social indigenous and peasant movements(his closest allies) urban intellectuals NGOs urban middle-class workersand trade union members Much of Moralesrsquos base came from the altiplanobut he also received significant support from the ever-expanding migrantcommunities (largely from the altiplano) in urban centres and from poorersectors throughout the country (even in the four eastern departments) TheMoralesMAS government represented a return to state-led capitalist develop-ment under the control of a movement-based party The basis of its economicproject is a continuation of the extraction and export of natural resources(especially hydrocarbons) with a programme of redistribution via cash trans-fer programmes Industrialization of Boliviarsquos natural resources is also part ofthe larger vision with a view to altering how Bolivia participates in the globaleconomy

One of Moralesrsquos first moves was to renationalize Boliviarsquos hydrocarbonsThrough a decree referring to the fallen Heroes of the Chaco and mobilizingthe lsquopolitical mythologyrsquo49 of a war purportedly fought to defend Boliviarsquosnatural resources Morales travelled to the most important gas field (operatedby Petrobras) to declare lsquothe gas is oursrsquo The enormously popular moveproduced reverberations in international financial markets and put Boliviain the category of poor investment environments (in ratings such as thoseproduced by Verisk Maplecroft Risk Index 2013) More practically it pro-voked tension with Boliviarsquos biggest neighbour and consumer of gas Brazil



100

Petrobras the hybrid state firm effectively produces about 60 per cent of allBolivian natural gas and consumes upwards of 70 per cent of all gas producedby the country In addition it operates several major pipelines and providesimportant technical assistance and support to YPFB

In the end the renationalization was more symbolic than real insofar as itdid not confiscate the camps equipment and related infrastructure Petrobrascontinued to produce and transport natural gas and ensure that financialresources flowed to government coffers What the nationalization did accom-plish however was the unravelling of some of capitalizationrsquos most egregiouserrors It re-established sovereignty over natural resources abolished conces-sions and forced all companies to enter into joint contracts with the state viaYPFB It addressed the imbalance caused by the 18 per cent tax on newdiscoveries increasing Boliviarsquos take to 50 per cent on all wells new or oldIt re-established YPFB as the state authority responsible for hydrocarbonsproduction returned areas reserved for development to the agency and setabout restoring its ability to produce and distribute hydrocarbons In additionBolivia renegotiated the contract price of natural gas with Brazil and Argentinacloser to market rates

As a result government revenues nearly tripled overnight injecting a senseof national euphoria that Bolivia had recovered what rightfully belonged tothe nation Ironically this change benefited the regional governments inopposition to MASMorales more than any other group The financial wind-fall however did little to calm tensions between these eastern regions and thecentral government Instead it led to increasingly acrimonious conflict Ham-strung by an agreement that left few resources for the central government andhis projects Morales announced his intention to alter the percentages con-tained in the Hydrocarbons Law 3058 and to claw back resources for thenational treasury Almost immediately regional governments respondedwith threats of revolt and a lsquocatastrophic stand-off rsquo ensued (Garciacutea Linera2008) The four regional governments receiving the highest royalty and taxtransfers (Santa Cruz Tarija Beni and Pando) mobilized their bases set aboutwriting charters for autonomy and organized departmental referenda to adoptthem Once again distributional fights seemed to threaten the countryrsquosinternal cohesion

In the end confrontation was averted when the central government left taxtransfers to regional governments mostly intact and instead focused on redir-ecting revenue linked to the increased production of gas to municipal govern-ments50 The combination of increased production and higher prices swelleddepartmental and municipal government coffers and there was no shortageof central government largesse to be used to garner support for its positionsThe MASMorales government has been able to consolidate political powerthrough a mix of bold political tactics and hydrocarbon revenues Since the



101

passage of a new constitution in 2009 and the re-election of Evo Morales in2010 regional political elites have largely been subdued and redistributivefights have been resolved

43 Summary

Hydrocarbons have been pivotal to the nature and constitution of nationalpolitical settlements over the last century in Bolivia as well as to the politicalnegotiations between central and subnational elites Indeed the period dis-cussed here is bookended by two phenomena reflecting the great significanceof oil and gas Whether or not the Chaco War was actually catalysed byStandard Oilrsquos machinations to secure access to oil the war is imagined to avery great extent through ideas fuerza about oil The war is viewed as symp-tomatic of the need for Bolivia to secure its hydrocarbon resources and protectthem from foreign capture Moreover the loss of thousands of highland livesin the war is the critical point of reference for arguing that oil wealth isnational property not subnational In the contemporary moment hydrocar-bons are at the centre of theMASMorales political project providing the fiscalresources for national programmes of redistributive social investment Atthe same time struggles over hydrocarbon revenues have been at the core oftensions between a highlands-dominated central government and the sub-national elites of Santa Cruz Tarija and Chuquisaca

The governance of hydrocarbons has changed repeatedly over this periodfrom private to state control on three separate occasions This has reflected theshifting national political settlement and the rise and demise of resourcenationalist ideas about oil and gas This general instability has meant thathydrocarbons and development have been only poorly coupled at a nationallevelmdashindeed the only success in strategically converting hydrocarbon rev-enue into development had until the latter 2000s been at a subnational scaleprimarily in the department of Santa Cruz This pattern shifted however withthe consolidation of the MASMorales political settlement under whichhydrocarbon revenues have been increasingly secured by the centre andthen deliberately used to finance social inclusion through a range of socialprotection measures The success of these transfer programmes has in turnhelped to further stabilize the settlement through the vertical incorporation oflower-level factions into the settlement

Given that hydrocarbons have been a constant since the 1920s it is clearlynot the case that oil can be said to have any necessary relation to the nature ofthe political settlement The nature of the political settlement does howeveraffect how oil is governed and used As the settlement has increasingly becomeone of a dominant partydominant leader coupled with some significant



102

checks and balances on power hydrocarbons have become more obviouslydevelopmental

5 Conclusions Resource Governance Region andPolitical Settlements in the Longue Dureacutee

By establishing and discussing five key periods of Boliviarsquos modern historythis chapter has attempted to understand how political settlements amongelites have affected and been affected by natural resource governance in thecountry In this concluding section we focus on the following (1) the pat-terns that recur across these periods in particular those that relate to thecentrality of nationalndashsubnational relations within Boliviarsquos political settle-ments (2) the centrality of ideas about and the materiality of naturalresources for the nature of these settlements and (3) the implications of thisanalysis for political settlements theory

51 Historical Continuities and Subnational Dynamics

While the constitution of political settlements in Bolivia has shifted over thelast 120 years with corresponding shifts in their implications for inclusivityand exclusivity certain themes have been recurrent The first is the import-ance of subnational elites and politics to the ways in which a national settle-ment is fashioned and the consequent instability of any such settlementSecond is the increasing importance of the east of Bolivia to the constitutionof settlements given the concentration there of powerful agrarian agro-industrial and hydrocarbon elites who have been included factions orexcluded actors with significant ability to exercise power over or within thedominant settlement Third is the use of natural resources and above all therents deriving from these in any strategy to build national settlements aroundthe exchange of loyalties and patronage Fourth is the ebb and flow betweenemployment redistribution and direct control of natural resources as theprimary mechanisms of socio-economic inclusion and the tendency forinclusion-through-employment and resource control to produce subalternactors with significant lsquoholding powerrsquo who have been able to exercise influ-ence over national settlements These four themes intersect substantially witheach other and will be present throughout our discussion in the remainder ofthe chapter

The role of subnational elites in Boliviarsquos settlements their ability to under-mine national settlements and the relationship between this ability and thepresence of natural resource endowments within their territories is strikingThere has been a constant tension between projects to create a unitary state



103

and demands for more decentralized forms of government This goes back tothe very beginning of our period of interest when inter-elite debates over thelevying of taxes and public expenditure reflected the preference for a unitarystate over a federalist arrangement with poorer departments constantlyclamouring for more resources from central government Historian RossanaBarragaacuten notes that the strengthening of the central government and thedepartments happened simultaneously based on the raising and sharing ofrevenues beginning in the late nineteenth century lsquowe see the fragility of thecentral state and how it had to fight to impose itself over economic sectors andgroups through endless disputesrsquo (Barragaacuten 2008 84)51 From the late nine-teenth century onwards mining revenues from the departments of PotosiacuteOruro and La Paz subsidized poorer departments that lacked the capacity toraise revenue through taxes Mining revenue was also the source of fundingfor financing transportation infrastructure investments (mostly railways butalso roads) to support the growth of the regions and their articulation tomarkets (Orihuela and Thorp 2012)

Once hydrocarbons came on the scene a different tax and redistributionmodel slowly came into being strengthening the hand of eastern subnationalelites Beginning in the 1920s with the production of oil in the easterndepartments of Santa Cruz and Tarija oil revenues (from royalties) wereassigned to poorer regions (Pando Beni) to support their growth and consoli-dation However unlike with hard-rock minerals royalties from oil (and laternatural gas) also went to departmental government coffers allowing produ-cing departments to grow and develop52

These arguments between subnational elites and national elites have longhistories Some of this history is related to the traditional strength of depart-mental prefects who in the past were in charge of education agricultureindustry and commerce who supervised the treasury and customs officesand who recruited clothed and fed troops Barragaacuten notes that the historicalpower of this institution

explains how every revolution or change in government arose from agreementsand pacts between departmental leaders whether prefects or those who aspired tothe position and why every government established itself on the basis of the samestrategic geography ndash in essence a network between capital cities and the mainurban centres of each department (2008 91)

The importance of these subnational elites in the state-building project hasalso given them power and indeed relations between departmental treasuriesand the central state were always problematic There were constant disputesover which income streams were national and which were departmental aswell as over what and whom would be taxed Thus central state and depart-mental relations were characterized by both mutual need and constant



104

feuding in which departmental authorities were seen as more powerfulcohesive actors negotiating with a weaker central state This pattern clearlypersists into the contemporary period and has been one of the critical factorsaffecting natural resource governance That said beginning in 2009 withthe passage of the new constitution and the referendum reaffirming theMASMorales government we see a significant consolidation of politicalpower Regional elites that were once avowed enemies of MASMorales joinedthe ranks of MAS either by running as candidates in local regional andnational elections or through appointments to the public bureaucracy

52 Natural Resources and the Constitution of Political Settlements

The question we should be asking ourselves is not lsquowhy is it that ourgreatest wealth was lostrsquo but rather lsquohow do we save ourselves from ournatural wealthrsquo

(Fernando Molina 2011)

An enduring set of ideas around the reasons for Boliviarsquos underdevelopmentcentres on the oligarchies hypothesis in which Boliviarsquos economic and polit-ical elites are seen as a tightly hegemonic group Acemoglu and Robinson(2012) among others challenge this view of elites as a homogenous groupoffering a more nuanced approach that views inter-elite disputes and bargain-ing as critical to explaining development trajectories Through a close exam-ination of the evolution of the mining and hydrocarbons sectors the shiftingcomposition of political settlements and the persistent tensions betweennational and regional elites over the distribution of revenues we find a storythat does not support the oligarchiesrsquo hypothesis

Different regimes under different settlements would forge alliances withurban-based regional elites hoping to reduce the chronic instability thatcharacterized Bolivian political life Indeed even in the present day theMASMorales regime has constructed a careful coalition of Andean-basedregional support to counteract the political and economic power of the easterndepartments Subnational agreements appear to be an important part of thestorymdashwith the department of Santa Cruz perhaps the best example of a long-standing subnational political settlement In the most recent settlementperiod subaltern actors have significantly increased their holding power orbecome part of a dominant coalition at both the subnational and nationallevels More generally subnational actorsmdashboth departmental andmunicipalmdashhave played important roles in constituting and contesting settle-ments over the course of the last century53

By the second half of the last century the emergence of a dynamic oil andgas sector in the east of the country eclipsed the mining sector and ultimately



105

the long-standing power of elites linked to mining in the west This transitionpicked up speed with the dramatic collapse of tin markets in the 1980scoupled with a debt crisis and years of mismanagement from military rulefollowed by the introduction of neoliberal reforms But the blueprint for thistransition was set in motion decades earlier through the little-known US-sponsored Bohan Plan which concluded that Boliviarsquos future lay to its eastIndeed the receipts from oil and gas development have surpassed the collect-ive imagination Vice-President Garciacutea Linera has described natural gas as lsquothegoose that lays the golden eggrsquomdashthe source of funds that will seed Boliviarsquosdevelopment in the twenty-first century (Garciacutea Linera nd 11) The central-ity of gas came quickly though it will produce long-lasting impacts on theorganization of economic political and social life In departments like Tarijawhere some 80 per cent of all natural gas is produced and a nearly equalpercentage of the countryrsquos gas reserves are located gas revenues contributeover 95 per cent of the budget Even in the department of Santa Cruz whoseeconomy is more diversified by the presence of a strong agro-industrial sectoroil and gas revenues still dominate the budget

At the national level oil and gas revenues are vital to the MASMoraleslsquoProcess of Changersquo the wide-reaching project to refound Bolivia Gas and oilrents are the currency by which social inclusion is delivered and efforts atnascent industrial transformation are initiated as well as the means by whichpatronage is extended and loyalties are consolidated The ambiguity andflexibility of the MASMorales process of change allows for new alliances tobe created according to fluctuating needs and distinct political contexts Inthis way political enemies of MAS can be incorporated into the bureaucracythrough peguismo (the creation of posts) or added to political rosters withrelative ease Such flexibility allowed Morales to cement an agreement withand gain the loyalty of conservative subregional elites in the Chaco inexchange for their being granted direct receipt of royalty payments This inturn allowed him to suppress the political power of urban-based regionalelites in the city of Tarija by placing a gas-funded wedge between them andthese subregional elites Peguismo inside YPFB and the central governmenthas continued to flourish despite Moralesrsquos insistence that MAS adherentsshould not expect to benefit from employment arrangements in exchangefor party loyalty The first director of YPFB Santos Ramiacuterez a former closeconfidant of Morales who is now in prison for corruption charges wasknown for hiring party-based technicians who knew nothing about hydro-carbons54 In a different sort of redistributive fight as YPFB was beingreconstituted the government was forced to divide the state-owned com-pany into a series of vice-presidencies so that each producing department(Tarija Santa Cruz Chuquisaca and Cochabamba) would host an office inaddition to La Paz



106

Generally hydrocarbon rents have been used to foster inclusion throughredistributive spending Up to the mid-1950s rents were fairly modest and sodid not draw much attention or give rise to major social mobilization How-ever the political significance of rents changed as the scale of production grewand royalty and tax payments increased The Hydrocarbons Law 3058 estab-lished the parameters for the central government to distribute hydrocarbontaxes to regional and municipal governments (as well as to universities thepolice and a special development fund for indigenous groups) Withinregions the distribution of rent-funded expenditure has also become centralto political dynamics

MAS andMorales have also used the distribution of oil and gas rents to shapethe settlement in newways Until recently rent distribution usually took placein one of two ways by territory or by sector With the introduction of socialprogrammes55 targeted at individuals a new dynamic has been introducedThrough such transfers new entitlements (and relationships) between thecentral government and citizens are formed that in turn have long-term impli-cations for Boliviarsquos future economic development path In the near-to-medium term the government must produce more hydrocarbons in order topay for these programmes and indeed the government uses this argument as away to validate its preferential treatment of the hydrocarbons industry Thisstands in some tension with the governmentrsquos other need to invest in theindustrialization of minerals oil and gas as well as in other sectors of theeconomy in order to move beyond the extractionndashexport model

In the case of the mining sector which historically provided opportunitiesfor participation either through labour (as a mine worker) or to a lesserextent through direct control of the means of production (a mine owner)the government increasingly appears to privilege the mining cooperativesMining cooperatives resolve employment issues for many more rural familiesin the highlands (an important segment of MASrsquo political base) than dolarge-scale minesmdasheven if such a resolution is only partial and such miningis usually combined with other livelihood activities More importantly thenew mining law allows rural families the possibility of controlling the meansof production (or to do so at least jointly with the state) as ameans of receivinggreater benefits However larger-scale investment in exploration cannot bepursued under conditions characterized by uncertainty and social conflictmdashtwo significant problems affecting mining areas today partly as a conse-quence of the increased strength of cooperatives Furthermore the impositionof cooperative mining in some agro-pastoral communities constrains thepossibilities for pursuing other productive (and less environmentally dam-aging) economic activities In the most recent political settlement we seeincreasing social conflict over the negative impacts of uncontrolled miningactivity and the inability of the government to address long-standing sites of



107

environmental contamination raising the question as to the role that envir-onment and contamination will play in a new settlement

Natural resources have long been at the centre of Bolivian political economyand political bargaining Not since colonial times however have they been asufficient basis of power for any one settlement to become consolidated to thepoint that it could begin to view these resources as part of a medium- to long-term developmental project and manage those resources accordingly Thecombined effect of changes in global markets (both in terms of prices andshifting patterns of demand) the distinct regional geographies of differentresources within Bolivia and the countryrsquos substantial and often powerfulsubaltern populations have meant that efforts to build alliances between thecentre and regions across regions and across classes have never succeeded forlong As a consequence the incentive for elites has consistently been tocontrol revenue streams from resources in order to spend on managing polit-ical alliances rather than to invest in economic and social development

53 Implications for Theory

The case of Bolivia also suggests that relative lsquosettlementrsquo in political relation-ships may be more the exception than the norm Certainly the last 120 yearsin the country have been characterized by great instability deriving largelyfrom the inability of elites to act collectively across spatial and social differ-ences and agree on models of development that offer broad inclusion inbenefits and opportunities The relative exceptions to this instability havebeen the periods of liberal rule in the 1900s and 1920s the decade or so ofMNR rule from 1952 to 1964 and the period of MAS hegemony since 2005One might argue that the period from 1985 to 2003 was also characterized bysustained elite agreement that Bolivian political economy should be governedthrough electoral democracy and neoliberal modes of management

Interestingly these more settled periods of relative party dominance havealso been characterized by significant policy roll-out policies that supportedthe rapid growth of the tin economy in the liberal period and socio-economicreform policies that dramatically changed forms of natural resource govern-ance and benefit distribution in both the MNR and MAS periods While thispattern is consistent with the claim that periods of dominant party rule can beassociated with more transformational and developmental policies the verysignificant exception is the institutionalization of neoliberal governmentbetween 1985 and 2003 which occurred under conditions of competitiveclientelism This suggests that analytical distinctions regarding the develop-mental implications of competitive clientelism and dominant party rule needto be made with care One implication perhaps is that regardless of thedomestic mode of rule transnational pressures from financial and commodity



108

markets rolled out through networks of technocrats and traders can discip-line settlements regardless of their form and can determine the models ofdevelopment that flow from these settlements This disciplining effect can bejust as strong as any disciplining coming from excluded factions and certainlyhelps explain why neoliberal commitments became taken for granted amongpolitical and economic elites after 1985 Furthermore in Bolivia this externaldisciplining has come not only from historical imperial powers (the US) butalso countries such as Brazil and Argentina as they seek to consolidate theirregional authority

This does not imply that the emphasis of political settlements literature onbargains among elites the influence of excluded and lower-level factions anddomestic political drivers is not relevant These factors are clearly important inunderstanding how natural resources have been governed over the longuedureacutee in Bolivia Pressure from excluded labour in the 1930s and 1940sexcluded social movement constituencies during the 1980s and 1990s andexcluded eastern lowland elites under MAS rule have all ultimately shiftedprevailing bargains and driven important and in some cases profoundchanges in mining and hydrocarbon governance In some instances theholding power of excluded groups has ultimately driven reversals in theoverall political settlementmdashas reflected in the emergence and coming-to-power of both the MNR and MAS

The Bolivian experience suggests elements of a framework for explainingthe emergence of actors with the political power necessary to shift settle-ments In broad terms actors who have challenged settlements have emergedeither on the basis of geographically dependent subnational power or changesin economic organization Examples of the first include eastern lowland elites(powered by economic resources and a sense of regional identities) and high-land elites linked to the particular geographies of mining (this is the case asmuch for tin miners in the 1900s as for the mining cooperatives today) Socialmovements defined by territorial identifiers also fall into this category andhave become more powerful either because they have been threatened byparticular economic activities or because other actors (perhaps especiallytransnational activists) have given greater cultural and political value totheir geographical origins (eg by recognizing the value of indigenous terri-tory) In the second instance examples include the minersrsquo unions of the1940s onwards or the mining cooperative movement today Thus the emer-gence of actors with holding power can be endogenous to the prevailingpolitical economy (eg minersrsquo unions authorities receiving benefit transfersetc) also aided by transnational support

Finally both in the processes underlying the emergence of new actors andin those through which ruling elites consolidate their authority the mobil-ization of ideas (especially those related to natural resources) has been of



109

critical importance These ideas serve to catalyse collective action of both elitesand excluded groups and also to persuade others domestically and inter-nationally of the legitimacy of their claims Many of these ideas have beenderived from Boliviarsquos own historical experience such as the failure of tin tocatalyse development or the fortunes taken out of the country by inter-national mining companies in the past In addition they have been derivedfrom the countryrsquos geographies such as through the coupling of nature andnation (cf Perreault 2013) and the territorial bases of racial regional andethnic identity Other ideas have been more international in origin such asinternational labour organizing and socialist principles

Making sense of the relationships between political power and naturalresource governance in Bolivia therefore requires attention to the nature ofpolitical settlements (including their relative stability or lack thereof) theparticular history and geography of natural resource governance and therelationships among actors operating at different geographical scales

Acknowledgements

Celina Grisi Huber provided tremendous support to this chapter in collecting datacommenting on the text and correcting errors Joseacute Alejandro Peres Cajiacuteas also offeredextensive commentary and guidance

The maps in this chapter are courtesy of the Bolivian Centre for Documentation andInformation (Centro de Documentacioacuten e Informacioacuten Bolivia CEDIB) in Cochabambaand we are extremely grateful to Marco Gandarillas for allowing us to work with themaps as well as for the great work that CEDIB does in Bolivia

Endnotes

1 Such an agreement to lsquodivvy uprsquo can be an agreement to distribute control ofresources and benefits simultaneously or to allow parties to the bargain to taketurns in controlling these benefits (eg with different parts of the elite coming topower at different times through some form of electoral process)

2 As of January 2016 the government signed a contract with SINOSTEEL Equipmentto proceed with the extractive project

3 Considered part of the Sub-Andean belt of hydrocarbons linking the Camisea gasfields in Peru to the lowlands of La Paz Cochabamba and Beni

4 Extractivist institutions were already in place at the time of colonization as theIncans employed the lsquomitarsquo a tribute in the form of labour that conquered popula-tions had to deliver The Spanish were adept at maintaining and expanding thoseprior institutions which were useful for their purposes (Stern 1993) In Boliviaforced labour practices such as pongeaje and mitaje were not eliminated until the



110

reforms of the 1952 National Revolution Before the revolution only property-owning males with a certain income were eligible to vote

5 Acemoglu et al further argue that population density and prosperity at the time ofcolonization were important influences on the policies introduced by Europeans(2002 1236)

6 On the long-term effect of colonial institutions on the contemporary Andeaneconomy see Dell (2010)

7 The nature of such elites was not however constant across time and space andthey were only able to secure dominance by negotiating power and resources withother groups which had some degree of political capacity

8 This has of course been a frequent effect of war (Tilly 2004)9 Previously only about 10 per cent of the male population was eligible to vote in

any given election10 The Unified Confederation of Unionized Peasant Workers of Bolivia (Confedera-

cioacuten Sindical Uacutenica de Trabajadores Campesinos de Bolivia CSUTCB) was createdin 1979

11 In February 2016 Bolivians returned to vote on a proposal to allowMorales to run athird time potentially extending his presidency until 2025 The lsquoNorsquo vote won 513per cent to 487 per cent indicating a potential return to a competitive clientelistform of settlement

12 The focus of this chapter spans the late nineteenth century to the present for themining sector and the early twentieth century to the present for the hydrocarbonssector In the period immediately following independence (1825ndash41) Bolivia con-tinued to participate in global trade circuits dominated by Peruvian foreign mininginterests Later in the century the sector became dominated by Chilean and Britishcompanies which were very influential in the liberal government in particular interms of pressing for railroad construction From the late 1840s to 1880 Bolivia wasgoverned by a series of military caudillos (military strongmen) resulting in politicalviolence and lawlessness though Klein (2011) remarks that colonial social andpolitical institutions persisted into the 1880s

13 Rosca referring to an inner circle14 Following the Federal War of 1899 between liberals based in the city of La Paz and

conservatives based in the city of Sucre liberal politics prevailed in Bolivia until thecoup of 1921 The post-war settlement transferred most government functions toLa Paz but retained the unitary system and elite control over politics Reflectinglong-standing unresolved tensions between regions the issue of where to locateBoliviarsquos capital returned to national political debate during the ConstituentAssembly process of 2006ndash07

15 Undoubtedly Patintildeorsquos influence was huge buttressed by his enormous personalwealth and the success of his international businesses For an interesting take onPatintildeorsquos role during the Chaco War see Paacutegina Siete (2013)

16 Patintildeo had consolidated his global economic power by World War Imdashwell beforethe Hochschilds (who did so after the Great Depression)mdashwhile the Aramayosnever controlled such a large share of the tin economy though their economicpower dated back much further to the mid-nineteenth century



111

17 Other authors suggest that the agricultural sector also exercised significant controlover politics because it had a majority presence in parliament (Gallo 1991)

18 On long histories of indigenous and peasant resistance and struggle see Gotkowitz(2008)

19 Since independence in 1825 Bolivia lost over half of its territory through war andpoorly negotiated treaties with problematic neighboursmdashyet another reflection ofa fragmented elite and the chronic weakness of the central state

20 Fernando Molina argues that historical patterns of economic activity combinedwith geographic constraints forced Boliviarsquos regions to seek integration into globalcircuits and economic development through different axes The altiplano lookedtowards the Pacific Coastmdashthough this was complicated with the loss of access toports first to Peru and later to Chilemdashwhile the southeast looked towards Asuncioacutenand Buenos Aires and the northeast looked towards the Amazon and BrazilrsquosAtlantic Coast (2008 5)

21 In addition to expanding hydrocarbons production the Bohan Plan called forinvesting in pipelines to link oil fields (and later gas) with markets in Argentinaand northern Chile The idea of Bolivia serving as an energy hub for its largerneighbours was at the centre of the natural gas boom (and ensuing conflict)between 1995 and 2005

22 For example many of these nationalist sentiments around Boliviarsquos naturalresources continue to be echoed in the publications of the Committee for theDefense of National Patrimony Comiteacute de Defensa del Patrimonio Nacional (CODE-PANAL) among others

23 International aid was almost entirely from the United States and it is preciselyduring this period that US opinion began to influence internal politics in Bolivia

24 During much of this period Boliviarsquos neighbours were also governed by militarydictatorships in which civilian repression torture and violence were common-place However unlike its neighbours there was no organized leftist guerrillamovement in Bolivia and the level of political violence was significantly lessthan elsewhere

25 In contrast to COMIBOL and the mining sector the draconian economic measuresstrengthened the operations of the national hydrocarbons agency BolivianNational Oilfields (Yacimientos Petroliacuteferos Fiscales de Bolivia YPFB) by liberalizingthe prices charged to customers As a result the agencyrsquos contribution to thenational treasury increased from 127 per cent of total public revenue in 1983 to567 per cent in 1986 (Dunkerley 2007 152) It is at this point that the hydrocar-bons sector definitively replaces tin at the head of the national economy in terms ofshare of total public revenue and total exports

26 This conflict was triggered by government plans to build a highway that would runthrough TIPNIS a region that is designated both as indigenous territory and aprotected area It was supposed by some parties that the roadwould benefit colonist(including coca) farmers in the lowlands and would also support the expansion ofhydrocarbons within TIPNIS While positions and identities assumed around theconflict are complex in a very broad sense lowland indigenous groups tended toprotest against the road while colonists and coca producers favoured it The



112

conflict was ultimately violent and indeed became viewed as the first time that theMorales government had used police and military violence indiscriminatelyagainst the population

27 The first mining cooperative can be traced back to Potosiacute in 1929 when the PallirisKrsquoajcha Libre was organized later to be transformed into the Sociedad CooperativaKrsquoajcha Libre

28 Gonzalo Saacutenchez de Lozada served as planning minister and architect of Boliviarsquosstructural adjustment programme (with support from Jeffrey Sachs) of the PazEstenssoro government of 1985ndash89 He was later elected president (1993ndash97) andintroduced a series of sweeping reforms among them the privatization initiativesknown as capitalization He was elected again in 2002 but did not finish his termas rising social protest over economic policy the lsquotransnationalizationrsquo of Boliviarsquosnatural resources and an unpopular drug eradication policy descended intoincreasingly violent confrontations between the state and social movementsA highly contentious figure in Bolivian politics Saacutenchez de Lozada was part ofthe mining elite He was founder and owner of the Mining Company of the South(Compantildeiacutea Minera del Sur COMSUR) which operated several important minesincluding the Porco Mine in Potosiacute and the Don Mario mine in the Chiquitania ofSanta Cruz See Kaup (2013) and Hindery (2013) for critical views of the economicreforms he pursued Both argue that such reforms benefited his personal financialinterests Kaup also notes that his governments strengthened the hand of privatemining interests (and the power of La Paz elites) while effectively neutralizingregional and agro-industrial elite challenges to central state authority

29 Rolando Jordan (2012) refers to the mining cooperatives as an lsquountouchable polit-ical and social powerrsquo and links their emergence to relocalizacioacuten and the politics ofaccommodation pursued under Saacutenchez de Lozada

30 Interview with a former Minister of Mining August 201431 On 5ndash6 October 2006 a bloody conflict between two rival groups of miners

exploded any perception of stability in the mining sector under the Moralesgovernment Some 4000 mine workers linked to mining cooperatives came toblows with some 800 state mine workers (FSTMB) over control of the richer veinsof Pokasoni Hill COMIBOL began operating the mine after a private firm wasforced to return the concession to the Bolivian state A former cooperative Huanunimine worker himself Waacutelter Villaruel Moralesrsquos first minister of mining sup-ported the position of the cooperatives Failing to negotiate an agreement withCOMIBOL the minister called on the cooperatives to take over the mine Sixteenminers were killed and dozens more injured The government intervened in favourof COMIBOL by nationalizing the mine incorporating cooperative miners intoCOMIBOL and abolishing cooperative mining However the move did little tostrengthen COMIBOL or the unionized mine workers Since then cooperativeminers have continued to either threatenmdashor have indeed carried outmdashinvasionsof mines forcing COMIBOL to grant them areas to work (see Espinoza Morales2010 Stein 2010)

32 In July 2014 a spill involving a cooperative-owned mine in Potosiacute sent thousandsof gallons of toxic chemicals into a nearby stream and eventually into the



113

Pilcomayo River An interview with the then mining minister indicated that henoted that government supervision of cooperative mining operations was nil

33 Cerro Rico or lsquoRich Hillrsquo is a large cone-shapedmountain in Potosiacute that towers overthe surrounding landscape Discovered by the Spanish in 1545 the mine led to thefounding of the city of Potosiacute also known as the Villa Imperial (Imperial City) at itsfoot It was the first colonial city of the Americas and quickly grew to surpass by theearly 1600s the populations of London and Paris (Brown 2012 46) Nearly 500years later Cerro Rico remains an important source of employment for the largelyindigenous cooperative miners and workers who labour alongside private invest-ment and the state mining agency

34 In some cases such as the Colquiri mine the governmentmoved to nationalize themine and then proposed joint exploration between COMIBOL and cooperatives

35 Interview with Vice-Minister of Mining 201336 In August 2016 cooperative miners protested the governmentrsquos efforts to regain

control over concessions obtained by cooperatives to work in partnership withthird parties mostly ANMM mines leading to the death of Vice-Minister RodolfoIllanes and the delegitimation of cooperative mining leaders

37 The concept of lsquoholding powerrsquo for Khan refers to lsquohow long a particular organiza-tion can hold out in actual or potential conflicts with other organizations or thestatersquo and is lsquoa function of a number of characteristics of an organization includingits economic capability to sustain itself during conflicts its capability to mobilizesupporters to be able to absorb costs and its ability to mobilize prevalent ideologiesand symbols of legitimacy to consolidate its mobilization and keep its memberscommittedrsquo (Khan 2010 20 cited in Hickey et al 2015 47ndash8)

38 The government has three very popular cash transfer programmes providing aminimum pension for the elderly (Renta Dignidad) a stipend for pregnant andlactating mothers (Bono Juana Azurduy) and a stipend for school-aged children(Bono Jacinto Pinto)

39 Historians generally agree that the Chaco War was not over oil (Klein 2011) andthat tensions within the Bolivian elite were key factors in the decision to go to warwith Paraguay

40 According to an interview with a former supervisor of hydrocarbons in Tarija41 These ideas were very much invoked during conflicts between Santa Cruz Tarija

and the central government in 200842 Though large-scale exports to Brazil begin only around 200043 Interview with a former supervisor of hydrocarbons department of Tarija The

term loosely translated would be lsquoclean the slate and begin again from scratchrsquo44 The government allocated 20 per cent of state revenues to themunicipalities based

on population45 Indeed he blocked them A draft decentralization law crafted by representatives

from a range of social and political groups in 1993 was ignored by Saacutenchez deLozada Previous efforts during the Paz Estenssoro government of 1985ndash89 wereblocked for the same reason

46 Subsequent governments of Carlos Mesa and Evo Morales pursued a similarstrategy



114

47 See Garciacutea Linera (2008) on the institutional crisis brought on by the resignation ofPresident Saacutenchez de Lozada and the breakdown of the neoliberal project

48 Reflecting the complicated nature of expanding political participation and to avoidany issue of constitutionality President Mesa said that he would then lsquoratifyrsquo thewinner of the election by appointing them to the position (Roca 2008)

49 See Molina (2011)50 Despite this it is important to note that Vice-President Garciacutea Linera has indicated

that the government will try again in the future to reform the Hydrocarbons Law3058 of 2005

51 It is important to note that from post-independence (1825ndash80) up to the tinmining boom in the late nineteenth century some 35 per cent of the revenuesmanaged by the Bolivian government came from taxes paid by indigenous peopleswith La Paz Oruro and Potosiacute being the largest contributors After the 1880s taxesfrom the mining sector increased significantly and the state began to live frommining revenues (Barragaacuten 2008 90)

52 The creation of the departmental royalty (11 per cent of production from thedepartment) comes from the initial negotiation between the Bolivian governmentand Standard Oil of New Jersey in the early 1920s

53 In some cases such municipal actors have themselves been produced in part bydecentralization policies (Faguet 2012)

54 Interview with former YPFB official 201355 Juancito Pinto Juana Azurduy and Renta Dignidad are the primary examples of such

programmes See n 38 for further explanation of these programmes



115

4

The Politics of Natural ResourceExtraction in Zambia

Copper extractionhas dominated Zambiarsquos economic and political developmentsince the first European exploration of the region in the late 1880s under theBritish South Africa Company (BSAC) A classic example of a mineral-rich coun-try Zambia has always counted on its vast copper reserves to carry it to the statusof a fully industrialized and lsquomodernrsquo state Yet though copper accounts for over75per cent of its current (2015) exports the country has high poverty rates and isalso one of the most unequal1 Despite recurrent rallying cries for economicdiversification in support of the latent agricultural sector Zambiarsquos rural areashave remainedmarginal to its development

Three key historical themes help to explain why Zambiarsquos copper endow-ment has not resulted in better economic development outcomes First asFraser and Larmer (2011) note Zambia has been particularly unfortunatewhen it comes to the timing of mining policies For example just two yearsafter the country nationalized mining operations copper prices droppedprecipitously due to the 1976 global economic crisis Yet shortly after thecountry reprivatized operations in the late 1990smdashwhen copper prices were attheir lowest and generated little revenuemdasha boom in prices ensued thatyielded windfall profits to private firms Second though the national govern-ment in Lusaka located more than 300 kilometres from the Copperbelt isformally charged with the redistribution of national wealth the Copperbelthistorically produces and dominates the political sphere that determines howthis is done

Third Zambia lacks indigenous entrepreneurship and the state is central toclass formationWithnofeasiblealternative incomesources suchas secondaryindustriesorarobustagricultural sector (SuttonandLangmead2013) state-ledenterprise has remained the most important source for potential incomemobility from independence in 1964 to thepresent (Szeftel 1982) Yet becausegovernmentrevenuedependsonfluctuatingcopperprices campaignpromises


and public expectations for wealth accumulation were never fully met lead-ing to disenchantment with political parties As a result except for tradeunions which now represent only a small group of formal workers constitu-ents remain distant from the political parties that drive national policiesthus ensuring a continued marginalization and under-representation of themost vulnerable sectors of society

In this chapter we will analyse how and why these dynamics have emergedin Zambia through the lens of the political settlements framework Thisframework operates on the premise that underlying conditions for develop-ment are established first and foremost by the character of inter-elite rela-tions and especially the ways in which elites use the power at their disposalto shape policy reforms and institutional changes (North et al 2009 Khan2010 Hickey 2013) This breaks with a more singular and apolitical focuson the role of institutions which was a dominant theme in developmenttheory in the 1990s

In particular we use a political settlements approach to explore the dynam-ics of the governance of natural resources and their ability or inability to bringsustainable and substantial development to a countryWe do so by comparingand contrasting historical periods of high and low social and economicinvestments in Zambia In addition we investigate the consequence of polit-ical settlements on mineral income by examining Zambiarsquos mining taxationpolicies a process that is highly influenced by international actors We oper-ate under the assumption that an inclusiveexclusive distribution model ofZambiarsquos mineral wealth requires a closer understanding of its political leadersrsquointeraction with its constituents and social base

Using the vocabulary of political settlements theory we argue that Zambiamostly resembles a meta-settlement which is founded on a long lineage ofthe power of foreign influence in shaping economic and social policies Whatwe propose is the equivalent of what historians refer to as the lsquolongue dureacuteersquoa long-term historical assemblage that can show signs of slowly evolvingstructures and incremental changes This analysis is tied to what Bayart hascalled lsquoextraversionrsquo a way of understanding long-term historical patterns bywhich lsquothe [African] continent has been inserted into the rest of the worldrsquoand how this became lsquoa resource for internal politics of power and authorityrsquo(Englund 2002 19)

We proceed as follows In Section 1 we describe our conceptual frameworkfor understanding natural resource governance in Zambia In Section 2 wegive a history of natural resource extraction in the country In Section 3we analyse the history of political settlements in Zambia including by iden-tifying specific periods of political settlements beginning with occupation byBSAC in 1896 Finally we offer a summary of our conclusions in Section 4Our argument is based on a combination of literature review analysis of press


Politics of Resource Extraction in Zambia

117

and other grey material discussion workshops and above all a series ofinterviews in Zambia These interviews were conducted with people fromthe following categories former ministers of mines and lands former politicaladvisors to presidents the Office of the Vice-President business people (localand international) corporate lawyers directors of mining companies civilsociety leaders diplomats politicians and academics Given the sensitivenature and the political context during which the work was conducted wehave kept all interviewees anonymous

1 Conceptual Framework

The existing literature on the political economy of copper in Zambia has givenus insufficient insight into the historical relationship between mining gov-ernance resource allocation and development outcomes In this chapterwe apply the political settlements framework in an attempt to address thegap in our understanding of the history of the political incentives and systemsthat inform this relationship Political settlements have been defined aslsquoan interdependent combination of a structure of power and institutions atthe level of a society that is mutually ldquocompatiblerdquo and ldquosustainablerdquo in termsof economic and political viabilityrsquo (Khan 2010 20) or more simply as lsquothebalance or distribution of power between contending social groups andclasses on which any state is basedrsquo (di John and Putzel 2009 4) As discussedin Chapter 1 at the core of this concept is the claim that developmentoutcomes are shaped largely by the character of inter-elite power relationsespecially the ways in which elites use the power at their disposal to shapepolicy reforms and institutional changes and how these in turn shape thevaried socio-economic entitlements of different actors Specificallywith regardto countries that are rich in natural resources Khan (2010) argues that theability to create an open economy and prevent it from being strangled bythe special interests of rent-seekers is bound up with the transformation ofthe economy from a natural resource-based enclave into diversified export-based activity and especially export-based industrialization This emphasis onthe role of exporters in moving the economy forward demonstrates a shift inthe role of capital and elites away from thepowerbrokers of thenatural resourceenclave to amore competitive system both economically andpolitically (Eifertet al 2003 quoted in Mosley 2014)

The transition from low- and middle-income status towards high-incomestatus is primarily propelled by the interplay between the polity and theeconomy (North et al 2007) Governance institutions and in particularcompetitive political parties create the environment for economic develop-ment As North et al (2007 21) state lsquoPolitical competition in the presence of



118

open access to organizations provides opposition political parties with incen-tives to monitor the government and oppose proposals that threaten openaccess and competitionrsquo Increased political competition could then arguablymake a difference in response to the overall dilemma of mineral wealth anddevelopment since ruling elites must gain legitimacy to maintain powerHowever North cautions that this is a long-term process and development isnot automatic

This emphasis on political competition as a prerequisite for economicgrowth is in some ways paradoxical Throughout the developing world thelsquowave of democratization has also served to highlight the blight of povertyrsquo(Mkandawire 2006 9) and we can now add inequality to this Strong eco-nomic policies are not immediately born out of democracy Indeed in certaincontexts democracy can take a fruitless form In the case of Zambia the shiftfrom a one-party state to a multiparty democracy was in fact coupled withmassive economic reform that only further enhanced unemployment andinequality as well as a decline of important countervailing powers like thetrades unions This points to the fact that in order to avoid making easyassumptions about developmental dynamics we need to improve our under-standing of the underlying forces that determine inclusive developmentwithin a specific context and tradition We therefore subscribe to the ideathat lsquoany effort to understand the governance of extraction and of its relation-ships to development must be spatially and historically explicitrsquo (Bebbington2013b 2) By taking this approach we move away from a crude resource curseanalysis and give space to a detailed description of the forces and interests thathave shaped Zambiarsquos trajectory

2 A History of Natural Resource Extraction in Zambia

Beginning with mineral exploration by BSAC in the late nineteenth centuryand continuing to the present day copper extraction has dictated not only theeconomic history of Zambia but its political and social histories as wellFounded by Cecil Rhodes the BSAC sought to develop the mining industrythroughout Southern Africa In return for effectively occupying North-Western Rhodesia and North-Eastern Rhodesia and developing infrastructureto support the mining industry the BSAC was granted the first mining con-cession at Broken Hill (now Kabwe the capital of Zambiarsquos Central Province)The two protectorates were combined in 1911 continuing to be administeredby the BSAC as a crown colony until 1924 when administrative control wastaken over fully by the British government

Zambiarsquos copper deposits could not be exploited commercially until theSouthern Rhodesian railway had extended across the Zambezi and continued



119

northward to reach the BelgianndashCongo border which it did in 1909 By thattime mining had started in Katanga in southern Congo In Northern Rho-desia the surface ores were of poorer quality and copper was only workedintermittently at BwanaMkubwa until in 1924 rich copper sulphide ores werediscovered As a result of Northern Rhodesiarsquos preference for large-scale dealswith major commercial mining companies throughout the colonial era andinto the early 1970s all mines in Zambia were owned by two mining com-panies the Anglo-American Corporation (AAC) owned by the Oppenheimerfamily in South Africa and the American Roan Selection Trust (RST) chairedby Sir Ronald Prain a British businessman

While copper was dominant in Zambia from early in its colonial historyRoberts (2011) notes the mining industry only began to prosper in 1949 as aconsequence of the devaluation of the pound sterling against the US dollarBecause the British government based the price it paid for Northern Rhodesiancopper on the dollar revenues from sales increased due to the shift Anotherimportant element was the outbreak of the KoreanWar in 1950 which led to afresh demand for copper Rising demand and prices meant that by 1951 allfour copper mines were paying dividends for the first time It is thus clear thatglobal economic trends have had a crucial impact on the Zambian industry(see also Figure 41)

Administration in Zambia underwent a massive shift in 1953 with thecreation of the Central African Federation (CAF) The CAF brought togetherthe colonies of Northern and Southern Rhodesia (present Zimbabwe) andNyasaland (present Malawi) into a centralized administrative structurerun from Salisbury which became a mini-metropole serving as the seat ofgovernment and industry The CAF privileged white settlers and thosein Southern Rhodesia in particular Northern Rhodesia was seen solely as anextractive state particularly in terms of minerals as well as agriculture

For the first several years after the creation of the CAF mineral prices roseand Southern Rhodesians prospered from the northrsquos extraction Howeverprices fell in the late 1950s coinciding with agitations for political independ-ence from Northern Rhodesia The CAF was dissolved in 1962 and shortlythereafter on 24 October 1964 Zambia was granted its independence

Expectations of a higher standard of living for all Zambians were high in thisnew period of independence known as the First Republic In the context of astable and expanding economy enormous investments were made in educa-tion health and infrastructure as the governing United National Independ-ence Party (UNIP) under the leadership of President Kenneth Kaunda hadenvisioned and promised to deliver a development state Copper at independ-ence represented half of Zambian GDP and almost the entirety (96 per cent) ofexports for the country Yet despite high global prices the copper wealth didnot translate into countrywide development Infrastructure urban growth



120

education health care and other indices of development were mostly appar-ent along the so-called lsquoLine of Railrsquo which included the Copperbelt (NdolaKitwe etc) Lusaka and at a smaller level development in the southern part(Livingstone) where there were a large number of white settler and indigen-ous agricultural enterprises Map 41 shows the location of these sites as wellas others referred to throughout this chapter

The emphasis in the early post-colonial years was on the lsquoZambianizationrsquo ofthe workforce or the steady replacement of British and other expatriates in thepublic and private labour force with indigenous Zambians The emergence ofthe lsquoSecond Republicrsquo in Zambia in the early 1970s broughtmany changes thataffected the structure of the extractive state In December 1972 Kaunda signedthe declaration of the one-party state the climax of a process of the consoli-dation of power that began with the nationalization of major industriesbeginning in 1968 It was partially driven by an external force namely theUnilateral Declaration of Independence (UDI) in Rhodesia in 1965 whichturned Zambia into a frontline state and put pressure on it to forego theinfluence of white settler capital Zambiarsquos colonial history as a member ofthe CAF left a legacy of economic dependence on its southern neighbour At thetime of UDI Zambia was still almost entirely reliant on shared infrastructureparticularly the lsquoLine of Railrsquo controlled by Rhodesia Railways Zambian copperexports were exported via this line and almost all imports were brought in onit as well Yet despite this economic dependency a direct lineage of the CAFthe UK placed great pressure on Zambia to participate in sanctions againstRhodesia The pressure carried out through the United Nations was so greatthat Zambia threatened to leave the Commonwealth and began to turn toalternative development partners to achieve economic independence

Internally nationalization was driven by pressure from certain sectors ofsociety (labour unions party cadres nationalist leaders civil servants) thatdemanded greater material rewards from political independence than thosethey perceived were being handed to them by private capital Leading up tothis shift the existing political settlement with the state and erstwhile miningcompaniesmdashin existence from early colonial daysmdashgradually broke downThe Matero Economic Reforms of 1969 resulted in the government purchas-ing 51 per cent shares from the AAC and RST leading to partial nationaliza-tion of the copper industry The AAC and RST retained 49 per cent of theshares and were renamed Nchanga Consolidated Copper Mines (NCCM) andRoan Consolidated Copper Mines (RCM) respectively They remained underforeign management Subsequently with the full-scale nationalization ofthe mines in the 1970s they were integrated into the Zambia ConsolidatedCopper Mines (ZCCM) now entirely under Zambian management

The Zambia Industrial and Mining Corporationrsquos (ZIMCO) the state hold-ing company that was charged with the supervision of the state-owned



121

AFRICA

Zambia

DEMOCRATICREPUBLIC OF CONGO

ANGOLA

Mongu LUSAKA

ZIMBABWE

International boundary

MOZAMBIQUE

Province boundaryNorth-Western ProvinceCopperbelt Province

12

0 100 kmNAMIBIA

Livingstone

Kabwe

Chipata

MALAWI

Kasama

MansaLumwana

Kansanshi

Solwezi

1 2

ChingolaChingolaKitwe

Luanshya

NdolaMufulira

Chili abombweChili abombweMwinilunga

Kalumbila

TANZANIAN

Chililabombwe

Chingola

Map 41 Mining provinces and key mine sites ZambiaSource Elaborated on the basis of maps produced by flexicadstrecom accessed September 2017

OUPCORRECTED

PROOFndashFIN

AL2152018

SPi

mining enterprises under its wing was originally structured to minimizepolitical interference in the running of state-owned businesses by servingas a buffer between the government and its investments In practice howevergovernment officials exercised increasing control over ZIMCO Managersof sub-holding companies reported directly to the relevant governmentministries which in turn reported to Kaunda who retained the title of com-pany chairman ZIMCOrsquos process of purchasing bonds in order to buy out theremainder of the foreign shares and management demonstrates how thesedynamics led to (costly) mismanagement when the bonds were redeemed in1974 they effectively wiped out Zambiarsquos foreign reserve base (Craig 1999 40)2

Thus while the government now fully controlled the mining industry someof the fundamental problems that had prompted nationalization remained orworsened The global economic crisis of the 1970s placed an enormous strainon the country as it faced rapidly falling revenues

By the late 1980s Zambiarsquos economy was in free fall leading to lost miningjobs and an acute shortage of basic goods On the heels of violent protest andan attempted coup Kaunda yielded to pressure and Zambia held multipartyelections in 1991 Frederick Chiluba the former president of the ZambiaCongress of Trade Unions (ZCTU) and leader of the Movement for Multi-Party Democracy (MMD) was installed as the President of the RepublicThough Kaunda had started the process of structural adjustment under theauspices of the International Monetary FundWorld Bank (IMFWB) in thelate 1980s it was under Chiluba that large-scale privatization actually tookplace The Mines and Minerals Act of 1995 paved the way for the dismantlingof ZCCM and the sale of individual mining companies In place of a uniformtax regime and code of conditions within which private mining companieswere to operate the act provided for the negotiation of unique DevelopmentAgreements (DAs) with each company Several state officials who wereinvolved in these closed-door negotiations have since been the subjects ofcorruption charges and some have been convicted In addition social pactslinking the state-led industries to their workers and communities were dis-banded and replaced with corporate social responsibility (CSR) programmes(Negi 2011 30)

The process of privatizing the mines proved to be a challenging exercise forthe MMD Considering depressed world copper prices the increasinglydeplorable state of the mines and the pressure on the Zambian governmentto sell the mines as part of the conditionalities attached to the debt relief bythe International Financial Institutions (IFI) buyers could strengthen theirnegotiation position Thus the state essentially lost its ability to extractrevenues from the mining sector The copper boom that followed shortlyafterwards added to a deepening sense of the lack of legitimacy of the entireprivatization process both for the Zambian state and the new mine owners



123

(Fraser and Lungu 2007) This is an important theme to which we willreturn below

3 A History of Political Settlements in Zambia

As shown in Table 41 Zambiarsquos history of economic growth and decline doesnotnecessarily followpolitical transitions but rathermirrors thefluctuations ofinternational commodity prices as reflected by the countryrsquos economic per-formance during different commodity prices conditions presented in thetable However political settlements come into play when examining thegovernance and distribution of natural resources affected by these commodityprices In this sectionwe thus drawon thehistory ofnatural resource extractionsummarized above to identify and describe five key periods of political settle-ments in modern Zambian history These periods are summarized in Table 41

31 1896ndash1924

The early period of colonial occupation under the BSAC was characterized bycorporate colonialism The colonial administration was thin on the groundwith most of Northern Rhodesiarsquos colonial boundaries only enforced as late asthe 1930s While it was not destined to become a white settler colony likeSouthern Rhodesia a small agricultural white settler community had settled inthe north that began to call for representation Colonial authorities intro-duced a household-based lsquohut taxrsquo to support administrative structures lead-ing to amigration of labourers to goldmines in Tanganyika (Tanzania) coppermines in Elizabethville (Lubumbashi) and as far afield as South Africa

32 1924ndash64

British Colonial Rule introduced in 1924 saw the opening of the first sessionof the Northern Rhodesian parliament with limited white settler representa-tion The British also introduced Indirect Rule a system in which the localchiefs became administrative agents employed by the colonial regimeThese traditional leaders participated in the hut tax collection and labourrecruitment Labour migration within Northern Rhodesia now also includedthe rapidly expanding Copperbelt a series of mining towns in the westernpart of the country that borders copper-rich Katanga (Congo) By 1930 theAfrican labour force on the Copperbelt had risen to 32000 where withthe gathering of various ethnic groups a national identity was forged and thebasis for a nationalist movement was laid Traditional authority associations



124

Table 41 Zambian political settlements 1896ndashpresent

Period Name of rulingcoalition

Type ofpolitical regime

Configuration ofpoliticalorganizations



Internationalcommodity priceperformance

Zambiarsquoseconomic growthperformance

1896ndash1924 BSAC Colonial rule Advisory council littlesettler representation

Industrial capital Hut taxlabourmigration

Favourable Positive

1924ndash64 BSAC and CAF Colonial rule Politicalrepresentation ofwhite settlers


Favourable Positive

1964ndash73 UNIP Multiparty Dominant Industrial capital Taxlabour Favourable Positive

1973ndash91 UNIP One-partystate

Vulnerableauthoritarian

State-led Nationalized industry Unfavourable Negative

1991ndashto date MMD PF Multiparty Competitiveauthoritarianism

Neoliberal capitalist withsome spells of resourcenationalism

Taxlabour UnfavourableFavourable from2001

Negative positivefrom 2001

Here we depart from Levy (2012) and use the following definition lsquocivilian regimes in which formal democratic institutions exist and are widely viewed as the primary means of gaining powerbut in which the incumbentsrsquo abuse of the state places them at a significant disadvantage vis-agrave-vis their opponents Such regimes are competitive in that opposition parties use democraticinstitutions to contest seriously for power but they are not democratic because the playing field is heavily skewed in favour of incumbents Competition is thus real but unfairrsquo

Source Levitsky and Way 2010 6

OUPCORRECTED

PROOFndashFIN

AL2152018

SPi

were present in the Copperbelt but were less influential than the rising labourand nationalist movements The main commercial economic interest repre-sented by thewhite settler community was the agricultural sectormdashspecificallysugar tobacco andmaize The first demonstration of the political weight of theCopperbelt took place in the 1930s when both African and European tradeunions went on massive strikes after the international financial crisis led towidespread job losses The strike was partially blamed on the WatchtowerChurch which had entered the urban areas with returning labour migrantsfrom South Africa

The formation of the CAF in 1953 described in detail in Section 2 repre-sented an important move towards independence It was premised on thenotion that white settlers in the region dominated by Southern Rhodesiansettlers would work towards self-rule Generally Northern Rhodesiarsquos whitesettlers (a paltry 3 per cent of the total population) opposed the federation asit worked against their economic and political interests With the ever-expanding production of copper and stabilization of the Copperbelt work-force the influence of trade unions increased The early nationalist movementbegan to form around themission-educated elite often of royal establishmentsTheir positions were soon taken over by a generation of younger men equallymission-educated but with no traditional power base Missionaries generallyfavoured the nationalist movement and as a result the churches remainedinfluential players in post-colonial Zambia

33 1964ndash73

On 31 December 1963 the Federation of Rhodesia and Nyasaland wasformally dissolved Less than a year later on 24 October 1964 NorthernRhodesia became an independent republic now known as Zambia UNIPrsquoscharismatic Kenneth Kaunda a teacher born in Zambia but from a Malawianmissionary background became its first president His main contender HarryNkumbula of the African National Congress (ANC) remained an influentialpolitical player but the settler parties almost immediately lost their erstwhileinfluence Despite enormous investments in social and physical infrastruc-ture discontent with UNIP quickly emerged due to uneven distribution andso-called lsquothwarted expectationsrsquo (Macola 2006 56) Opposition coalitionstook shape among groups with (temporary) common cause unionized work-ers (clashes with mine workers already occurred in 1965ndash66) business peoplemarginalized rural communities students and intellectuals UNIP felt espe-cially threatened by the rise of former Vice-President Simon KapwepwersquosUnited Progressive Party (UPP) which gained a stronghold in the Copperbeltand the Northern Province It also faced resistance from Barotseland whichfelt aggrieved by the abrogation shortly after independence of an agreement



126

granting them a high degree of autonomy This period also saw the rise ofthe importance of the civil service as a bargaining force After independenceit was lsquoZambianizedrsquo and increased nearly threefold by 1974 During thisperiod political office became a crucial means to acquire resources from bothpublic and private sectors

34 1973ndash91

The Second Republic associated with nationalization of the mines and thedeclaration of the one-party state represented an important shift in politicalsettlements that specifically promoted social welfare However to call Zambiaa staunchly socialist state in this period would be a misnomer Begun in aperiod of economic prosperity nationalization was a reaction to the globalshift towards government ownership for more equal economic growth seenthroughout the developing world in this period Yet for Zambia growth washampered by global economic contraction and equality was not realized

The global economic crisis of the 1970s placed tremendous strain on thegovernment as it worked to deal with rapidly falling copper prices Despite acontraction in revenue it tried to maintain a high level of support for themining industry and the mine workers continuing welfare programmes anddevelopment that were begun by privately owned companies during thecolonial period Yet by placating urban workers it further exacerbated theuneven development of the country with most of the rural areas left behind

Though opposition movements were banned both underground politicalmovements and the trade unions threatened UNIP throughout this periodYet unlike in Ghana Peru and Bolivia the military was unable to take controlof the government during this era of economic decline with UNIP success-fully resisting two coup attempts in the 1980s Unlike other countries themilitary had not been part of the liberation movement in Zambia and did notbecome an influential factor

35 1991ndashPresent

In the late 1980s a coalition comprised of trade unions politicians lawyersstudents academics and the business community came together under thebanner of the MMD to call for the dissolution of the one-party state Thiscombined with pressure from bilateral andmultilateral donors forced UNIP toopen the country to multiparty elections in 1991 International actors deep-ened their neoliberal economic engagement with the newMMD governmenttying debt relief to privatization of national companiesmdashmost notably themines Moreover the government was rewarded for privatization with massive



127

amounts of foreign aid which came to make up more than 40 per cent of thenational budget in the early 1990s

Civil society also expanded rapidly during the 1990s and became especiallyinfluential when aligned with more established non-state actors like the LawAssociation of Zambia (LAZ) or the powerful mainstream churches This periodalso saw the rise in influence of the independent media especially The Postnewspaper

Elections became gradually more competitive from 2001 onward renderingthe MMD highly vulnerable This dynamic created an incentive for short-term politically motivated public spending which arguably explains thelack of a long-term development vision for the Zambian mining sector AsPoteete (2009) argues elite commitment to such a vision is possible onlywhen ruling elites feel that they will stay in power long enough to reap thebenefits of accumulated investments

At the same time debt relief and a copper boom granted theMMD increasedfiscal space with export revenue increasing from US$670 million to US$4billion The government responded by defying the existing DAs to increasemining taxation They expanded pro-poor expenditure in the social sectorsand released huge funding for political projects such as road constructionand a Fertilizer Import Support programme These investments had a limiteddevelopmental impact especially in rural areas and the urban informal sectors

In September 2011 the Patriotic Front (PF) which had broken from theMMD in 2001 came to power on a left-leaning manifesto and with thesupport of the young informal urban populace The party ran on a platformopposed to the laissez-faire attitude and neoliberal policies of the previousregime especially vis-agrave-vis the mining sector In practice Zambia witnessed a45 per cent increase in public sector wages as well as expanded mineralroyalties and private sector wages under the PF Yet these are not solelyattributable to the party as they were conceived in the context of a numberof African Union (AU) declarations that encouraged governments to adoptfixed budgetary allocations for education and health

An interesting development is the newly introduced concept of a sovereignwealth fund in the 2015 budget signalling that the government is thinkingabout a long-term national development trajectory It also demonstratesthe influence of the Norwegian cooperation partners in the field of mineraltaxation The Norwegian embassyrsquos project aims at improving Zambiarsquos rev-enue out of the copper industry by building capacity within the ZambiaRevenue Authority in obtaining accurate information on production process-ing and export volumes in the mining sector

The contemporary period has been marked by an emerging geographicalshift in power While the Copperbelt region has historically been the home ofopposition political parties (UPP MMD PF) recent elections show that it



128

now shares that role with Lusaka which has grown tremendously in recentdecades This is partially attributable to interurban migration as a result of theeconomic crisis in the Copperbelt in the 1990s Decades of job losses relianceon casual rather than contract labour and an increase of the number ofparticipants in the informal sector have hollowed out the powers of thetrade unions Civil society and media organizations have weakened as welland have become hyper-partisan due to their co-optation by political partiesfor short-term electoral gains The liberal United Party for National Develop-ment (UPND) which was founded in 1998 and has since become the largestopposition party has an especially strong base in the non-labour migrantareas in what used to be called North-Western Rhodesia though it has alsomade inroads in Lusaka and Copperbelt

Finally political parties have witnessed a shuffling of allegiances in the wakeof the death of PF President Michael Sata while in office in October 2014Factionalism has led to a three-way split in the MMD leaving it severelyweakened One group merged with the PF to support its candidate EdgarLungu in the by-election to replace Sata and another partially merged withthe UPND Lungu and the PF won the presidential by-election in 2015 as wellas the controversial general election of 2016 which was marred by violenceand intimidation as well as accusations of widespread rigging

36 Commonalities Across the Settlements

To adequately historicize the political settlements described above we high-light here some of the more enduring characteristics that have shapedZambiarsquos political culture and civic norms These ultimately determine lead-ersrsquo conduct and interests regardless of apparent (ideological) shifts in thenumerous political transitions the country has experienced Importantly aswe will spell out in the next section these characteristics influence the naturalresource governance of the country

Two key lasting features of post-colonial Zambiarsquos political culture areauthoritarianism and a narrow elitism Macola (2008) traces this trend to theroots of Zambiarsquos nationalism in which party and nation were seen as thesame Alternative views and political projects were viewed with suspicionand regarded as unpatriotic This authoritarianism emerged through a simul-taneous concentration of power in the hands of the executive branch anda weakening of institutions of accountability including parliament and thejudiciary Despite the re-introduction of multiparty democracy Zambiarsquos rul-ing parties remain authoritarian and dominant During elections the oppos-ition parties are given no space in the public media and the ruling party usesthe (colonial) Public Order Act to limit the opportunities to campaign



129

Larmer (2006) argues that these dynamics are related to the uneven natureof Zambiarsquos nationalist struggle which led to political and economic divisionsin the post-colonial state that were never entirely ironed out by the process ofstate formation A small closely networked political elite emerged from thenationalist movement to lead the new state Yet it is important to note thatthe majority of this group had received little formal training on the eve ofindependence out of a population of 35 million people Zambia countedfewer than 100 university graduates

As a result a limited choice was offered to the electorate by Zambiarsquos post-democratization political parties contributing to a lsquorecyclingrsquo of leaders Thisin turn contributed to the pattern of splits and mergers in the history ofZambiarsquos political parties Consequently there is a consensus among ourinformants that in many respects Zambiarsquos political system has not under-gone any fundamental changes from the time of transition from a one-partystate to multiparty democracy in 1991 Instead Zambia is de facto still char-acterized by imperial or executive presidentialism This is reified through thesystemrsquos structure in which all incentives centre around the president Theweakening of trade unions and decline of civil society since the1990s meant areduction in countervailing powers

Another salient feature of Zambiarsquos political landscape is lsquoelite insecurityrsquo(Migdal 1988) in which ruling politicians are in constant fear of being oustedThese circumstances existed long before the era of competitive politics withchallenges to ruling authority including the emergence of ethno-regionalpolitical movements that defied the legitimacy of the first post-colonial gov-ernments (Fraser 2010 191 214) and led to the introduction of the one-partystate in 1972 pressure by domestic commercial interests trade unions andthe Church (1973ndash91) and growing electoral competition between the coun-tryrsquos two or three dominant parties since the return to multiparty democracy(1992 to present) As Fraser (2010 221) notes lsquojust as UNIP ruled in fear ofurban disorder the MMD governed Zambia under the shadow of a constantcrisis of physical security ideological self-confidence and political legitimacyrsquo

In some forms elite insecurity could be viewed as an important democraticaccountability measure Yet it has taken on such intensity in Zambia thatpoliticians operate myopically to the long-term detriment of the countryThe turnover of members of parliament at each election is one of the highestin Africa with the number of those remaining seated averaging only 30 percent The absence of a registered party membership combined with historicalfluid voter behaviour makes the PF insecure of the size and loyalty of its base

Simuntanyi (2015) notes that the short-term policy focus that this kind ofinsecurity generates is particularly acute under competitive clientelist settle-ments where the raison drsquoecirctre of political alliances is to win and hold ontostate power In such a system an electoral strategy based on targeting benefits



130

or applying sanctions is apparent from the new governmentrsquos first dayin office and dominates the governmentrsquos policy decisions thereafter Thismakes coherent policy structured around a long-term visionmdashincluding andespecially developmentmdashextremely difficult

4 Political Settlements the State and ExtractiveIndustry Governance

In this section we present a historical overview of Zambiarsquos copper industry inlight of the salient features of the political settlements set out above Inparticular we consider the changing nature of capital and ownership in theindustry government policies regarding income (taxation) and expenditure(distribution) and the impact of political competition on policies of inclusivedevelopment For a general overview see Table 42

41 1924ndash64

A key theme across both the colonial and post-colonial regimes in Zambia hasbeen a struggle to obtain what the government considered to be a fair share ofthe wealth generated by Zambiarsquos copper deposits The determination of thelevel of royalties and taxation in both periods has always been a process oflengthy negotiations For the Northern Rhodesian government its share inthe countryrsquos copper wealth was boosted by changes in company taxationby an agreement in 1949 with BSAC whereby the government took one-fifthof the gross value of royalties paid by the mining companies

This agreement boosted government revenue nearly fivefold but because ofthe existing political settlement it did not translate into an increase in overallliving standards The British Colonialrsquos office attempted to pursue a progres-sive development ideology through a ten-year plan in 1947 committed tosupporting the lsquouplift of the African populationrsquo However white settlersthrough their control of the local economy hijacked his attempt at inclusivedevelopment and revenues were directed towards their own needs instead(Roberts 2011 21ndash22)

The establishment of CAF in 1953 solidified the trend of state revenueflowing to the capital in Salisbury and to the white settler population (mostlyin Southern Rhodesia)mdashwho were until the late 1950s generally envisagedas the drivers of agricultural development (Larmer 2011) Sir Ronald Prainthe chairman of RST recognized the consequences of the prevailing incomeinequalities between the European and African workers He argued thatlsquoit would always be difficult to keep the Copperbeltrsquos African miners contentedin the face of the violent contrast between African wages and the exceptionally



131

Table 42 Political settlements in relation to the extractive industry Zambia

Periods Global marketprices in $ (periodminimumndash

maximum price)(US$)

EI production(periodminimumndash

maximum annualoutput in tonnesper annum)

Presence oftransnationalactors

Measures of overallstate capacity in EI sector

Key dimensions of EIgovernancepolicy

Patterns of resistance

1896ndash1924 293 BSAC Corporation is the state

1924ndash64 293ndash683 66ndash886 BSAC AAC andRST

Royalty tax of 135 since 1949 Colonial mining policyrevenue mostly to thecentre (London)

Trades unions nationalistmovement

1964ndash73 683ndash1130 632ndash750 AAC and RSTBritish Non-AlignmentMovement

135 up to 1969 replaced bymineral tax (income tax of 45 andprofit tax of 35 flat fee of 735)

Zambianization ofmining workforceCIPEC

Trades unions

1973ndash90 1130ndash2410 228ndash700 IMFWB Mineral tax (as above) NationalizationZIMCO ZCCM

Trades unions

1990ndash2001 2401ndash1690 257ndash500 IMFWB Royalty tax Based on DAgs (between06 and 2) corporate tax between25 and 35

Liberalization andcasualization

Trades unions civilsociety

2001ndashPresent 1690ndash8950 251ndash710 China IMFWB Royalty tax raised to 3 corporatetax 25 to 35


Trades unions resistanceagainst casualization

Royalty tax 6 increased in late2014 to 8 (underground) and 20(open-pit) Dropped in Jan 2015 to6 and 9

Growing resourcenationalism

civil society andcommunity-basedactivity

Six tax policy changes and reversalssince then

Joined EITI in 2009 PF opposition politics

In the first period (1896ndash1924) we adopted 293 as the minimum figure for the period 1924ndash1964 because then the country had not formally started exploiting minerals

Source EITI Extractive Industries Transparency Initiative

OUPCORRECTED

PROOFndashFIN

AL2152018

SPi

lush conditions which our European labour enjoysrsquo (quoted in Phimister2011 132) These dynamics led to high wage expectations on the partof African workers on the eve of independence There was an additionalanticipation that mining companies would provide welfare services for theirworkers including housing education and healthcare just as they had donefor the European workers Because of the dominance of the mining sector theCopperbelt trade unions became influential non-state actors and over timeobtained significant political leverage to achieve these demands This was thesetting that in large part determined Kaundarsquos dealings with the miningindustry after independence and created a new setting of unequal distributionand uneven development

The consequences of these structures which can be termed a coloniallabour-reserve type of economy were long lasting A labour-reserve economyis characterized by a dualistic formal labourmarket and amigrant labour systemthat in Zambia tied vast amounts of peasants to the white-owned miningindustry and settler agriculture Self-employment and entrepreneurship byAfricans in the cities was limited and there was little stimulus for peasantproduction either since both could have undermined the supply of labourto commercial farms and industry Combined with limited public invest-ment in African education the formation of an African middle class wasvery limited

42 1964ndash73

The post-colonial government recognized the risk of being overly dependenton copper wealth to sustain large social and physical investments after inde-pendence especially given the erratic nature of international copper pricesand committed to addressing it In 1967 Kaunda brought together leaders offour of the worldrsquos main copper exporting countries (Zambia Chile Peru andthe CongoZaire) in Lusaka with the aim of establishing a price- and quota-fixing copper cartel similar to the Organization of the Petroleum ExportingCountries (OPEC) which was formed in 1960 The group which becameknown as the Intergovernmental Council of Copper Exporting Countries(CIPEC) was later joined by Australia Indonesia Papua New Guinea andYugoslavia Their effort to control prices failed however and in practiceCIPEC served merely as an information exchange The fundamental barrierto controlling prices was that the member states lacked access to capital tostockpile copper reserves which was crucial to effectively managing supplyIn addition CIPEC member states controlled less than 60 per cent of worldcopper trade and fewer than half of identified reserves and major copperproducers like Canada did not join CIPEC (Larmer 2011) The failure of CIPECto control copper prices led to the realization that the global system was



133

beyond the reach of the member states and that only local policies andownership patterns could be subject to conscious management by Africans(Fraser and Larmer 2011)

As shown in the other chapters Ghana and Peru have both earmarkedvarying degrees of mining revenue for specific regions local governments orsectors Specifically in Ghana 10 per cent of revenue is reserved for subna-tional authorities (see Chapter 5) while through Perursquos lsquomining canonrsquo halfis distributed to support development in the regions in which the miningtakes place (see Chapter 3) Zambia is more similar to Bolivia in this regardhowever In both cases mining revenues traditionally accrue directly tothe national government with little input from regions In Zambia thenational government focuses mining revenues on overall national develop-ment through five-year development plans The initial plan launched in thetransition phase of 1962 emphasized the expansion of physical and socialinfrastructure especially to benefit the marginalized African population Thiswas followed by the First National Development Plan (1966ndash71) which aimedto diversify the economy away from its overdependence on copper miningincluding by promoting rural development Both development plans led to aperiod of sustained economic growth accompanied by the improvement ofsocial indicators On paper the high levels of revenue benefited the wholepopulation equally in practice the expenditure was highly uneven

This turned out to be a short-lived period of progressive developmentA perfect storm developed in the early 1970s which threw Zambia from amiddle-income country to a low-income country status with high levelsof unsustainable debts in the mid-1980s To illustrate this between 1974and 1994 per capita income declined by 50 per cent leaving Zambia as thetwenty-fifth poorest country in the world (Fraser and Lungu 2007 8)Regional and international factors played an important role in the difficultiesfaced by the fledgling state including the UDI in Southern Rhodesia asdescribed above The legacy of the CAF was that of deep economic andinfrastructural linkages between Zambia and Rhodesia which made Zambianparticipation in UN-sponsored sanctions on Rhodesia impossible until suchtime that infrastructural independence particularly in terms of transport andelectricity could be realized Several nations played an important role inassisting Zambia with its goal of economic independence including westernstates like Great Britain (mostly as a direct reaction to UDI) China (specific-ally through construction of the TAZARA railway as an alternative exportroute for copper through Tanzania) and Yugoslavia through non-alignedeconomic development cooperation The ColdWar dictated the internationalgeopolitical order in this period complicating negotiations between Zambiaand its potential development partners



134

43 1973ndash91

Among Zambiarsquos neighbours violent independence struggles and subsequentcivil strife erupted not just in Rhodesia but also in Congo Angola Namibiaand Mozambique At the same time as the global economy collapsed copperprices nosedived with heavy consequences for Zambiarsquos economy as shownin Figure 41

The economic crisis made government expenditure on social and physicalinfrastructure and high wages for mine workers unsustainable The national-ization of the economy and the introduction of the one-party state was away of dealing with these major economic and political crises of the late1960s as well as a reaction to changing global ideas of the state Throughoutthe developing (lsquoThirdrsquo)World leaders sought ways to unify ethnically diversestates (a hangover of colonialism) and ensure equal development for allcitizens as imagined by the Non-Alignment Movement and leaders such asYugoslaviarsquos lsquobenevolent dictatorrsquo Josip Broz Tito One-party states andnationalization were regarded as viable alternatives to what were consideredto be the disruptive outcomes of multiparty democracy They would ensuredevelopment at all levels and reduce incidences of violence and civil war

Szeftel (1982 15) asserts that the centrality of the state in newly independ-ent Zambia was one of the primary underlying factors that led to the

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

ndash10

ndash5

0

5

10

15

20

US$

to

nn

e

An

nua

l

GDP Growth Copper price

Figure 41 Annual GDP growth and copper price trend Zambia 1960ndash2016Note Copper prices represent the price for Grade A copper electrolytic wire barscathodes LondonMetal Exchange cash

Source World Bank (2017a) UNCTADSTAT (2017) Graph format based on ICMM (2014 6)



135

emergence of the one-party state at this specific moment in time He arguesthat the so-called lsquoaccumulation of spoilsrsquo from the mining sector had led tofactionalism and reproduced regional lines of cleavage The allocation ofsenior party and government positions reflected the need to balance theclaims of these contending factions The cabinet for instance had beencharacterized by a (shifting) balance of posts between provinces Thesedynamics threatened to boil over into dangerous conflict as they did whena powerful faction from the Bemba-speaking Northern and Copperbelt prov-inces threatened to alter the balance drastically first by claiming dominancewithin UNIP and thereafter by splitting off and setting up a powerfulopposition party

These political tensions were exacerbated by the continuing unequal distri-bution of (mining) revenues driven by the uneven nature of Zambiarsquos politicalsettlement Economic activity was distributed inequitably and concentrated inthe three provinces along the axis of the railway line that included theCopperbelt Inhabited by 43 per cent of the population these provincescontributed 89 per cent of the countryrsquos gross domestic product (Craig 1999 17)Ethnic balancing therefore was seen by the marginalized regions as cos-metic as the resistance and political formations around the Barotselandissue and other tensions like in the North-Western Province (Larmer andMacola 2007) In describing a detailed history of the Mwinilunga district inNorth-Western Zambia Pesa (2014 52) points out that during early post-colonial elections lsquoallegiances in Mwinilunga were more easily stirred byplaying on connections with Angola and Congo than by reference to anational Zambian state with the remote Copperbelt and ldquoline of railrdquo areasas its centre rsquo Another prominent manifestation of this theme is oppositionfrom the Southern Province which primarily represents a peasantry andcattle-keeping economy that persists through to the present and was neverappeased by the appointment of politicians from the prominent Tonga ethnicgroup to cabinet positions (Macola 2010)

With the process of nationalization of the copper mines starting in the late1960s the Copperbelt began to look like a mini-welfare state with the stateand the mining companies famously providing social services from lsquocradle tograversquo (Fraser and Lungu 2007 8) ZCCM provided facilities beyond themining compounds and made the Copperbelt an attractive place to livemdashaveritable hub of lsquomodernityrsquo (Ferguson 1999) The mini-welfare state was ina way a continuance of the social welfare policies of the colonial miningindustry but now benefiting a larger population ZCCM as a state entityhowever was increasingly treated as a lsquocash cowrsquo and was milked withoutmatching investment in machinery and further prospecting As ore bodieswithin the existing mines were found deeper underground the cost of pro-duction also rose To illustrate the drastic decline ZCCMproduction collapsed



136

from a high of 750000 tonnes in 1973 to 257000 tonnes in 2000 Craig(1999 87) notes that the drop in copper prices was not the only reason forthe decline in production and income

In common with the rest of the Zambian economy the mines suffered from anumber of difficulties As a bulk exporter the transportation difficulties whichafflicted Zambia were particularly severe The situation had deteriorated to such adegree that by the second half of the 1970s the transport system was not able tocarry all of the copper produced leaving themines accumulating stocks of finishedmetal Themines also suffered from the declining capacity of the economy to fundimports Although the companies themselves were net foreign exchange earnerstheir supply of currency was rationed by the Government along with other sectorsand fell short of their requirements

ZCCM was under constant pressure from the government who needed toappease the mine workers to keep the reductions in the workforce to aminimum The goals of diversification into the agricultural sector had notbeen achieved either (Hern and Achberger 2014)

Methods to prevent the rise of alternative centres of power affectedoverall productivity in the public sector A variety of methods were utilizedpowers of appointment to shuffle senior management to prevent themfrom developing their own power base and non-merit appointments tomaintain leadersrsquo own support base To prevent people from becomingentrenched reshuffling of positions became the order of the day with someprovincial ministers staying less than half a year in one position before beinglsquore-appointedrsquo Political appointments in the nationalized industry includingthe copper mines proved disastrous for its functioning as they underminedtechnocrats and professionalismmore generally Zambiarsquos first secretary to thecabinet Valentine Musakanya expressed disenchantment with governmentas early as the late 1960s pointing out that the politically driven restructuringof the civil service was intended to effectively put UNIP in control at all levels(Larmer 2010)

The causes of the crisis were already known at the time as can be seen fromthe 1977 Report of a Special Parliamentary Select Committee that was appointedto examine the countryrsquos economic problems It noted

With the exception of the mining sector few parastatal bodies have exportedanything of substance Government annually makes a large allocation of capitalfunds to support projects undertaken by parastatal organisations This has arisenlargely because these bodies are notable to generate their own capital for plantrenewal and new investment Poor management absence of inventory controloverstaffing inadequate pricing of products and political interference have beennamed as some of the reasons for the poor performance of the parastatal sector(quoted in Craig 1999 79)



137

The private sector was similarly affected Whereas the lsquoZambianizationrsquo of theeconomy was aimed at producing an indigenous entrepreneurial and man-agerial class UNIP was ideologically opposed to capitalism and detested profit-making An independent entrepreneurial class was also regarded as a potentialpolitical threat which came to fruition in 1980 when a group of marginalizedentrepreneurs and professionals actively opposed theUNIP regime by engagingin a coup attempt

The consequences of Zambiarsquos political and economic plunge in the 1970swere dire Desperate about the economic crisis and the related political inse-curity government policies became increasingly ad hoc and unpredictableWithin a space of a few years UNIP first flirted with scientific socialism andthen turned to the business community and eventually in 1984 securedexternal support in the form of a grant from the European Community andthe African Development Bank for a rehabilitation programme of the minesAs a result of its substantial debt levels Zambia had also come under theinfluence of the IFI which forced a structural adjustment programme (SAP)in the 1980s These measures consisted of the removal of subsidies (especiallythose benefiting urban consumers) a reduction of the workforce and liberal-ized foreign exchange rules The uncontrollable urban maize riots of 1986threatened UNIPrsquos survival and Zambia decided to break with the IMF andreintroduce the subsidies This measure was short-lived and the governmentwas soon forced to re-enter the IMF fold Within the context of furthereconomic weakening of the 1980s an alignment of non-state actors cametogether under the banner of the MMD and called for the dissolution of theone-party state Faced with an international democratization wave caused bythe end of the Cold War and pressure from bilateral and multilateral donorsUNIP had to accede to the demands It dissolved the one-party state and calledfor multiparty elections in 1991

44 1991ndashPresent

Simuntanyi (2015) characterizes the period of Zambiarsquos multiparty democracyas a competitive clientelist political system defined as an informal or tacitagreement by the political elite that they will compete for control of thecountryrsquos political and economic resources through periodic elections inwhich the strongest political group takes power rather than through repressionof opponents or violent conflict Within this system political competitiontakes place largely on the basis of distribution of patronagetargeted resourcesto allies and supporters it is also characterized by the existence of severalfragmented political factions The authoritarian streak never left Zambian pol-itics While elections took place and the dominant party was ousted in 2011elections generally remained an uneven playing field in which the ruling party



138

allowed limited space for oppositionWhereas there is some continuation fromtheUNIP era there are also some distinct features thatmark the Third RepublicAs Gould (2010 11) rightly observed

[T]he ambitions of various players ndash for power influence and the control ofresources ndash had been held in check to a large extent by the patrimonialstructures of the UNIP machinery As the regulatory mechanisms of the Party-State crumbled new self-interested players with a wide range of interests andambitions emerged Some of these are associated with the rapidly changinggallery of political parties some with business and commercial interests Othersare linked to themushrooming array of organizations that compete for governmentand donor contracts

The 1990s could also be defined as a lsquochoiceless democracyrsquo in which govern-ments had little space to determine their own budgets given the condition-alities imposed by external financing agreements (quoted in lsquoStrengtheningrsquo1998) Rakner (2003 cited in Hickey 2013 15) suggests that economic andpolitical reforms in Zambia taking place during the exact same period ledto the breakdown of the organizational power of important economic interestgroups such as businesses unions and agricultural cooperatives The privat-ization of state companies like the mines and the traditional mode of patron-age made State House (the office of the Zambian president) political partiesand political actors more susceptible to the special interests of politico-economic entrepreneurs in the process undermining the formal structuresthat normally guide accountability and oversight of business lobbying anddeals Mosley (2014) also highlights the risk of the rise of a new class ofZambian rentiers Because rentiers invest their wealth in the import-exportbusiness and depend on mining companies andor government ties for pro-curement their interests go against the need for policies that would advancevalue-added manufacturing and an overall reduction of costs

In addition the privatization process of the Zambian copper mines duringthis period was seriously flawed For example the Chiluba government hasnot accounted for the sum of US$35 million that it was supposed to havereceived from the sale of the Roan Antelope Mining Corporation of Zambia inLuanshya Similarly the foreign accounts of the government have been util-ized for personal benefit by the leadership as well as for political patronagepurposes (Osei-Hwedi 2003) So after decades of job cuts and declining livingstandards communities on the Copperbelt the political hotbed of Zambiarather than simply welcoming the new boom resented the companiesrsquo unex-pected opportunity to generate profits from exceptional world copper prices(Fraser and Larmer 2011) There were good material reasons for disgruntle-ment In the five years from 1995 to 2000 as the Zambian governmentprepared ZCCM for sale and then sold it employment in the mines had



139

halved Although new investments did create some new jobs companies tookadvantage of weak unions and non-enforcement of employment laws Casualand contract labour became the new norm Moreover the tax incentiveslsquolocked inrsquo under these terms were so generous that the Zambian state wasapplying an effective tax rate of 0 per cent Anymoneymade frommining wasexpatriated before Zambians could see the benefits of the lsquoboomrsquo

In short many of the presumed benefits for the Zambian economy fromprivatization did not materialize and this in turn became a rallying point foropposition parties in the 2000s As happened to UNIP shortly after independ-ence MMD lost its hegemonic position after the introduction of multipartydemocracy Like UNIP it was exposed to rivalling regional forces and oppos-ition forces in the urban areas While MMD won by a large margin in 1996(also since UNIP boycotted the election) it lost most of its popularity in itssecond term (1996ndash2001) Its fall was a result of a combination of factorsprivatization (and its dire consequences) rampant corruption and Chilubarsquosattempt to run for an unconstitutional third term in office Defeated byopposition forces (a similar coalition of civil society churches trade unionsand intellectuals) Chiluba stepped down and appointed Levy Mwanawasa alawyer as his successor Mwanawasa controversially won the 2001 electionfrom UPNDrsquos Andy Mazoka with 29 per cent of the vote thereby lacking aclear mandate3

Mwanawasarsquos quest for political legitimacy and increased leverage withinthe context of a rapidly growing economy and high copper prices shiftedZambiarsquos economic policies of mining taxation and distribution The much-derided Mining DAs were abrogated and renegotiated with a heavy handHigher mining tax rates and debt relief from the World Bankrsquos HeavilyIndebted Poor Countries Initiative (HIPC) which tied debt relief to expend-iture in the social sectors led to a tentative reduction in poverty between 2005and 2012 though mainly in urban areas This slight reduction in poverty isassociated with a movement towards lsquopro-poor expendituresrsquo which supportlabour-intensive activities or in other ways support poor peoplersquos needs Wehave also shown however that the focusing of government expenditures inthis arena has been partial and imperfect especially for two reasons firstleakages away from the target group towards the non-poor as with the FarmerInput Support Programme (FISP) consisting of seed and fertilizer subsidies topoorer farmers and second political barriers which obstruct the flow of publicresources into the poorest regions

The ruling classrsquos resistance to increasing the tax base away from the over-reliance on copper income was closely linked to the way post-liberalizationresources were distributed As Rakner (2003) and di John (2010) point outprior to liberalization the state was able to create rents through a series ofinterventions that included posts in public enterprises and parastatals infant



140

industry protection via trade barriers and subsidized credit through control ofthe banking system among othersWith economic liberalization the levers ofstate patronage were reduced Thus while privileged positions in governmentremained important the tax system became an ever-growing source of dis-pensing patronage and privilege While the Zambian tax system is relativelyeffective the demands of accommodating elites (and their allied interest withmining companies) have constrained the ability of the state to develop amorerobust tax system

Despite rhetoric surrounding the need to grow indigenous entrepreneur-ship under MMDrsquos liberal regime in the 1990s the government did littleto facilitate the growth of (independent) entrepreneurs The SAP did nothelp either as shown by the prescribed investment incentives like taxconcessions and tax rebates that favoured large foreign companies creat-ing an uneven playing field Moreover subsequent governments have con-tinued to feel threatened by Zambian businessmen as potential sourcesof opposition party funding A successful entrepreneur commented thatduring the privatization process Zambian businessmen were side linedbecause of their alleged political affiliation to one of the major oppositionparties (interview) A former managing director of Zambiarsquos PrivatizationAgency remembers a specific case in which a local entrepreneur was shelvedin the early 1990s despite having obtained finance to buy one of the publiccompanies that was in the process of being privatized In most cases ofprivatization the government showed preference to either a foreign or anon-indigenous entrepreneur (Mkandawire 2006) In Zambiarsquos case thewhite Indian and Lebanese communities still dominate the private sector(Sutton and Langmead 2013)

The recent unstable settlements show the resilience of the bureaucracyWhile the president continues to control decision making regarding theallocation of substantive rents (eg state ownership of resources majorcontracts trade agreements etc) Levy (2012) suggests that patronage-relationships and rent-seeking behaviour in general have become muchmore decentralized throughout the hierarchy of the political and bureaucraticelite Members of the business community testify to this They observe thatthere is a class of professional middlemen who on behalf of their businessestraverse the political and bureaucratic elite Businesses can choose the lsquohighpoliticsrsquo routemdashto directly influence the ministers the vice-president or thepresident himselfmdashbut this is seemingly only undertaken by large companiesForeign multinational corporations also choose diplomatic channels via theirembassies mostly to great effect

In terms of leverage in wage negotiations the civil service has overtaken theerstwhile power of the minersrsquo trades unions Their role has also strengthenedbecause of the structural adjustments programmes of the 1990s One has



141

witnessed a professionalization in specific departments especially withinthe Ministry of Finance the Zambia Revenue Authority the Ministry ofCommerce and the Bank of Zambia Ideas around fiscal responsibility debtlevels and macroeconomic stability are quite firmly settled within thesedepartments Bureaucrats are immovable and a constant factor in societyWith their emoluments taking over 60 per cent of the national public sectorbudget this all comes at the expense of much-needed social investments tobridge the inequality gap

In the period since 2001 while continuing to reflect the features ofcompetitive clientelism Zambia has begun to show signs of becoming avulnerableunstable settlement This is caused by an expanding informaleconomy demographic shifts (a large unemployed youth electorate) andlow educational standards aggravated by the death of two presidents in officewhich has caused disruptive presidential by-elections Without a clear line ofsuccession within the political parties the presidentsrsquo deaths have caused deepfactionalism within the parties We have seen a high level of fluidity inZambian governance which especially when compared to its neighbouringcountries makes the political scene even more unpredictable The linkbetween politicians and constituents becomes increasingly indistinct Thuspolitical parties are short-lived and disintegrate once out of office or past theneed for coalitions The main opposition party UPND has a stronger linkwith its (rural) constituents and has been consistently liberal in its outlookbut in recent years has watered down its identity by forging coalitions It isimportant to keep in mind that the youth the largest demographic groupin the country (66 per cent of the population are less than twenty-four yearsold) largely grew up in a post-liberalization economy that is entirelyde-industrialized and increasingly informal They have no recollection of thewelfare state and are unlikely to belong to any social movement or havemembership in any political party As the social base of the electorate changesso does its expectation vis-agrave-vis the state (see Raftopolousrsquo parallel observa-tions on Zimbabwe 2014)

Despite this fluidity andmany electoral cycles especially between 2006 and2016 we can discern shifts in the political settlement that have caused somechanges to Zambiarsquos political and economic landscape As we noted beforechange is most evident from 2001 onwardsmdashthe moment from which MMDfaced opposition and eventually lost a fiercely competitive election in 2011Civil society fragmented and disunited in the 1990s proved that whenaligned it could still constitute a formidable force as it did in 2001 when itunited to prevent Chilubarsquos attempt to run for an unconstitutional third termin office The year 2001 is significant in other respects as well namely thatit coincides with the return of Chinese capital and the turnaround of theeconomy stemming from the rapid rise of copper prices Political competition



142

and the growth of the mining sectors as two former MMD ministers testifyput pressure on the government to increase fiscal space to allow for socialexpenditure Civil society aligned itself with the then opposition party PFto influence the mining tax debate The online leaks of secret DAs by civilsociety campaigns also added to the pressure for urgent tax reforms With keydocuments in the public realm for the first time media and parliamentarydebate focused on the injustice of the long-term tax breaks enjoyed by thecompanies The Zambian government was offered technical assistance fromseveral bilateral donor agencies who now realized that the DAs unfairlydisadvantaged Zambia All donors however insisted that any changes tothe tax regime be endorsed by the companies respecting the principle thata contract has legal value In this case both sides publicly stated a willingnessto negotiate In January 2008 President Mwanawasa surprised everyone byannouncing the unilateral imposition of windfall taxes on mining compan-ies He appeared to have consulted more broadly on this issue with hisministers than other presidents had when he reached this conclusion Thismomentum was short-lived however as his successor Rupiah Bandarevoked the windfall tax as soon as he came into office after the death ofMwanawasa in August 2008 Former ministers feel Banda could have easilyamended the tax regime to appease the mining industry without revokingthe windfall tax altogether While Banda introduced other measures toincrease taxes from the mining sector like a variable profit tax these wereless visible and did little to substantively increase state revenue from themining sector

Tax revenue and evasion was tackled head-on by the incoming PF govern-ment in 2011 with a substantial increase in the royalty tax and the closing ofloopholes regarding the export of the ore News reports following PresidentSatarsquos death in October 2014 indicated that mining companies were trying torenegotiate the tax rates Possibly with an eye on the presidential by-electionof January 2015 which was tightly contested and needed a popular appealthe new Mining Act was passed in December 2014 In response Barrick Goldthe Canadian company that owns the Lumwana open-pit mine in North-Western Province issued a statement that it would suspend its operationsShortly after the elections as expected the mining tax rates were immediatelyrenegotiated and reversed and Lumwana continued its operations It followsthe pattern that once a new government is in place one can almost beguaranteed that mining interests will come to the fore in line with theprevailing political settlement and as always in keeping with fluctuatingcopper prices that hold Zambia hostage It also points to the continuedindividualized negotiations and business influence over State House as itwas the president who announced the revocation of the mining act not theminister of mines or finance The most valuable observation from a tax



143

political economy analysis is that independent of the various tax regimeswith their merits and demerits there has been one constant namely

The system is plagued with incentives both for mining and across sectors Theseindividual deals are tantamount to an individualized tax system which makesadministration impossible particularly when tax administrators may not haveaccess to specific provisions of the individualized DAs or other contractualprovisions Definitions and rules are not clear there appears to be significantdiscretion about how tax provisions are applied and public information abouthow the rules should be applied is scarce This situation raises the potential forhonest taxpayers to exploit the legal ambiguity for their benefit for dishonesttaxpayers to evade taxation for corruption within the tax administration(Conrad 2014 15)

Following a period of sustained economic growth the major donors had adiminished influence on government policies including those related tomining taxation Grants from cooperating partners to Zambia have decreasedfrom 40 per cent of the governmentrsquos national budget in 2007 to 6 per centin 2013 (OECD) and to a mere 26 per cent in 2015 In 2011 the WorldBank reclassified Zambia as a lower middle-income country though it stillranks 163 out of 186 countries on the 2012 Human Development IndexWith this changing tide political parties like PF were now able to enterthe political arena on an anti-neoliberal platform and offer a return to alsquoUNIP-stylersquo developmental state albeit without the suggestion of a full-blown renationalization Donors on the other hand are increasingly caughtbetween the contradictory policies underlying the shift from lsquoaid to tradersquoThis has led to an ambiguous situation where donor governments are fundingtheir own activist organizations to fight the consequences of the dominanceof mining capital while at the same time protecting the investment interestsof their own mining companies

As can be seen in Figure 42 over time the composition and origin of capitalitself has also significantly changed character We challenge the notion of amonolithic nature of international capital The recently privatized mines werepurchased by firms from a diverse array of countries including CanadaSwitzerland and China Indeed the Zambian mining industry remains dom-inatedby global capitalwith a small percentageof shares beingownedbyZCCMInvestment Holdings (IH) a state-owned enterprise In Leersquos book on Chinesecapital and labour in Zambia (Lee 2017) she makes a distinction betweenshareholder capitalism which is based on shareholder value maximizationandChinese state capitalismwhich also aims at profit but not profitmaximiza-tion Thus theprofit horizonof the latter is conceived tobe in the long term andits capital is therefore less footloose Lee argues that it is thus unsurprising thatwhen the global financial crisis of 2008 hit Zambia the shareholder companies



144

immediately retrenched thousands of workers in contrast with Chinese state-owned companies that kept all workers in place Whether this trend will con-tinue in the current downturnwill be an important test case for this proposition

In earlier articles Lee (2014) also argued that another motivating factor forlong-term commitment is that China actually has a need for the copper orefor its own development This contrasts with other holding companies whichuse the copper merely as a trading commodity and have no direct use forthe commodity itself The consequence of the long-term nature of theseinvestments is that the companies are forced to be compliant with regula-tionstaxation and to maintain a high level of political influence In theZambian context the adaptation of the Chinese to the changing regimesand populist responses has been remarkable Lee (2014) concluded that forZambia lsquoChinese state capitalrsquos logic of encompassing accumulation makesit more accommodating and negotiable than global private capital to theZambian state strategy of development if there is a vision and political willrsquoChinese state capital however is more vulnerable to political moods as

Vedanta Resources PlC

First QuantumMinerals

Glencore PLC

Barrick Gold

African Rainbow Minerals (ARM) Ltd

amp Vale (SA)

Enya Holdings

ZCCM

1969ndash2000

Nchanga Copper Mines

1920s to 1969 2016

Anglo-AmericanCorporation (ACC)

China Non-Ferrous

Metals Company

Roan Trust Selection Trust

Roan Copper Mines

1969ndash1982

1969ndash1982

Figure 42 Private ownership patterns in Zambian copper mines 1920s to the presentSource Authorrsquos work



145

the Chinese were particularly targeted by opposition politicians who exploitand channel popular sentiment of resource nationalism against Chineseinvestment The Zambian state has space to negotiate their relationship withChina but rarely does lacking a coherent China policy Chinarsquos long-termplanning includes bringing manufacturing to Zambia Investment in theestablishment of several multi-facility export zones (MFEZs) is indicative ofthis development

Another significant shift in the mining sector in this period is the establish-ment of new mining enclaves in and near Solwezi District in North-WesternProvince (see Maps 41 and 42)4 Three relatively large open-pit copper minesmdashKansanshi Kalumbila and Lumwanamdash(re)started operations there in the lastten years employing more than 7000 workers Both holding companies FirstQuantum and Barrick Gold have headquarters in Canada Solwezi is at thecentre of these developments By 2007 Solwezirsquos population had grown tosomewhere between 120000 and 150000mdashtriple what it was in the year2000 This transformation is visible in the influx of allied activitiesmdashlikeengineering and transportationmdashand supporting services both formal (suchas banks mobile phone and internet companies and retail) and informal(such as taxicabs street vendors and sex workers) making the place a frontierof what has been labelled extractive capitalism (Negi 2014) But unlike the oldCopperbelt Solwezi has shown no signs of emerging urban politics that linkto the national level Given its status as an opposition stronghold throughoutZambiarsquos political history but more especially in recent years against the PFthe central government has halted much needed infrastructure developmentsin this area most notably the ChingolandashSolwezi highway

Historically this region has been largely excluded from elite bargaining atthe national level While there has been a significant rise of political con-sciousness clamouring for a percentage of the royalties from mining oper-ations the area lacks the political powers the unity the numbers (it representsonly 5 per cent of the national vote) and local activism to force this issue Thepotential political brokers in this area are not the trade unions as was the casein the old Copperbelt but rather the local chiefs Their income however isderived from government and mining companies and influences theirdecision making Overall the communities feel marginalized in these areasThe lack of communication between government chiefs and the local popu-lation in relation to the establishment of mining companies in this areareflects the top-down centralized approach of the government and comes tothe fore in the following exchange quoted by Cheelo (2008)

Us as a community had had no role to play in the negotiations of mininginvestments at Kansanshi ndash we did not participate at all We just saw the chiefcome and introduce the investors to us telling us that we should keep them well



146

AFRICA

Zambia


ANGOLA

Mongu

ZIMBABWE

MOZAMBIQUE

Province boundary

Mining licensesExploration licenses

Prospecting licenses

0 100 kmNAMIBIALivingstone

Chipata

MALAWI

Kasama

Mansa

Solwezi

1Ndola

TANZANIAN

Map 42 National distribution of mining licenses in Zambia in 2017 showing particular concentrations in North-Western and CopperbeltProvincesSource Elaborated on the basis of maps produced by flexicadstrecom accessed September 2017

OUPCORRECTED

PROOFndashFIN

AL2152018

SPi

He told us that lsquoyou shouldnrsquot steal from them you shouldnrsquot do bad things tothem If you keep them well they will develop this regionrsquo (Cheelo 2008 169)

It is not clear how elite relations will develop in the context of the post-2016general elections It is interesting to note that an unprecedented level ofcampaigning by the ruling party took place in North-Western Provincewhich was an important indicator of the regionrsquos growing political import-ance Despite these efforts the province overwhelmingly voted for the oppos-ition For now the mining industry in North-Western Province continues tobe a classical enclave economy where mines and mining compounds areliterally fenced off from the local communities The interface between inter-national companies and the Zambian government takes place in Lusakawhere the corporate affairs offices are based

5 Conclusion

Zambiarsquos economic growth strongly depends on cyclical changes in inter-national commodity prices Over time these changes have prompted reformbe it in the shape of nationalization privatization or more recentlythe abrogation of DAs But overall there has been a certain continuity instatendashnatural resources relations This existing order was formed during theearly colonial era in which the extractive industry came to dominate theeconomic social and political landscape Designated as a labour-reserve econ-omy the focus of development has always been on the mining industry at theexpense of the rural hinterlands The political culture in Zambia has largelybeen shaped by urban labour migrants the current-day urban dwellers

Zambiarsquos developmental outcomes then in part have been determined bythe type of international capital that dictates the mining industry The indus-try was initially dominated by what Ferguson (2006 35) called a lsquosociallythickrsquo type of capitalism in whichminers and their extended families enjoyedextensive welfare programmes The Copperbelt in many ways resembled amini-developmental state during this period As we have seen above this formof capitalism was replaced in the late 1990s by a more footloose neoliberalform involving significant Chinese capital and in which the industry wounddown all erstwhile social contracts with the mining communities The resent-ment about the privatization process the accompanying corruption amonglocal and international brokers and the limited revenue derived from a boom-ing industry led the opposition party to mobilize around the issue of resourcenationalism without the suggestion of a full-scale nationalization of theindustry A state-led development model thus made a return but was accompa-nied by increasing misgivings about the potential politicization of this process



148

To what extent then does a political settlements approach help to charac-terize and explain the way in which politics natural resource governance anddevelopment interact in Zambia On the one hand the political settlementapproach to power and institutions offers a clear sense of how elite-levelpolitics play out in Zambia most notably by helping to identify the signifi-cance of building broad ruling coalitions that stretch across the main urbanareas and ethno-linguistic groupings But whereas these coalitions proveduseful for establishing stability in Zambia they have not stimulated develop-ment and pushed non-dominant groupings to the margins Patronndashclientpolitics deepened in response to competitive pressures during the 1990smost notably through the distribution of agricultural subsidies and the(brief) introduction of the windfall tax on mining profits Along with theexecutive type of presidentialism that was institutionalized under Kaundarsquosperiod of dominance these dimensions also help to explain why politicalmobilization has lacked any socially coherent basis that was sustained overthe long term It helps us to understand why these organizations even witha clear manifesto and ideology have in practice largely turned out to beclientelist rather than programmatic It also clarifies the failure of politicalleaders to form sustained followers among lower-level factions as reflected inthe personalized nature of political parties which lack a persistent social basisover time With the rise of the informal sector and the coming of age ofyounger generations (lsquothe post-IMF babiesrsquo) the social base is becomingeven less defined and more fluid

What the political settlement framework is perhaps less adept at explainingis why the social bases of political mobilization matter as these can shape thedevelopmental tendencies of ruling coalitions Overall in Zambiarsquos historywe can see short periods in which inclusive development was briefly actual-ized from the 1960s until the early to mid-1970s and again from the early2000s to 2014 This was always in the context of high copper prices increasedfiscal space and nationalistpopulist pressure to distribute the copper wealthThe recovery was never sustained for a long period and its potential was neverfully realized Besides the challenge of maximizing tax revenue proceedswere often spent in an unproductive manner The consequence of this wasthat during an economic downturn the consumptive nature of the stateimmediately gave rise to external and domestic debts Neoliberal capitalismtook an especially unproductive form in Zambia it not only diffused socialorganizations (such as trades unions and farmersrsquo cooperatives) but it alsoundermined the processes of class formation that could in turn have led toclass-based mobilization Ideas and memories matter more than the politicalsettlements approach seems to imply These elements are especially clear forcountries that have a long mining history with a formative influence such asthat of Zambia



149

Table 43 Indicators of inequality poverty and extractive industries in Zambia

Indicator Period

1964ndash72 1973ndash90 1991ndash2001 2002ndash10 2011ndash14

InequalityGini ndash ndash 5195 5124 575

PovertyPoverty headcount ratio at national poverty lines ( of population) ndash ndash ndash 605 54Poverty headcount ratio at $125 a day (PPP) ( of population) ndash ndash 61 68 605Poverty headcount ratio at $2 a day (PPP) ( of population) ndash ndash 78 84 ndash

Life expectancy at birth total (years) 48 49 41 49 56Literacy rate adult total ( of people ages 15 and above) ndash 65 68 65 706Access to electricity ( of population) ndash 13 17 185 221Primary completion rate total ( of relevant age group) 70 83 66 86 91Lower secondary completion rate total ( of relevant age group) ndash 185 27 54 60Mortality rate infant (per 1000 live births) 111 103 108 75 574

Extractive IndustriesMineral rents ( of GDP) 2608 1151 925 1403 2206Total natural resources rents ( of GDP) 2725 1484 0 1792 2514Ores and metals exports ( of merchandise exports) 9804 9749 7625 7693 7455

Source Compiled by the authors from World Bank Reports UN reports and the Central Statistical Office of Zambia

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Acknowledgements

Jessica Achberger helped enormously in the preparation of this chapter Justine Sichonealso assisted with preparation of the figures

Notes

1 For more indicators on inequality poverty and extractive industries in Zambia seeTable 43

2 Details were as follows the government had agreed to compensate for the abruptcancellation of the service contracts by paying K55 million and had to pay anadditional K1466 million to redeem the bonds Additional costs were incurred inthe redemption of the bonds which carried a coupon of 6 per cent with fundsborrowed at 12ndash13 per cent (Burdette quoted in Craig 1999 40 n 108) There aredifferent versions of the causes and beneficiaries of this expensive saga

3 According to a former intelligence agent and other sources the 2001 election wasrigged in favour of MMD

4 In 2015 Solwezi District was subdivided into three districts (Solwezi Kalumbila andMushidano) each containing one of the big mines



151

5

Competitive Clientelism and the PoliticalEconomy of Mining in Ghana

Ghana has a long history of mineral resource extraction with mechanizedlarge-scale mining often traced as far back as the nineteenth century Thecountry is endowed with substantial mineral resources in commercial quan-tities including oil gold diamonds manganese bauxite limestone and saltGold has been the predominant mineral produced reflecting the countryrsquoscolonial name the Gold Coast Once the leading producer of gold in the worldand accounting for about 355 per cent of total world gold output between1493 and 1600 (Republic of Ghana 2014 4) Ghana currently ranks aroundtenth in the global league of major gold producers but is still Africarsquos secondlargest producer after South Africa (Kapstein and Kim 2011)

However the actual contribution of mining to the countryrsquos developmentprospects has long been called into question For some (eg Aryee 2001)mining has played a crucial role in Ghanarsquos development efforts especiallywhen viewed in terms of its contribution to government revenues Between1999 and 2014 themining industry was consistently the highest gross foreignexchange earner (Republic of Ghana 2014 12)1 Presently mining contrib-utes about 27 per cent of government revenue in terms of domestic taxcollections (ibid) and accounted for 43 per cent of total merchandise exportsin 2012 (Ghana Chamber of Mines 2013) Export revenues from the mineralsector amounted to US$51 billion in 2013 (Aryee 2014) Yet there is a strongsense in both the academic literature and national policy debates that Ghanais far from obtaining sufficient developmental benefits from its mining sectorOne close industry observer concludes that lsquomining has not fulfilled itspoverty reduction rolersquo (Akabzaa 2009 49) A World Bank-commissionedstudy concurs describing the sectorrsquos contribution to overall national devel-opment efforts as lsquodisappointingrsquo (Ayee et al 2011 6) and the NaturalResource Governance Institutersquos Resource Governance Index for 2017 assessedGhanarsquos performance in mining revenue management as lsquopoorrsquo (NRGI 2017)


Why has Ghana been unable to effectively translate its massive mineralwealth into more inclusive forms of development

This is an important question in view of Ghanarsquos recognition as one of thebest governed countries in Africa with multiparty democracy increasinglyentrenched In 2013 Ghana was the highest ranked African country (andfifteenth out of fifty-eight countries globally) in the Resource GovernanceIndex which measures the quality of countriesrsquo natural resource governanceperformance in terms of transparency and accountability in 2017 the indexfor Ghanarsquos oil management was still the highest of rankings for Africancountries though its mining management was ranked twenty-fourth lowerthan that of Botswana Burkina Faso and South Africa (NRGI 2017) Ghana isalso held up as lsquoa model of best practicersquo (Standing 2014) based on its policyof distributing a proportion of mining rents to subnational authorities inmining communities Judged from the perspective of the resource curse litera-ture which emphasizes the quality of governance and institutions as the bestroute to translating natural resource wealth into broad-based developmentGhanarsquos experience with natural resource governance is therefore puzzling

In this chapter we use insights of the political settlements literature toexplore the politics of mining sector governance in Ghana and deepen ourunderstanding of why the utilization of natural resource wealth for broad-baseddevelopment has historically proven lsquoto be difficultrsquo (Boakye et al 2012 1) Inparticular we work with the claim that institutions are the products of elitebargains and that their role in shaping development outcomes can thereforebest be understood within the context of embedded power relations Thisapproach not only helps us understand why very similar sets of formal insti-tutions often produce divergent development outcomes but also allows ananalysis of the contending interests that exist within any state which con-strain and facilitate institutional and developmental change Poteete (2009)uses similar ideas to argue that in Botswana variation in the governance ofextractives is a product of elite commitment and capacity to overcome cliente-list pressures and channel mineral rents into long-term development goalsShe argues that

Politicians with narrow and unstable coalitions see rentier politics as an attractivecoalition building strategy their responses to this political problem hinder statebuilding [ Conversely] [p]oliticians with broader and more stable coalitions areless likely to turn to rentier politics to bolster political support in part because theyare more apt to believe that they will reap the benefits from investments in statebuilding (Poteete 2009 545)

Poteete also insists that a fuller account of the Botswanan experience requirestaking external factors into account2 Building on these ideas we askwhat rolesdo power relations ideas and transnational actorsfactors play in shaping


Competitive Clientelism and Mining in Ghana

153

mining sector governance inGhana (including issues around the distributionof rents) and how have these in turn shaped prospects for mining-leddevelopment The chapter proceeds as follows in Sections 1 and 2 we discussthe overall interaction ofmining governance and political settlements over thelong sweep of Ghanarsquos history from the pre-colonial period to the presentSection 3 then focuses on the period since the early 1990s drawing particularattention to the ways in which a competitive clientelist settlement has affectedmining governance and helps explain the generally disappointing impacts ofmining on poverty reduction Sections 4 and 5 then address two particularfeatures of the Ghanaian mining context the roles of the chieftaincy institu-tion and of centralndashlocal relationships and the significant small-scale extra-legal mining sector In each instance we argue that the nature of nationalndashsubnational relationships within the political settlement affects patterns andmeans of inclusion in the mining economy and the quality of its effects onlocal development

1 Political Settlements in Ghana A Periodization

Until the return to multiparty democracy in 1992 the political history ofGhana was essentially a story of political instability With the notable excep-tion of the First Republic under Nkrumah (1960ndash66) the interludes of civiliangovernments under the Second (1969ndash72) and Third (1979ndash81) Republicswere short-lived unable to survive for longer than three years without beingoverthrown in a coup drsquoeacutetat With each military takeover state power shiftedfrom one ethnic group to the other (Chazan 1982) This section attempts toperiodize Ghanarsquos political settlements dynamics starting with how processesof decolonization laid a foundation for the emergence of competitive clien-telism During the first three decades after independence Ghanarsquos politicalsettlements oscillated between competitive clientelism vulnerable authoritar-ianism and a dominant leader type of settlement before reverting to com-petitive clientelism from 1993 to the present See Table 51 for a summary ofthese settlements

11 Decolonization and the Emergence of Competitive Clientelismin Post-Colonial Ghana 1874ndash1965

Prior to the formal declaration of the Gold Coast as a British Colony in 1874pre-colonial Ghanaian societies were organized largely into centralized andhierarchical kingdoms the most powerful of which was the Asante KingdomIn 1844 the British signed a political agreement with several Fanti chiefs3

Dubbed the Bond of 1844 this agreement extended British protection to the



154

Table 51 Periodization of Ghanarsquos national political settlements dynamics colonial period to date

Timeperiod

Characterization of rulingcoalition based on Khanrsquos(2010) typology

Name of ruling coalition Name of ruling coalition Type of political regime Broader development ideology

1874ndash1956 Dominant settlement 1874ndash1950 British Crown British Crown British colonial rule ndash

1951ndashFeb 1957 power sharinggovernment between Nkrumahrsquos CPPand colonial officials

1957ndash66 Competitive clientelism 1957ndash64 CPP led by Nkrumah CPP led by Nkrumah Multiparty democratic(First Republic)

Nationalistsocialist

1964ndash66 CPP led by Nkrumah CPP led by Nkrumah Legal One-Party

1966ndash81 Vulnerableauthoritarianism

1966ndash69 National Liberation Council National Liberation Council Militaryndashbureaucratic ndash

1969ndash72 Progress Party led by Busia Progress Party led by Busia Multiparty democratic(Second Republic)

Liberal

1972ndash74 National Redemption Council National RedemptionCouncil

Military-bureaucratic-chiefly

ndash

1975ndash78 Supreme Military Council(SMC I)

Supreme Military Council(SMC I)

Military (only)

1978ndash79 SMC II SMC II Internal military coup4 June 1979 Armed ForcesRevolutionary Council

Armed ForcesRevolutionary Council

Military ndash

Sept 1979 Peoplersquos National PartyLimann

Peoplersquos National PartyLimann

Multiparty democratic(Third Republic)

ndash

1982ndash92 Dominant leadersettlement

31 Dec 1981 to Jan 1993 PNDC led byRawlings

PNDC led by Rawlings Military-bureaucratic Militant-populist and neoliberal

1993ndash2017 Competitive clientelism 1993ndash2000 NDC Rawlings NDC Rawlings Multiparty democratic(Fourth Republic)

Social democraticresourcenationalist

2001ndash08 NPP Kufuor NPP Kufuor Property-owning democracy andprivate sector-led growth

2009ndash12 NDC Mills NDC Millsa Social democraticresourcenationalist

2012ndash16 NDC Mahama NDC Mahama Social democraticresourcenationalist

Jan 2017ndashdate NPP Akuffo-Addo NPP Akuffo-Addo Property-owning democracy andprivate sector-led growth

Note a President Mills died while in office in July 2012 and Vice-President Mahama became president The next national elections were held in December 2012 at which Mahama stood for president asthe NDC party candidate and won and the NDC took a majority in Parliament giving the NDC a second term in government

Source Authorsrsquo work

OUPCORRECTED

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AL2552018

SPi

signatory Fanti states and gave Britain a degree of authority over the coastalpart of Ghana From here the British extended their jurisdiction inwards overthe rest of the southern part of contemporary Ghana British expansionprovoked a war with the Asante Kingdom in the middle of the country withseveral battles leading ultimately to Asante defeat in 1901 British rule wassubsequently extended over the Asante Kingdom and its hinterland to thenorth which became the Northern Territories Thus the Gold Coast was anamalgamation of the Colony (the coastal part) where societies had a longhistory of interaction with European traders the Ashanti territory in themiddle belt Togoland which had been part of the German empire but cameunder British mandate after World War I and the Northern Territories (NTs)(ie the present-day Northern Upper East and Upper West regions) Theseterritories had different experiences of social and economic change as a resultof their varying interaction with the colonial government (seeWhitfield et al2015 Abdulai 2012)

Because mining and agricultural production were concentrated in theAshanti territory and Gold Coast Colony these regions received the bulk ofcolonial capital investments In contrast the NTs were integrated into thecolonial capitalist economy as a pool of reserve labour (Plange 1979) Thesedifferential terms of incorporation led to a fragmented elite front during thedecolonization process (Abdulai 2012) Moreover the concentration of edu-cational and economic opportunities in the Colony and Ashanti during thecolonial period resulted in multiple distinct but overlapping social groupswith varying economic interests which often conflicted with each otherThese conflicts of interest led to a high degree of political mobilization anddispersion of power in society leading to a fractured nationalist movementtowards decolonization (Whitfield et al 2015)

As a result the decolonization struggle in Ghana was not so much a conflictbetween Africans and the British colonial authorities as one among societalgroups in the colonial territories (Whitfield 2018) When the decolonizationprocess started with elections in the major towns in 1950 for Africanmembersto form a power sharing government with the British it played out in acontext of extremely dispersed power among groups of elites as well assignificant political mobilization and organization across sections of societySeveral political parties emerged and their alliances and composition changedover time as three elections were held before independence The educatedelites led by J B Danquah formed the United Gold Convention Party(UGCC) in 1947 which was essentially an African business lobby seeking tocapture the trade of European merchant-importers Kwame Nkrumah whowas the General Secretary of the UGCC split off to form the ConventionPeoplersquos Party (CPP) in 1949 under pressure from a group of educated lsquocom-monersrsquo to be their leader (Whitfield et al 2015 Whitfield 2018)


156


The Nkrumah-led CPP won national elections organized by the colonialadministration in 1951 and 1954 and Nkrumah became Leader of Govern-ment Business in a power sharing arrangement between the CPP and thecolonial administration At this point opposition to the CPP came mainlyfrom the UGCC and the state council of chiefs who either stood as candidatesthemselves or used their machinery of sub-chiefs to support other local elitesThe majority of representatives of the chiefs were not sympathetic to the CPPgovernment After joining the power sharing government with the BritishNkrumah and CPP politicians took steps to reduce the political authority andeconomic base of chiefs with the objective of curtailing political opposition tothe CPP ruling coalition

Shortly after the 1954 elections a new political coalitionmdashthe NationalLiberation Movement (NLM)mdashwas formed in the Ashanti territory4 Com-posed mainly of Ashanti chiefs cocoa farmers commonersrsquo associationsand UGCC elites the NLM rejected the CPPrsquos call for a unitary constitutionin favour of a federal one Their purpose was to enable lsquoAshantis to use theirregionrsquos wealth to benefit themselves rather than to subsidize development inthe less affluent parts of the countryrsquo (Smock and Smock 1975 68) Thoughthe 1954 election was supposed to determine to whom the British wouldtransfer political authority at independence the NLMrsquos agitations promptedthe colonial administration to insist on national elections in 1956 to deter-mine the populationrsquos wishes regarding the character of the independenceconstitution Although the CPP again managed an overall victory in thiselection and formed the first fully independent government the variousethnic and regional-based parties demonstrated their strength in their respect-ive ethno-regional strongholds with the largely Asante-based NLM winninglsquonearly two-thirds of the vote in the ldquotrue Ashantirdquo statesrsquo (Austin 1964 353)

Having successfully survived the 1954ndash56 political struggle and now at thehelmof a fully independent state theCPP ruling elites adopted severalmeasuresto manage their growing vulnerability in power One suchmeasure was the co-optation of opposition politicians into the ruling coalition a strategy facilitatedby the distribution of public resources along patronage lines (Ladouceur 1979174ndash5 Songsore et al 2001Whitfield et al 2015) The secondmeasurewas thesuppression of opposition elements through the passage of various laws More-over by 1960 Nkrumah had pushed through a new Republican Constitutionwhich concentrated extraordinary powers in the hands of the president and in1964 Ghana became a de jure one-party state under Nkrumahrsquos CPP

12 Vulnerable Authoritarianism 1966ndash81

In February 1966 the CPP government was violently overthrown througha military coup marking the beginning of vulnerable authoritarianism in



157

Ghana Following this coup the Ghanaian economy floundered under asuccession of short-lived military and civilian regimes lsquoeach apparently toocaught up in internal rivalries and personal ambition to give serious attentionto the economyrsquo (Berry 2008 39) Between 1966 and 1981 there were sevenregime changes signifying a period of constant power struggles and highlevels of conflict between factions of political elites bothmilitary and civilianfor control over the state (Whitfield 2018) Coups drsquoeacutetat prompted by macro-economic crises deposed two democratic regimes (the Second and ThirdRepublics) but the subsequent ruling coalitions of both military and civilianregimes could not maintain power for long in the face of mounting pressuresfrom excluded political elites (Whitfield et al 2015) Consequently no polit-ical coalition was able to hold power for more than seven years and thecountry oscillated between periods of democratic rule and military govern-ments until the return to multiparty democracy in 1992 (ibid)

13 Dominant Settlement under the PNDC 1982ndash92

By 1981 Ghanawas in themidst of a severe economic contraction that led to acrisis of legitimacy for the political military and bureaucratic elites that hadbeen ruling Ghana since independence The crisis reached so far unheard ofproportions to the extent that lsquothe averageGhanaian family consumed at least30 less food in 1982 than the same family did in 1970rsquo (Donkor 1997quoted in Armstrong 2008 14) Jerry ( J J ) Rawlings who had led a coup in1979 before yielding to democratic authority in the Third Republic nowreversed course He mobilized junior ranks in the military to overthrow theelected government and called for a lsquopeoplersquos revolutionrsquo resulting in a tem-porary mobilization of the lower sections of society The severity of the twineconomic and political crises thus created a window of opportunity for chan-ging the political settlement and the emergence of a new group of ruling elitesled by Rawlings under the Provisional National Defense Council (PNDC)(Whitfield 2018) The PNDC government got the country out of the economicimpasse and restarted economic growth by implementing an Economic Recov-ery Programme (ERP) in 1983 followed by a structural adjustment programme(SAP) from 1986 to 1991 with support from the International Monetary Fund(IMF) andWorld Bank (WB) (Aryeetey and McKay 2007 147) The impacts ofthese reforms have been hailed as lsquosalutaryrsquo (Oelbaum 2007 15) especiallywith regards to restoring economic growth and macroeconomic stability

Unlike previous military regimes the PNDC was characterized by a largedegree of cohesion among the higher-level factions of the ruling coalitionwhich enabled it to implement difficult economic reforms that previousregimes were too vulnerable to undertake (Whitfield et al 2015) Thesehigh-level factions included technocrats who were in charge of economic



158

policy and who came from the universities or had served in previous govern-ments a conservative wing composed of traditional authorities and estab-lished elites who were largely in charge of the political strategy after 1984leaders of the lsquorevolutionary organsrsquo who after 1984 had little political orpolicy influence and so-called lsquosecurocratsrsquo who were responsible for securityof the ruling coalition Power became centralized around Rawlings as thesmall group of PNDC elites owed their positions to him and had no independ-ent power bases of their own (Whitfield 2018) Meanwhile the establishedpolitical elites were seen as the major cause of the countryrsquos economic declineand thus had little legitimacy with which to challenge the PNDC

The PNDC government also had unprecedented financial support fromthe Bretton Woods institutions for undertaking its economic measuresLarge aid inflows from the WB and IMF helped to buffer the impact of thereforms and softened the blow to the population of massive cuts in gov-ernment expenditure and public sector employment price increases andcurrency devaluation Foreign aid also allowed the PNDC government toincrease lsquodevelopmentrsquo spending that helped shore up its legitimacy amongthe population (Whitfield et al 2015 Whitfield 2018)

However towards the end of the 1980s and in the early 1990s theexcluded political factions formed an alliance and increased pressure onthe PNDC government to return to multiparty rule Following the introduc-tion of democratic local elections in 1988 in which newly created districtassemblies were to be the highest authorities responsible for developmentaldecision making at the local level Rawlings returned the country to multi-party democracy in 19925 This marked a return to competitive clientelismin Ghana

14 Return to Competitive Clientelism 1992ndashPresent

Following the return to multiparty democracy in 1992 a de facto two-partysystem emerged in which the National Democratic Congress (NDC) andthe New Patriotic Party (NPP) have dominated all elections The NDC is thecivilian metamorphosis of the PNDC while the NPP has its roots in theDanquah-Busia political tradition which evolved from the UGCC the NLMthe United Party and the Progress Party led by K A Busia during the SecondRepublic In ideological terms the NDC professes to be a social democraticand statist party that seeks to lsquoensure optimum production and distributivejusticersquo (NDC 2004 12) while the NPP regards itself as a pro-market partyand touts the private sector as the main engine of growth (NPP 2012) Theperiod from 1992 marked a return to competitive clientelism in which thesetwo dominant parties compete for electoral power With each electoral



159

cycle the NDC and NPP have become increasingly competitive and themargin of votes by which candidates win the presidency has been declining

During the last decade and a half power has alternated thrice between thesetwo parties (in 2000 2008 and 2016) with presidential elections sometimeswon by a margin of less than 05 per cent of the total votes Despite this equalstrength the party that wins electionsmonopolizes power and state resourcesirrespective of the margin of its electoral victory Consequently each rulingcoalition is characterized by a high degree of vulnerability providing strongincentives for ruling elites across both parties to focus on short-term objectivesof political survival In this context ruling elites often prioritize initiativesthat can deliver immediate visible benefits in order to win the next electionwhile avoiding initiatives that have political costs as with reforms concerningland ownership and the role of chiefs in land transactions

The implications of competitive clientelism have been well discussed in theliterature (eg see Oduro et al 2014 Whitfield et al 2015) Here we focus ontwo issues that have had specific implications for natural resource governanceFirst the increasingly competitive character of elections effectively under-mines prospects for building a broad and enduring political consensus on anational development agenda As a result lsquothe national interest has becomefragmented along party lines with the result that each new administrationhas followed its own short-to-medium-term development agenda and spend-ing priorities based on its partyrsquos election platformrsquo (Gyimah-Boadi andPrempeh 2012 102) Second securing and remaining in power has becomean increasingly expensive endeavour The increasingly competitive nature ofelections has created large political financing needs and the money lsquoinvestedrsquoby partyfinanciers and individual politicians needs to be lsquorecoupedrsquo Recoupinginvestments and refilling party coffers is typically done through kickbacks onstate contracts awarded to party members who in turn expect to be rewardedwith political appointments or business contracts (Bob-Milliar 2012) In thefollowing section we explore the ways in which these two dynamics haveshaped the relationships between political leaders and mining companiesand the implications of this for the governance of the mining sector

2 Political Settlements and Mining Governanceover the Longue Dureacutee

In this section we discuss how mining governance has shifted in relationto the changing political settlements outlined in Section 1 We will show thatwhile there are clearly causal relations to be drawn here they are not directThus while mining governance has changed as a consequence of shifts frompre-colonial to colonial to early independence and neoliberally-oriented



160

settlements the changes are not perfectly aligned in time Furthermore whilecompetitive and clientelist-oriented logics have dominated much of the post-colonial period they have been associated with quite distinct forms of mininggovernance While changes in governance may represent responses to thepressures and incentives created by clientelism their diversity shows alsothat ideas and international influences are as important as the nature of thesettlement Table 52 offers a summary of the periodization of political settle-ments in mining

21 Pre-Colonial Period Chiefly Dominance over Mineralized Lands

While it remains uncertain when gold mining commenced in Ghana there isconsensus that the local inhabitants were accustomed to gold mining longbefore the Portuguese arrived in 1471 (Arhin 1967 Anin 1994 Dumett1998 Hilson 2002) At the centre of resource extraction and control duringthis period were chiefs and kings who acted as trustees for the care of the landowned by all the people (Dumett 1998 16) During this period any individ-ual or group could mine gold almost everywhere they chose so long as thiswas within the limits of their own lineage or stool lands (ibid 68) Stool landis collectively owned land held in trust by a collective authority usually achief on behalf of an extended family a clan or a community of ancestrallyrelated people6 Over the centuries revenues from gold mining provided oneof the most important building blocks for state formation and consolidationin all the important kingdoms in pre-colonial Ghana (ibid 41) Among the

Table 52 Periodization of political settlements in mining Ghana

Time period Dominant actors inshaping the settlement

Modes of inclusion in extractive industry

Pre-colonial period Chiefs clans and families Retention of one-third of mining proceedsby local populations

1874ndash1956 Colonialcapitalism

British mining companieschiefs

Employment in mines

1957ndash85 Statedominance and thenationalization of mines

State-owned enterprises Employment in mines

1986ndash2008Liberalization of mines

Multinationalcorporations BrettonWoods institutions chiefs

Employment in mines

2009ndash16 Return toresource nationalism


Employment in mines increased taxationand redistribution through social transfersartisanal and small-scale mining (bothlegally and illegally) allocation tocommunities through MineralsDevelopment Fund




161

Ashantis in particular gold became lsquothe mirror of kingship and imperialsplendour and the nexus that undergirded the state the social order andthe entire culturersquo (ibid)

Dumett (1998) identified threemainways by which chiefs used their powersto extract surplus from gold mining The first and most prevalent approachwas the abusa share system by which miners retained one-third of theirproceeds and turned over one-third to the local chief or stool leaving theremaining third for the king or paramount ruler The second was the directpower of political authorities to tax which derived from both the traditionalterritorial controls of the ruler as well as from the kinship obligations of thepeople to him At the peak of Asante power in the nineteenth century majorrevenue sources included a poll tax levied at the rate of one-tenth of an ounceof gold per man The third was through a system of compulsory communitylabour7 when lsquospecial days were set aside for all the citizens to mine solely onbehalf of the paramount rulerrsquo (Dumett 1998 71)

The overall evidence suggests that whereas the political settlement onmining could be characterized as inclusive at the level of the elites it remainedgenerally exclusionary for the greater majority of the population in terms ofthe distribution of material benefits Much of the available literature suggeststhat artisanal gold extraction in pre-colonial Ghana was not worth the effortexpended Analysing the returns from gold extraction vis-agrave-vis the effortsrequired G A Robertson concluded that lsquoWorking for gold was not a profit-able form of employmentrsquo (Robertson 1819 quoted in Dumett 1998 77)Although Dumett (1998) emphasizes the need to understand traditional min-ing as an income supplement for farmers outside of the farming season healso draws attention to the generally exclusionary character of gold revenuesin terms of its socio-economic relevance for themasses In particular he drawsattention to instances when lsquochiefs might enter a mining district any timethey chose and in total defiance of the abusa share and legitimate taxationsystems forcibly confiscate all gold dust and gold jewellery possessed byminers and their familiesrsquo (Dumett 1998 75ndash6)

Writing specifically on the Asante Kingdom Arhin (1978 97) similarlyconcludes that lsquogold mining and trading did not have as much developmentaleffect on Ashanti society and economy as could have been expected from theamount of wealthrsquo accumulated via gold extraction in part because much ofgold revenues were lsquoused in the building of state power a means of furtherwealth-acquisition by the Ashanti statersquo Moreover a large portion of the goldacquired from taxation was used for the refinement of chiefsrsquo regalia which inthe cultural milieu of the historic period was a means of social and politicalcontrol As will be see in Subsection 422 this problem has persisted rightthrough to the present with some chiefs continuing to use their share ofmineral royalties on themselves and their palaces



162

22 Colonial Capitalism and the Subtle Declinein Chiefly Powers 1874ndash1956

The advent of colonialism and expatriate-led capitalism catalysed significantchanges in the relationship between the political settlements and mininggovernance in part because it marked the beginning of the commercializationof mineralized lands and the subtle decline in chiefly control over such landsFollowing an extensive period of stagnant gold productionmdasha direct result ofthe 200-year slave trademdashEuropean interest in Gold Coast gold was suddenlyrenewed in the 1870s Following the mass gold rushes in the early 1880ssignificant European capital was invested in the Gold Coast Colony andAshanti as hundreds of buyers applied for land concessions8 The periodfrom 1892 to 1901 has been characterized as Ghanarsquos first lsquoJungle Boomrsquowhen some 400 newly established companies invested pound40 million to developgold mining properties Between 1901 and 1902 gold production in the GoldCoast increased 400 per cent as investors began withdrawing interests fromSouth Africa during the Boer War of 1899ndash1902 (Hilson 2002 22)

One serious consequence of the gold rush associated with colonial capital-ism was lsquothe commercialization of stool lands which resulted in inter-villageboundary disputes that threatened the stability of the statersquo (Ofosu-Mensah2016 32) For Dumett (1998 272) this movement towards the commercial-ization of land was lsquothe most disruptive dimension to the encroachment ofWestern capitalism on the traditional economy and society of southwesternGhanarsquo not least as paramount rulers sub-chiefs and village headmen soonlearned to attachmoney values to lands believed to contain gold-bearing soil9

Partly because of the absence of landmarks to clearly distinguish land bound-aries access to mining leases triggered waves of litigation between competingtraditional landlords

A related issue was the slow deterioration in the authority of chiefs Dumett(1998 175) identifies three converging forces that contributed to the erosionof traditional authority structures during the colonial period (1) slowlydiminishing respect for coastal chiefs as a long-term aspect of colonial ruleand westernization (2) further fragmentation of chiefly power in the interioramid the lure of payoffs by European prospectors and Africanmiddlemen as aconsequence of concession leasing and finally (3) arbitrary actions by thecolonial government such as the occasional destoolment of lsquorecalcitrantrsquochiefs The commercialization of mineralized lands complicated these pat-terns While some chiefs gained in wealth and power through the very con-siderable leverage placed at their disposal by the lease of mineral propertiesto Europeans (Dumett 1998 75) others suffered from a loss of authority andcontrol Under Akan law the leasing of mineral lands fell mainly under thepowers of chiefs (the ahenfo) enabling them to increase their powers and



163

wealth from expatriatemining leaseholders In contrast the paramount rulers(or omanhene) saw far too fewof the returns from concessions leasing and theyincreasingly complained that their traditional political powers and roles indecision making had been lsquoeroded or bypassedrsquo (Dumett 1998 273)

Overall however itwas the capitalist expatriate companies lsquowhohadbecomethe real dispensers of wealth and fonts of authorityrsquo from the gold trade alongwith some African coastal concessionsmiddlemenmdashlike Joseph Dawsonmdashwhosometimes doubled as advisers to the kings and chiefs (Dumett 1998 275)That European mining companies were the main beneficiaries of gold miningduring this period is supported by the significant pressure they exerted on thecolonial government to create an environment conducive to their operationsthrough both the provision of infrastructure and a regulatory framework10 AsTsikata (1997 9) notes the interests of British mining companies had a signifi-cant influence on the formulation and implementation of mineral policy incolonial Ghana For example the passage of the Mercury Ordinance Law of1933mdashwhich banned the use of mercury in mining activitiesmdashwas facilitatedby British mining companies at home who pressured both the colonial officein London and the Gold Coast governor to create opportunities for theirentry into the Colony With the use of mercury banned mining activities bylocal populations were impaired This in turn weakened the control of chiefsbecause they lost leverage in terms of labour demands (Tsuma 2010 12)That this new law effectively criminalized small-scale mining also meant thatit contributed to the exclusion of significant segments of rural populations interms of the distribution of mineral wealth

Yet until the mid-1890s the colonial administration stoutly resisted pro-grammes for revenue-supported education andpublic healthmeasures onbehalfof the local populations on thegrounds that suchexpenditureswould saddle thecolonial treasury with huge debts (Dumett 1998 278) Where public invest-ments were undertaken as in the areas of infrastructure provision these wereoften done tohelp facilitate further resource extractionwith the result that areaswithout substantial mineral and other resources of interest to the colonial statewere excluded This is the origin of the contemporary northndashsouth inequalitiesin Ghana in which the north has remainedmuch poorer (Abdulai 2012 2017)

23 Post-independence Reforms and the Nationalizationof Mines 1957ndash85

After colonial rule most independent African governments engaged in aprocess of assuming total sovereignty and control over their natural resourcesand economies more broadly In addition all four countries discussed in thisbook experienced a nationalization of mining operations in this general time



164

period In Ghana the period 1957ndash86 was characterized by active stateinvolvement in the mining industry and other sectors of the economy Fol-lowing a series of laws in the early 1960s nearly all mining companies werefully nationalized and the State Gold Mining Corporation (SGMC) was estab-lished in 1961 to take over existing mines Various post-independent rulingcoalitions justified this lsquonationalization projectrsquo on the grounds of generatingmass employment and providing maximum access to the foreign exchangeobtained through the sale of minerals (Tsikata 1997)

One challenge faced however was the question of how to deal with theenduring control of chiefs over mineral-rich lands As already noted despite aseries of direct and indirect factors that contributed to the erosion of chiefsrsquoauthority during the colonial period rural areas remained largely under theirdominion at the end of colonial rule Yet within the overall framework ofcentralizing decision making and gaining total sovereignty over valuablenatural resources the first post-independent government under Nkrumahembraced the colonial mining legislation that vested all mineral-rich landsin the hands of the colonial governor

In 1962 the CPP-led Nkrumah government passed the Minerals Act(Act 126) which vested the ownership of minerals in lsquo the President onbehalf of the Republic and in trust for the People of Ghanarsquo (Tsikata 1997 10)This provision has found itself in various Ghanaian constitutions since 1969and has also been repeated in statutes such as the Minerals and Mining Lawof 1986 and subsequent amendments in 1993 and 2006 The Minerals Actand Administration of Lands Act (Act 123) both passed in 1962 also gavethe executive substantial powers to decide upon the use and managementof all lands including those owned by a community presided over by a chiefknown as lsquostool landsrsquo These laws further provided that payments in respectof stool lands be made not directly to the representatives of the owningcommunity but to the sector minister who would allocate portions forlsquothe maintenance of the traditional authority projects for the benefit of thepeople of the area and the local government bodies of the arearsquo (Tsikata1997) This arrangement has remained essentially the same today with onlyvery marginal changes

This era of state-owned mining witnessed a significant deterioration inGhanarsquos economic situation as the protectionist policies of various govern-ments strangled investments in the countryrsquos export sector more generallyLack of public and private investments left the state-run mines uncompeti-tive As a result the SGMC was operating at a loss and had to close downmost of its operations By 1982 gold output had declined to 232000 ozmdashapproximately one quarter of the 1960 output (900000 oz) The importanceof the mineral sector to the wider economy declined accordingly and in



165

1982 the sectorrsquos share of GDP was 03 per cent down from 25 per cent in1968 (Addy 1998 234)

24 Structural Adjustment and the Rise of MultinationalCorporations 1986ndash2008

While the 1982 PNDC government clearly marked a new political settlementit was only the pressures of deteriorating economic conditions and lsquothe polit-ical imperatives of regime survivalrsquo11 that led the quasi-military ruling elites toshift clearly to a neoliberal agenda and adopt structural adjustment in 1986As part of the SAP reforms the country took IMF and WB loans with con-ditionalities that included the privatization of the extractive industry Of theseveral policy initiatives adopted to revive the mining sector during thisperiod the most significant was the promulgation of the Minerals andMining Law (PNDC Law 153 of 1986) which among other things estab-lished a Minerals Commission to regulate the sector liberalized the miningregime and extended significant new benefits to private investors Thecontent of this law was driven significantly by the WBrsquos continent-widestrategy on mining (Akabzaa and Darimani 2001 Akabzaa 2009) whichdescribed the facilitation of private investment as lsquothe main objective ofdonor intervention in African miningrsquo (World Bank 1992 xii)

The new mining law provided a number of extensive tax incentives toforeign mining investors including generous capital and investment allow-ances that permitted 80 per cent of total investment to be written off inthe first year Mining companies could also maintain negotiated levels oftheir gross minerals sales in offshore accounts These measures coupled witha rise in gold prices sparked substantial new interest in the Ghanaian miningsector more than fifty-five gold prospecting licences were issued between1986 and 1989 (Campbell 1998 cited in Hutchful 2002 83) These reformsresulted in significant increases in mineral outputs (see Figure 51) enablinggold exports to regain prominence in the overall national economy Between1984 and 1995 gold exports as a percentage of total exports increased from22 per cent to 45 per cent (Tsuma 2010 23) However this period did notwitness greater inclusivity in Ghanaian society with regional gender andruralndashurban inequalities actually increasing throughout the 1990s (GhanaStatistical Service 2007) Nor did mining seem to have made any significantimpact on poverty reduction in mining-affected communities One WBinternal evaluation report reads

A field visit to Wassa District which contains the largest share of Ghanarsquos minesconfirmed the competition between mining and agriculture for arable landthe poor state of local infrastructure inadequate public services and high



166

unemployment The local economy in Wassa does not appear to have benefitedfrom large-scale mining through sustained economic growth and improvedpublic services Local people feel no perceptible benefit from the resourcesextracted from lsquotheirrsquo land (World Bank 2003 20)

The surge in multinational investment in the mining sector was accompaniedby a significant shift from underground to surface mining (see Map 51 for thedistribution of different types mining licence by 2014) Because surface min-ing requires the acquisition of large tracts of land this led to heightenedcompetition over land between companies and local residents The late1980s and early 1990s therefore marked the beginning of increased agitationfrom dissatisfied residents in mining communities12 At the same time thecapital-intensive nature of large-scale miningmeant that very few local peoplecould gain employment in the new mining economy

By the late 1980s the problem of land-use conflicts arising from localcommunity resistance had resulted in the promulgation of three laws aimedat bringing artisanal and small-scale (ASM) gold mining into the officialeconomy In 1989 and as part of the SAP reforms the Small-Scale GoldMining Law (PNDC Law 218) the Mercury Law (PNDC Law 217) and thePrecious Minerals Marketing Corporation Law (PNDC Law 219) were passedall in an attempt to legalize and regularize the previously illegal ASM sector13

Under PNDC Law 218 artisanal miners could apply for a concession of amaximum of 25 acres in designated areas and then obtain a licence to mine

0

500000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

1000000

1500000

2000000

2500000

3000000

Gold (ounces) Diamond (carats)

Bauxite (Mt) Manganese (Mt)

Figure 51 Key mineral production trends 1980ndash2008Source Based on raw data from the Minerals Commission Accra



167

B U R K I N A F A S ON

Tamale

Akyem MiningProject

Kumasi

Obuasi

Tarkwa ACCRA

AFRICA

Ghana

LakeVolta

G u l f o f G u i n e a

Cape Coast

IVORYCOAST

TOGO

Regional boundary

Mining licences

Reconnaissancelicences

Prospecting licences

0 100 km

Map 51 Geographical distribution of mining licences in Ghana 2014Source Oxfam America (2014)



168

through theMinerals Commission TheMercury Law legalized the purchase ofmercury from authorized sellers for purposes of gold production while PNDCLaw 219 established the Precious Minerals Marketing Company (PMMC) toprovide a market for small-scale mined gold (Tsikata 1997) Prior to this mostgold produced by ASM operators was smuggled to neighbouring countries(Addy 1998 Teschner 2012)

The 1986 law remained the substantive legislation for the mining sectoruntil its replacement in 2006 Here again the influence of transnational ideasand actors was very significant After more than a decade of its implementa-tion multinational mining companies and international financial institutions(particularly the WB) began to express dissatisfaction with the 1986 miningcode arguing that it could not compete with those of other mineral-endowedAfrican countries and that Ghana was losing investment to countriessuch as Tanzania Guinea and Mali which had far more liberal codes Thusin 2001 Ghana contracted consultants to review its mining code with theobjective of staying internationally competitive (Akabzaa 2009) The WorldBank (2008 32) described the resulting 2006 Mining Act as lsquomore investmentfriendly in line with international best practices in the industryrsquo For examplethe corporate income tax rate was reduced from 35 per cent to 25 per cent whilean additional profit tax14 of 35 per cent was scrapped altogether One conse-quence was that when mining companies began to make supernormal profitsfollowing rising commodity prices from the mid-2000s onwards there was nolegal basis for imposing additional taxes on them and the governmentrsquosattempt to introduce a new windfall tax backfired

The passage of this more liberal 2006 mining code was relatively straight-forward during the administrations of the NPP government under PresidentKufuor (2001ndash08) given the closeness of its lsquoproperty-owning democracyrsquoideology to the World Bankrsquos pro-business ideological perspective coupledwith the relative absence of a sustained and systematic challenge from Ghan-aian civil society Akabzaa (2009) notes that although the consultative pro-cesses leading up to the new act involved several actors within the miningindustrymdashincluding the Chamber ofMines traditional rulers a representativeof small-scale miners and the Third World Network which represented theNational Coalition of NGOs in Mining (NCOM)mdashthe uneven power relationsamong these actors resulted in domination by the mining companies Thuswhereas the draft act included several proposals that were submitted to par-liament by various civic actors subsequent lsquobehind the scenes consultationschanged the fortunes of the concerned community and civil society groupsrsquo(Akabzaa 2009 39)

While the privatizations of this period involved direct negotiationbetween multinationals as investors and the state as the owner of thesubsoil parallel developments involved direct negotiations between chiefs



169

and ASM operators Indeed the continuing influence of chiefs over land hasgiven rise to parallel systems of mineral licensing in Ghanamdashone formal(granted by the state to large-scale mining companies) and the other infor-mal (granted mainly by chiefs to illegal small-scale operators [Nyame andBlocher 2010 see also Section 5]) Under the present arrangements thoughall minerals are vested in the president much of the gold-bearing landsremain firmly under the control of traditional councils This dichotomybetween land rights and mineral rights has posed significant challenges forcontrolling illegal mining activities in Ghana as illegal operators continue toobtain lands from chiefs and other customary owners for their operations apoint to which we return later15

25 A Return to Resource Nationalism 2009ndash16

The period from 2009 to 2016 may be characterized as a return to the resourcenationalism of the early post-independence reforms This time however thegovernment resorted to various fiscal reforms that encouraged private mineownership to earn more revenue from natural resource extraction In 2009the NDC government introduced a National Fiscal Stabilization Levy whichimposed an additional 5 per cent levy on the profits (before tax) of compan-ies in certain industries including mining This was soon followed by anamendment to the Mining Act in 2010 The Minerals and Mining (Amend-ment) Act (Act 794) which provided for a fixed 5 per cent royalty rate acrossthe board and abolished the sliding 3ndash6 per cent scale provided in the 2006Mining Code However the most radical reforms were announced in the2012 national budget statement which proposed to increase the corporatetax rate by 10 per cent (ie to 35 per cent) and install a new windfall tax of10 per cent A seven-member Mining Review Committee was also establishedto review all mining agreements that were deemed detrimental to thenational interest

The boom in commodity prices was the most significant driver of thesefiscal reforms16 With rising commodity prices (see Figure 52) concerns overthe national interest were widely held up as a key political justification formany of the newly proposed policy reforms In presenting the 2010 budgetstatement the finance minister expressed concern that foreign multinationalcompanies had responded to the price hikes in gold by increasing productionbut without a corresponding contribution to government revenue (Republicof Ghana 2009 19)

The issue with mining is about fair and transparent sharing of the benefits andwindfall gains from the exploitation of the countryrsquos precious and irreplaceablenatural resources [D]uring the recent global financial crisis prices of gold cocoa



170

and oil reached their peak levels ever Yet the country did not benefit at all fromthe price hikes The Government has therefore taken a bold step to criticallyreview the fiscal regimes and mining agreements with the view to ensuring thatthe country benefits adequately and fairly from the gains in the mining sector(Republic of Ghana 2011 54)

A second important explanation relates to changes in transnational supportand ideas with both the World Bank and the IMF openly supportive of thegovernmentrsquos initiatives As the Chief Director of the Ministry of Energy andPetroleum told us in an interview lsquothis time the IMF and the World Bankwere rather actually on the side of governmentrsquo The soaring gold pricestriggered calls on the government from even the traditional architects of theliberalized mining regimes (ie the World Bank and the IMF) to raise certaintaxes in order to maximize the benefits of resource extraction (National Coali-tion on Mining 2011) In 2011 the head of the IMF mission in GhanaChristina Daseking specifically recommended that Ghanaian authoritiesexplore ways of improving tax revenues from the mining sector stating thatthe fund lsquosupported adoption of additional tax policymeasures particularly inthe area of natural resourcesrsquo (Quandzie 2011)17

There is also evidence to suggest that the new tax reforms were reflective ofand partly driven by the social democratic philosophy of the NDC rulingcoalition and the partyrsquos recognition of lsquodistributive justicersquo as an importantguiding principle for its approach to governance (NDC 2004) As far back as2008 when the party was in opposition it emphasized the need to redefinethe role of mining in the national development agenda

0

200

400

600

800

1000

1200

1400

1600

1800

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

US$

tro

y o

unce

Figure 52 World gold price (US$troy ounce) 1968ndash2016 Price based on 995 fineafternoon fixing LondonSource UNCTADSTAT (2017)



171

Specifically it highlighted the need to lsquooptimise national benefits orretained earnings from mining investment in the countryrsquo bylsquo[s]trengthen[ing] the mining fiscal regime to capture more rent for the state and miningcommunities through greater State carried interest higher royalties and morerealistic resource rent-based taxationrsquo (NDC 2008 58)18 That these pledgeswere made by a party in opposition makes it difficult to interpret suchpronouncements as purely instrumental attempts to secure greater miningrevenues to address fiscal constraints and gain re-election Importantly thesepledges differed substantially from those of the more pro-business NPP rulingcoalition at the time whose 2008 election manifesto pledged to further cutcorporate taxes in order lsquoto encourage and support businessesrsquo (NPP 2008 6)This analysis suggests that responses to resource booms are driven notonly by the degree of stabilityvulnerability of ruling coalitions (Poteete2009) but also by the ideological orientation of dominant elites withinsuch coalitions

That said most interviewees suggested that material interests played a moresignificant role in motivating the new tax reforms than the ideological orien-tation of the NDC ruling coalition According to one interviewee in theMinistry of Lands and Natural Resources at the peak of the mining boomlsquothe government was in a tight corner and needed money they needed tocome up with a way of dealing with the fiscal gapsrsquo With mining increasinglyreplacing cocoa as the lsquocash cowrsquo of successive ruling elites the intervieweeasserted that lsquothe government didnrsquot have any other option than to look at thenatural resources sectorrsquo The respondent further noted that it was this over-riding need for cash that explained why the reforms were initiated and cham-pioned by the Finance Ministry rather than the Ministry of Lands andNatural Resources which has a direct mandate over mining activities

Implementation of the governmentrsquos proposed reforms was patchy how-ever with the windfall tax not implemented at all due partly to intensepressure from mining companies19 At the 2014 World Economic Forum inDavos the Ghanaian president at the time John Dramani Mahama notedthat his governmentrsquos suspension of the windfall tax was based on companiesrsquothreats to cut off jobs and shift their production investments to other coun-tries lsquoThey threatened to lay off workers if we implemented the windfall taxand because we needed the jobs and you donrsquot want workers laid off you arecoerced to go alongrsquo (Ghanaian Chronicle 2014) Some key industry actors alsoattribute the suspension of the windfall tax mainly to lsquobad timingrsquo (Aryee2014) in that just when the government began to introduce it gold pricesbegan to dip undermining the governmentrsquos argument for the tax (ibid)The fact that other African countries (eg Mali) were reducing tax rates at thesame time lsquoput additional restraining pressures on the governmentrsquos reformdirectionsrsquo (ibid)



172

This said as shown in Table 53 it is important to note that the 10 per centincrease in the corporate tax rate and the 5 per cent royalty rate have beeneffectively implemented since 2012 contributing to improved governmentrevenues from mining However the table also shows that as gold pricesstarted to decline from 2013 onwards government revenues from corporateincome taxes as well as the mining sectorrsquos overall contributions to revenuescollected by the Ghana Revenue Authority (GRA) also began to dwindle evenas gold output remained fairly high and continued to increase until 2015 Thisunderscores how global commodity price fluctuations can place major strainson the public finances of resource-dependent countries like Ghana withpotential implications for the development imaginaries of ruling elites Asone of our respondents aptly put it lsquoGhana depends so much on the miningsector that as soon as prices of minerals fluctuate our budget has torsquo20

The period of the boom coincided with increased government revenue frommining and significant declines in the incidence of poverty and extremepoverty in Ghana Indeed by the early 2010s the mining sector contributed37 per cent of export revenues and 19 per cent of all direct tax paymentsmaking it the largest tax paying sector in the Ghanaian economy (GhanaChamber of Mines and ICMM 2015) Meanwhile between 2006 and 2013the estimated national poverty rate fell from 319 per cent to 242 per centwhile extreme poverty declined from 165 per cent to 84 per cent during thesame period These reductions enabled Ghana to emerge as the first country insub-Saharan Africa to meet the first target of the Millennium DevelopmentGoals of halving extreme poverty by 2015 The three poorer northern regionsin particular made substantial progress in poverty reduction which translatedinto a reduction of regional income inequalities during this period (seeTable 54) However there remain significant disparities in poverty levels

Table 53 Gold production and government revenue from mining (GH₵ 2005ndash15)

Year Gold production(ounces)

Royalty Corporatetax

PAYE Total miningcontribution toGRA

Miningto totalGRA

2005 2149372 23595 2698896 19405894 72285749 11212006 2244680 31625 4043618 21652578 74822760 10202007 2486821 40882 47415690 34587597 123021866 14422008 2585993 59005 73554697 47139242 179978383 15322009 2930328 90416 124600880 103061985 319022676 18212010 2970080 144697 241578780 132469710 519682174 21292011 2924385 222024 649902536 161822107 1034221712 27612012 3166483 359392853 893773828 207495934 1461202977 27042013 3192648 364673038 518545259 220131571 1104047315 18712014 3167755 470356949 441235059 259459815 1172117330 15382015 2848574 485632657 463128598 404743477 1354379971 1490

Source Data from the Minerals Commission Accra see also Ghana Chamber of Mines (2016)



173

between different socio-economic groups rural and urban areas and the threehistorically poorer northern regions and the rest of the country

Whether the growth in mining revenues contributed to this trend is how-ever an entirely different question Direct causality between mining andinclusive development is difficult to establish because mining revenues inGhana are not set aside for specific development investments but are insteadchannelled directly into the consolidated fund for general budgetary supportHowever the available evidence suggests that the increased revenues frommining along with the commencement of commercial oil production in2010 did influence the developmental imaginaries of the ruling elites Thisis evidenced in the introduction of several special social intervention pro-grammes aimed at increasing public expenditure on initiatives targeted atthe poorest and the most vulnerable Much of the recent poverty reductionin Ghana has been attributed largely to high GDP growth rates supported byincreased government development expenditure In particular specific inter-ventions such as the launch of the Savannah Accelerated DevelopmentAuthority (SADA) in 2010 and the Livelihood Empowerment against Poverty(LEAP) have helped to reduce poverty in the poorer northern regions21 Witha goal of doubling incomes of northernGhanaians and reducing the incidenceof poverty to 20 per cent within twenty years (Government of Ghana 2010)SADA has been widely recognized as the most comprehensive effort towardsthe reduction of the northndashsouth developmental disparities in Ghanarsquoshistory The LEAP is Ghanarsquos flagship cash transfer programme that providesbimonthly cash benefits for extremely poor families which also have at leastone member that is elderly (those above sixty-five years) disabled and unableto work or an orphan or vulnerable child (OVC) Figure 53 shows the budget-ary allocations to LEAP between 2010 and 2016

We are not suggestinghere thatmining revenues have always been expendedinways that help reduce poverty and inequality inGhana On the contrary thedistribution of power in Ghanaian society and the competitive clientelism thatit produces have significantly undermined the effective utilization of mining

Table 54 Poverty trends in Ghanarsquos poorer northern regions and the country as a whole2005ndash13

Poverty incidence ( of population) Extreme poverty incidence ( of population)

200506 201213 200506 201213

Northern 557 504 361 228Upper East 729 444 569 213Upper West 891 707 760 451

Ghana 319 242 165 84

Source Ghana Statistical Service (2014)



174

revenues for fostering greater inclusion and for the pursuit of the nationalinterest more broadly (see also the next section) For example while greateraccess to mineral revenues might have enabled the government to launch anumber of social intervention programmes most of these including the LEAPsuffer from politically motivated poor targeting benefiting the better-off farmore than the poorest (Jones et al 2009Wodon 2012 Debrah 2013 Abdulaiand Hulme 2015 Abdulai and Hickey 2016) As shown in Figure 54 whereasoverall poverty levels fell by 275 percentage points between 199192 and

0

10

20

30

40

50

60

2010 2012 2014 2016

GH

C| m

illio

ns

Figure 53 Budgetary allocations (GH₵ millions) to LEAP 2010ndash16Source MOFEP (2017) NDPC (2017)

034

035

036

037

038

039

04

041

042

043

0

10

20

30

40

50

60

19912 19989 200506 201213

Gin

i co

effi

cien

t

Pove

rty

inci

den

ce (

)

Poverty incidence () Gini-coefficient

Figure 54 Poverty and inequality trends Ghana 1991ndash2013Source Government of Ghana (2014 18)



175

201213 Ghanarsquos Gini coefficient has consistently been increasing since theearly 1990s The government of Ghana acknowledges these rising levels ofinequality as a major problem describing it as lsquoa dangerous sign that thepoverty reduction effort is not being properly targeted at those who need itmostrsquo (Government of Ghana 2012 22)

3 Competitive Clientelism and Mining Sector Governance

Most Ghanaian scholars attribute the limited impact of mining on broad-based development to the absence of a long-term plan for guiding the efficientutilization of mineral rents It is argued that policy reforms have focusedalmost exclusively on revenue generation from mining but lsquowithout a policyfor long-term investmentrsquo (Ayee et al 2011 36) Mineral rents have oftenbeen expended in a way that lsquodoes not recognize the need to convert mineralrevenues into long-term physical and human capitalrsquo (Ghana Chamber ofMines and ICMM 2015 51) In addition as one interviewee noted thegovernment often lsquo[collects] mineral royalty in cash and [spends] it in thenext budgetrsquo22 This leaves the mining sector as an lsquoeconomic enclaversquo(Akabzaa 2009 51 Bloch and Owusu 2012) These dynamics are indicativeof a competitive clientelist settlement a designation which helps to explainGhanarsquos natural resource governance over time

Elite commitment to investing mineral wealth in long-term development isshaped by the degree of stabilityvulnerability of ruling coalitions (Poteete2009) In competitive clientelist settlements where ruling political elites feelthat they are unlikely to stay in power long enough to reap the benefitsof accumulated investments incentives are geared towards the use of mineralrents in securing short-term political gains As Levy (2014 35) reminds us acompetitive clientelist political settlement is based on a credible prospect ofpower alternation such that lsquowhichever faction is in power is likely tohave a short time horizonrsquo Ghanaian politics has developed into a highlycompetitive and antagonistic game in which each round of elections has seenone of the two dominant parties lsquohorizontally excludedrsquo from power Rulingcoalitions therefore tend to be confronted by high levels of horizontalopposition of the powerful elite bloc left out of power This political contextincentivizes political elites to focus on initiatives that enhance prospects fortheir short-term political survival

Whitfield (see Whitfield et al 2015 Whitfield 2011a 2011b 2018) hasshown how this form of politics has rendered Ghanarsquos quest for structuraltransformation elusive during the past several decades She shows that politicalsurvival strategies have included distributive consumption-driven expend-itures designed to deliver resources and economic opportunities to higher and



176

lower level factions of the ruling coalition as well as visible goods andservices to asmuch of the population as possible in an effort to lsquoswingrsquo voterstheir way Whitfield notes that these expenditures depleted the wealth ofthe country without reproducing it much less expanding it She furtherargues that one consequence of these actions has been the absence ofsustained political commitment to developing the productive sectors of theeconomy which are critical for structural transformation and broad-baseddevelopment

These dynamics are particularly evident in the absence of a long-termdevelopment plan in both the mining sector and the economy as a wholeOne key industry observer interviewed for this project noted

Do we even have a long-term vision for the whole country We donrsquot Thewinner-takes-all factor in our politics makes it necessary for everybody to thinkabout the short-term political interestmdashthat is his political survival party and hisinterestmdashand as a result does not look beyond an electioneering period

Another interviewee in the Ministry of Lands and Natural Resourcesexplained the challenge of a mining-led development in Ghana in terms ofdiscrepancies relating to lsquogovernmentsrsquo short-term views versus the long-termview of miningrsquo He elaborated the point as follows

You have a mine which will probably operate for 20ndash50 years You have thepotential to ensure that it interfaces with the rest of the economy and creates aneconomic activity which is much bigger than the mine itself Yet you elect agovernment which is going to be in place for four to eight years maximum If youare in charge of that government what will you do You are looking for benefitsnow to help you run your government you are not looking for creating a base foryour opponents to come and take the benefits

Thus while a national mining policy was fully drafted in 1994 it was notactually launched until 2016 The interviewee noted that this apparent lack ofelite commitment towards a long-term development vision for mining hasmeant that regulatory frameworks within the industry have rarely beenaccompanied by a policy to guide day-to-day implementation

When you have natural resources your long-term vision is important Onceyou have your long-term vision you now look at the policy that will take youto your long-term vision Your policy will have specific objectives Theseobjectives will be pursued by the laws you put in place And then you haveregulations which will detail out how the various provisions in the law are tobe interpreted and applied But here is the case in the mining sector we have[had] a Minerals and Mining Act passed in 2006 We are in 2014 and what wehave is a draft mining policy So we put the act in place before thinking aboutpolicy So all this while what policy objectives has the law been pursuing



177

Circumstances are similar in the hydrocarbons sector Indeed the PetroleumRevenue Management Act (PRMA) requires that spending of oil revenuesbe guided by a medium-term framework aligned with a long-term nationaldevelopment plan Yet after seven years of commercial oil productionsuch a plan remains absent allowing the continuous discretionary util-ization of petroleum revenues by ruling political elites Recent andongoing attempts by the National Development Planning Commission(NDPC) to launch a legally-binding forty year development plan wereinitially met with stiff opposition from the two main political partieson the grounds that such a plan would constrain their ability to imple-ment their party manifestos Kwesi Botchwey then Chairman of theNDPC recalled how a government white paper lsquohad attempted to sidelinethe call for long-term development planningrsquo and President Mahamasubsequently insisted that any such lsquolong-term development plan musthave a flexibility to accommodate political and ideological orientationsrsquo(Joy Online 2015)

The preference for a high level of discretion for politicians in Ghana is alsoevident in the negotiation of mining agreements and in the allocation ofmining licences Under Ghanarsquos mining laws the minister has the power tolsquonegotiate grant revoke suspend or renew mineral rightsrsquo (Minerals andMining Act 2006 Section 5[1]) Mineral licences are to be issued to companieslsquoin the form and conditions determined by the ministerrsquo (ibid Section 6[3])who also has the powers to enter into stability agreements with miningcompanies Holders of such stability agreements are to be insulated fromsubsequent changes relating to the payment of customs or other dutiesroyalty rates taxes fees and other fiscal imports as well as laws relating toexchange control transfer of capital and dividend remittance for a period ofup to fifteen years (ibid Section 48)

Such powers have enabled the minister to enter into what some deemhighly questionable agreements with mining companies as with fiscal stabil-ity agreements with Newmont Ghana and AngloGold Ashanti during the2000s which give the two companies (which together account for two-fifthsof total gold output Boakye et al 2012 12) protected tax benefits Thusalthough the mining law pegs royalty payments on a sliding scale of 3ndash6 percent Newmontrsquos stability agreement fixes its gross royalties on gold produc-tion at the lowest allowable rate of 30 per cent23 Companies without stabilityagreements now have a corporate tax rate of 35 per cent compared to a ceilingof 325 per cent set in Newmontrsquos agreement with the government Thecompany is also exempted from the payment of value-added tax (VAT) onall items it imports and for all foreign and locally purchased services andsupplies to the extent that they are used in connection with operationsMoreover contrary to the provisions of the Mining Code which mandates a



178

minimum 10 per cent equity stake for the state the Ghanaian governmenthas no stake in Newmontrsquos operations

Available evidence also suggests that the signing of such confidential stabil-ity agreements tends to occur during or just prior to election years A furtherexample from the oil sector is the lsquoscandalously generousrsquo (Phillips et al 2016 30)deal with Kosmos Energy in 2004 which many believe was meant to generatekickbacks for allies in the Kufuor-led NPP ruling coalition Industry analystsestimated that the Kosmos contract would mean the government would loseUS$38 billion in tax revenues over the lifespan of theWest Cape Three Pointsoil block in comparison to Tullow Oilrsquos terms for the adjacent DeepwaterTano block (Wood Mackenzie 2012 cited in Phillips et al 2016) Ayee et al(2011) also argue that overgenerous concessions granted to some miningcompanies may have been granted lsquoas a reward for political support andfinancial kickbacksrsquo (2011 21) These observations need to be understoodwithin the context of the highly competitive form of patronndashclient electoralpolitics in Ghana where lsquobig business interests seem to be particularly strongwith their influence deriving from personal relationships and the funding ofpolitical campaignsrsquo (World Bank 2009 28)

A final indication of the clientelist nature of relations between state institu-tions and mining companies stems from a Mining Review Committee chairedby Professor Akilapka Sawyer The government established the seven-membercommittee following resistance by somemining companies (specifically thosewith stability agreements) to the governmentrsquos decision to raise taxes in themining sector The tasks of the committee were to review and renegotiate anypart of the stability agreements between the country and mining companiesand redesign existing or draft agreements to ensure that they yielded bettersocial and economic returns for the state

In 2013 Sawyer hinted that the committee was facing significant difficultiesbecause of the nature of the relationships between the state and miningcompanies involved He noted that lsquothe Committee has realised that thegovernment at times raises resources from some mining companies andthat such relationships have affected their negotiationrsquo (Daily Express 2013)These observations give some credence to suspicions that competitive clien-telism has meant that the tendency of political leaders to bypass bureaucratsinmineral resource contractual processes in order to reach politically desirabledecisions and of ruling party members of parliament (MPs) to rush throughmajor mineral resource agreements has lsquobecome the normrsquo in both the min-ing and oil sectors (TWN-Africa 2016 2 see also Hickey et al 2015 Mohanand Asante 2015) Thus whereas the generally lsquodisappointingrsquo impact ofGhanarsquos mining sector has sometimes been blamed on the weak capacity ofregulatory institutions such as parliament (Ayee et al 2011 6 see also Atta-Quayson 2012) we argue that such weaknesses are the direct result of the



179

mutual interests between ruling party MPs and the executive The weaksupervisory role of the Ghanaian parliament is much more political thantechnical suggesting that such weaknesses are unlikely to be effectivelyaddressed through technical capacity building alone

4 The Politics of CentralndashLocal Relations in GhanarsquosMining Governance

One of the great challenges in Ghanarsquos mining governance has consistentlybeen that of aligning national aspirations with what is politically feasibleat the local scale This dilemma manifests itself in several ways one ofwhich is the phenomenon of ASM discussed in the next section This sectionaddresses the particularly complex centralndashlocal politics that surround (1) therelationships between national authorities and chieftaincies in determiningcontrol of access to the subsoil and (2) the distribution and use of revenuesgenerated by mining As we will see the first of these issues affects the second

41 Chiefs Politicians and the Land Question from theLate Nineteenth Century to the Present

The extreme dispersion of power in Ghanaian society and the competitionthat it generates has involved traditional authorities throughout Ghanarsquospost-colonial history To this extent an historicized understanding of therelationship between chiefs and politicians is central to comprehending thepolitics of natural resource governance in Ghana from a longue dureacutee perspec-tive and in particular to assessing centralndashlocal relations in governing themining economy Indeed Amanor (2008 2009) traces the political influenceof chiefs in present-day Ghana to the failed attempts of the British colonialadministration to control land and vest it in the colonial state and to theultimate creation of a system of indirect rule based on Native Authorities andchiefly rule

One of the early concerns of British colonial rule was how best to vest allunoccupied land in the British Crown This concern arose mainly from thecolonial governmentrsquos fear that foreign companies would acquire the landthrough speculation and by purchasing concessions from local chiefs duringthe mining boom In 1894 the colonial government attempted to enact aCrown Lands Ordinance which would place lsquowaste land forest land andmineralsrsquo under the British Crown and enabled the colonial government togain control over the granting of concessions (Omosini 1972 Wardell 2006)However this wasmetwith considerable resistance and oppositionmanifestedin the formation of the Aborigines Rights Protection Society (ARPS) in 1897



180

The ARPS was an alliance of chiefs and business and intellectual elites on theGold Coast that was formed to defend African rights over the land

After decades of similarly unsuccessful attempts to take control over theadministration and allocation of land rights colonial administration wasultimately established through an alliance with traditional rulers organizedinto Native Authorities24 This system of indirect rule brought chiefly familiesinto the ruling coalition effectively as lower-level factions that could main-tain political support for British ruling elites The establishment of the NativeAdministration system resulted in the creation of lsquoa neo-traditional elitersquo inthe Gold Coast (Whitfield 2018) whereby lsquoChiefs became responsible forappropriating land for public works forest reserves mining and timber con-cessions and allocating land to farmers for export crop productionrsquo (Amanor2009 102 see also Amanor 2008 60)

However the indirect rule policy through which the colonial powers gov-erned in collaboration with chiefs was to become a major source of rivalrybetween some traditional leaders and the educated elite during the decolon-ization processes The CPP the dominant nationalist party that led Ghana toindependence led a campaign against the chiefsmdashwith some even pushing toabolish chieftaincy altogethermdashby drawing support from local youth groupsand opportunistically exploiting local conflicts (Crook 2005) After independ-ence in 1957 however Nkrumah followed a more complicated strategy court-ing chiefs who supported him while punishing his opponents (Berry 2008)As Berry states this punishment included lsquostripping themof administrative andjudicial authority confiscating their stool lands and putting some of their mostoutspoken opponents in prisonrsquo (ibid 41)

The military regime that overthrew Nkrumah in 1966 released his jailedopponents and restored their confiscated lands and their successors varied intheir reactionsmdashfrom tacit acceptance to open support of chieftaincy as atime-honoured institution (Berry 2008) With chiefs becoming an importantsource of political support and legitimacy for each new set of ruling elites theNRC which came to power in 1972 lsquoconstructed a centre of political gravitybased on amilitaryndashbureaucraticndashchief alliancersquo (Chazan 1982 464) In effectpost-independence governments retained the customary land ownership andtenure system constructed during the colonial period which gave chiefs andtheir traditional councils control over access to land and enhanced theirauthority It is important to make clear therefore that the institution ofchieftaincy not only survived in this period but gained strength after the1966 coup Chiefly authority over land was reaffirmed in the 1969 constitu-tion which restored chiefsrsquo authority to allocate land rights and receive landtribute The 1979 constitution went further to emphasize that the centralgovernment had no right to recognize or refuse to recognize chiefs as thiswas the sole right of the community (Whitfield et al 2015)



181

With the general vulnerability that characterized all subsequent politicalregimes after Nkrumahrsquos overthrow elections provided important momentsfor politicians to strike new deals with chiefs in order to expand their electoralcoalitions One good example was a deal struck by the I K Acheampongmilitary government (1972ndash78) with chiefs from the countryrsquos Northern andUpper regions in the run-up to a national referendum in the late 1970s(Chazan 1982) Another example is Jerry Rawlingsrsquo deal with chiefs as thecountry was preparing to a return to multiparty democracy in 1992 Duringthe 1980s the Rawlings-led PNDC government initially challenged theauthority of chiefs over land especially in the important cocoa-growingareas But by the early 1990s when the return to multiparty rule was immi-nent chiefs in the affected cocoa areas and the PNDC struck a bargain chiefshelped mobilize support for the party and the government allowed chiefsunfettered control over the land (Whitfield et al 2015 130) The continuingpolitical influence of chiefs is also clear in the dynamics surrounding thedistribution of mining royalties from which they benefit directly for theirpersonal accumulation as part of an elite bargain

42 The Subnational Politics of Revenue Distribution

The success of any mineral-led development strategy depends mainly on theshare of revenues captured by national governments and the modalities thatgovernments adopt in managing and distributing those revenues (Akabzaa2009) Mining sector revenues in Ghana are obtained mainly from royaltiescorporate and personal income taxes and the withholding tax on dividendsand foreign outsourcing Mining taxes (both corporate and personal) anddividends accrue directly and solely to the central government while mineralroyalties are distributed between the centre and subnational authorities

Figure 55 summarizes how mining revenues are distributed in Ghana Rev-enues from mining royalties are collected by the large tax unit of the InternalRevenue Service which then dispenses themoney into the consolidated fundOf this sum 80 per cent is retained by the government and used for generalbudget support while the remaining 20 per cent is paid into a mineraldevelopment fund (MDF) which was established in late 1992 through anlsquoexecutive fiatrsquo (Republic of Ghana 2013 21)25 The 20 per cent allocated tothe MDF is divided further in two half (representing 10 per cent of totalroyalties) goes to the Minerals Commission and the Department of Mineswhile the Office of Administration of Stool Lands (OASL) receives the remain-ing half The OASL is charged with overseeing stool land The OASL dispensesits allocated sum directly to beneficiary institutions at the subnational levelaccording to a formula outlined in the 1992 constitution and reinforced bythe Minerals and Mining Act of 2006 This stipulates that the office retains



182

10 per cent of the monies (or 1 per cent of total royalties) to cover adminis-trative expenses while the remaining 90 per cent (9 per cent of total royalties)is distributed as follows

25 per cent to the stools through the traditional authority structure forlsquothe maintenance of the stool in keeping with its statusrsquo

20 per cent to the chiefs or other traditional authorities and

55 per cent to the district assemblies located within the area of authorityof the stool lands (Republic of Ghana 1992)

Thus with all taxes and 90 per cent of mineral royalties being retained at thenational level current procedures are inherently biased towards the centralgovernment and away from mining communities This is particularly evidentin comparison to Peru (see Chapter 2 Subsection 3321 this volume) wherethe central government distributes half of its mining income tax revenues tothe subnational areas that host mining operations

The disparity between the statersquos share of royalties and that of miningcommunities has long been the basis of public grievances in the miningsector Chiefs and mining companies have repeatedly demanded an increasein the share of mineral royalties going to local communities In August 2016one chief went so far as to advocate that all stoolsrsquo share nationwide be paid tothem directly by companies (as was the case in pre-colonial Ghana) rather

Centralgovernmenttreasury

ThroughMinistry ofFinanceInternal

RevenueServices(IRS)

Office of theAdministratorof Stool Land(OASL)

Retains 1 foradministrative cost

10

225

18

495

80

10

ThroughregionalOASL offices

9

DistrictAssemblies

Traditionalauthorities

Stools(customaryland titleowner)

MineralDevelopmentFund (MDF)

Figure 55 Distribution of mining revenues in GhanaSource Adapted from Boampong (2012)



183

than being channelled through the central state (Ghana News Agency 2015Swanzy 2016) Yet such demands have remained unsuccessful in the face ofan overall settlement among national political elites agreeing that miningrevenues be centralized as well as evidence of the misapplication of mineralroyalties by subnational authorities We will discuss this further in Subsections421 and 422

421 IDEAS INTERESTS AND THE CENTRALIZATIONOF MINING RENTSPolitical elite consensus regarding the centralization of mining revenues has along history in Ghana26 motivated by a combination of central elite incen-tives for access to a greater share of mineral rents and ideas about sovereigntyand national unity Throughout the history of post-independence Ghana thedominant idea articulated by both political elites and citizens is the notion ofGhana as a unitary state In terms of natural resources this idea is manifestedin a belief that the state is best placed to exploit minerals and hydrocarbonsand to share the benefits with its citizens and regions Onemining governanceexpert interviewed in Ghana traced this idea to the nationalist movementsof the late 1940s and early 1950s a period during which lsquothe control ofnatural resources was seen as a great gain of the anti-colonial movementrsquo Hecontinued

In many of our countries colonial companies controlled the resources So [afterindependence] being able to now say that the nation owned the resources was animportant political statement and also that these resources would be applied tonational development Now if there is national ownership and the idea is that theresources are held in trust for the people by the state how do you establish a basisfor special treatment of a particular region

Within this overall discourse of lsquonational ownershiprsquo allocating dispropor-tionate shares of mineral rents to regions of extraction is generally seen ashaving the potential to foster divisive tendencies and as a consequenceundermine national political stability Thus although mining activities inGhana have long been spatially concentrated in the Ashanti and Westernregions revenues generated from mining have historically been channelledfor direct budgetary support and utilized without any recourse to the areas oftheir derivation At the local level such ideas also help explain why revenuesfrom the MDFmdashwhich are meant to help mitigate the environmental costs ofmining in affected communitiesmdashare sometimes extended to benefit non-mining communities (Quarshie 2015) More broadly it was also partly onthe basis of such ideas about national unity that recent demands from chiefsfrom the oil-richWestern region that 10 per cent of oil revenues be earmarkedfor developmental projects in their region were generally rejected by elites



184

across the political divide As the Minister of Lands and Natural Resourcesexplained in an interview

Could you imagine what would have happened if government had evenentertained the idea Obuasi will rise up the Akyem people (referring toNewmont Mines in New Aberim) will rise up and ask what about usGovernment will be fighting fires everywhere I believe strongly that we need tocollect the revenues to the centre and distribute This is the only waywe can ensurewe stay together as a state We can hold the country together

Such ideas have endured throughout post-colonial Ghana in large partbecause it is also in the material interests of ruling elites to keep revenuescentralized so that they can control their distribution and uses Within thecontext of competitive clientelism the suppression of subnational challengesto how mining rents are distributed also enhances the prospects for themaintenance of ruling coalitions through patronage spending

422 MISAPPLICATION OF ROYALTIES BY SUBNATIONALAUTHORITIESThere is ample evidence thatmineral royalties tend to be lsquomisusedrsquoby bothchiefsand district assemblies (DAs) providing opportunities for the centre to justify itscontinuous centralization of revenues Official government sources suggest thata large portion of the royalties received by theDistrict Assemblies is often appliedto expenses not intended by the distribution scheme (Republic of Ghana 201342)27 Indeed of some GHC 674 million of mineral royalties received by thethree highest beneficiary District Assemblies during 2004ndash09 only GHC 069million (142 per cent) was spent on health water and sanitation and wastemanagement land degradation and alternative sources of livelihoodsmdashall areasdirectly affected by mining activities Most beneficiary assemblies were found tohave lsquoutilised MDF either in whole or partly for varied projects which do notmitigate the harmful effects of miningrsquo (Republic of Ghana 2013 iv)

Moreover lsquo[t]here is strong evidence that the payments to traditional coun-cils and stools tend to finance expenditures other than those that benefit thelocal communities involvedrsquo (ICMM 2007 77) In some cases chiefs lsquohavespent some of their mining royalties on erecting new palacesrsquo (Boampong2012 2) and on ceremonial clothing for the chief (CHRAJ 2008) Part of theproblem here relates to provisions of the 1992 constitution which states thatrevenues accruing from stool lands lsquobe used to maintain the stool in keepingwith its statusrsquo In one stakeholder workshop on mining traditional author-ities took advantage of this constitutional provision to argue that their shareof mineral revenues is lsquonot meant for development projectsrsquo (Aterkyi 2007 4)Moreover as part of the Ghana Extractive Industries Transparency Initiative(GHEITI) the Minerals Commission drafted a template that sought to help



185

chiefs report on their mineral royalty expenses but the chiefs respondedso harshly that the Commission lsquohad to backtrackrsquo28

The important question therefore is why have political elites in Ghanacontinued to allocate mining revenues to local chiefs despite clear evidencethat such resources do not contribute significantly to the well-being of localpopulations One explanation is that there is a lsquogenuine uncertainty as tothe ldquoappropriate purposerdquo of distributing mining revenues to chiefs inGhanarsquo (ICMM 2007 77) We contend however that two related factorslie behind this both underpinned by Ghanarsquos competitive clientelist politicalsettlements the logic ofmaintaining social order due to the significant leverageof traditional authorities over mineral-rich lands and the desire of ruling elitesto win and maintain political power through the support of chiefs

As a result of the historical power struggles between politicians andchiefs over mineralized land since the colonial period land ownershipremains complex in Ghana There are two main categories of land ownershiptodaymdashnamely state lands compulsorily acquired by the governmentthrough the invocation of appropriate legislation and vested lands belongingto customary authorities (stools skins clans and families) Vested ownershipentails allodial and user rights that are vested in paramount chiefs whocontrol access over the land on behalf of a community In all more than 80per cent of land in Ghana is under the control of chiefs (Ministry of Lands andNatural Resources 2011 1 World Bank 2013 1) implying that most mineraloperations both by large-scale companies and ASM operators occur on stoolland (Tsikata 1997 Nyame and Blocher 2010)

Consequently although mineral resources in Ghana are entrusted in thehands of the president on behalf of the people the state depends substantiallyon chiefs for access to land and governments often plead with chiefs to releaselands for development projects Chiefs have turned their control over landinto widespread de facto power at the local and national levels effectivelyutilizing it to exact tribute both frommining companies and the governmentThus the allocation of mining revenues to traditional leaders by the centralgovernment needs to be understood as a co-optation strategy aimed at enhan-cing the cooperation of traditional authorities with ruling political elites so asto maintain the stability of ruling coalitions In other words it is primarily thecapacity of chiefs lsquoto cause troublersquo that has historically entitled them to ashare of mining revenues As one mining sector activist stated in an interview

If you look at the history of how what has been given to local communitiesthrough the chiefs has been spent it has nothing to do with communityinterest the chiefs take it as their entitlement and the state allows that as part ofa compromise So in a way this is a continuation of the intra-elite struggles overthe distribution of public resources



186

One respondent described the allocation of mining royalties to traditionalauthorities as lsquoa pay-out to chiefs to keep them quietrsquo elaborating further thatlsquothe idea is to silence them because chiefs can be very significant troublemakers In the gold-producing areas the chiefs continue to wield somepower and if they are not sorted out they can be a problemrsquo29 These obser-vations echo suggestions that in countries characterized by lsquolimited accessordersrsquo the stability of ruling coalitions requires the distribution of rents tomembers of a lsquodominant coalitionrsquo in ways that create incentives for elites tocooperate among themselves rather than fight (North et al 2009)

In the Ghanaian context such distributional strategies are also influencedby historical memories of the pre-colonial era when mining royalties servedas a key source of power and local control for chiefs As Dumett (1998 45)reminds us of the pre-colonial Ghanaian context the power of chiefs overmineralized land was such that lsquowhenever a local chief granted the right to astranger to mine for gold on stool lands the omanhene as paramount rulerwas entitled to a one-third or abusa share of the proceedsrsquo One respondentechoed this point

Historically the chiefs gave the concessions to gold companies and collectedroyalties So in the memory of the traditional elites there is this thing abouthow once upon a time they were the ones collecting the royalties30

In this context the Ghanaian experience also illustrates the importance ofhistorical memories around natural resource governance whereby lsquothe waysin which history is recounted and remembered can constitute an importantvariant of how ideas matter in struggles over the governance of extractionrsquo(Bebbington 2015 107)

The second reason the central government maintains payments to subna-tional leaders is the importance of chiefs for winning elections and politiciansrsquodesire to court the political support of traditional authorities While chiefs areconstitutionally barred from taking partisan positions many have continuedto flout this with impunity mainly because of their capacity tomobilize votersin support of ruling political elites (Fox et al 2011) Indeed Crook (2005)states that lsquoTheir power and authority are such that they are often more likelyto be listened to than any politicianrsquo (2005 4) As one government employee inthe OASL stated

If you are a government and you donrsquot give that recognition to chiefs you are onyour way out of office very quickly You know the politicians go and solicitsupport from chiefs because whether you like it or not the chiefs still haveinfluence over the people And if you are a politician and you donrsquot recognizeand respect chiefs that will be a big big trouble for you



187

Together this means that politicians across the political divide lsquoare ready toldquopurchaserdquo the allegiance or interest of local traditional leaders through thepatronage available to them in return for the influence over local votingthat they can deliverrsquo (Coffey International Development 2011 30)31 Thedistribution of mining revenues is one typical example of such clientelistalliances between political leaders and traditional authorities Moreover com-petitive clientelism has meant that neither of the two dominant parties isprepared to undertake a politically costly reform that would deny chiefs frombenefiting directly from mining royalties For example asked why GHEITI isnot pushing for transparency and accountability from chiefs with regards totheir utilization of mining rents one bureaucrat from the finance ministryresponded lsquoYou know the nature of our politics they [politicians] will say theprevious government has not done this so why will this government pushit They will look at it from the political anglersquo3233

In the specific Ghanaian context clientelist exchanges exist not onlybetween traditional leaders and political leaders but also between the formerand mining companies Apart from their shares in mining royalties trad-itional authorities have been the direct recipients of various forms of transfersfrommining companies in return for which they are expected to play a role inmoderating community dissent against companies In a study of three miningcommunities in Ghanarsquos Western region Bush (2010) notes how lsquoChiefs wereoften used in the development of patronndashclient relations by companies ascorporate largesse was distributed to them to encourage traditional authoritiesto control their youth and to fulfil some tasks of labour hire for routine butmostly occasional mine maintenancersquo (Bush 2010 108) Such forms of collu-sion between chiefs and mining companies have often led to feelings ofexclusion among unemployed youth who have occasionally attacked localchiefs and looted or destroyed their palaces in revenge (World Bank 2003Standing 2014)

In sum all post-independence political elites have allocated a share ofmineralroyalties to chiefs partly in exchange for political support or non-opposition totheir rule enabling them to maintain social and political order In the contextof the high degree of vulnerability that has characterized all ruling politicalelites political accommodation with traditional authorities has been importantin ensuring that chiefs who continue to wield substantial control over ruralpopulations do not support excluded political factions against those in powerIn this context policy fixes that ignore the political economy dynamics ofnatural resource governance are unlikely to be able to address the misuse ofnatural resource rents by national and local elite actors Here as Maconachieet al (2015 16) have noted captured rents by local chiefs tend to lsquoserve animportant function in securing political contracts where revenues are used tostrengthen relations with clients under systems of patronagersquo



188

5 The Political Settlement and Illegal Mining in Ghana

This section explores the impact of Ghanarsquos political settlement dynamics onthe governance of the countryrsquos ASM sector Although various governmentshave placed heavy emphasis on large-scale gold mining by transnationalcorporations (Hilson et al 2014 294) the small-scale sector has expandeddramatically in recent years (see Figure 56) and has the greatest potential forrural poverty reduction ASM accounts for well over 60 per cent of Ghanarsquostotal mining labour force (Hilson and Potter 2003 Carson et al 2005) pro-viding direct and indirect employment to over one million people (Afryieet al 2016) In 2013 gold exports from ASM operators accounted for 34 percent of Ghanarsquos total gold export which equalled the total contribution of thethree largest multinational companies in the country (Acheampong 2015)34

Although Ghana has had a formalized process for mining gold on a smallscale legal basis since the passage of the small-scale mining law in 1989 thereremain two distinct types of small-scale mines in Ghana The first groupconsists of registered ASM operators who have been awarded licences by thestate to mine in designated areas The second group comprises unregistered(and therefore illegal) small-scale operators commonly referred to as galamsey35

An estimated 85 per cent of Ghanarsquos ASM operators are galamsey (Hilson andPotter 2003 Ofosu-Mensah 2016) and there is official government acknow-ledgement that lsquoillegal mining activities are on the increasersquo (Ministry of Landsand Natural Resources 2013 3)

Most galamsey operators have opted to remain unregistered often withsignificant adverse implications Some commentators have raised concerns

11 11

15 1518

23

27

3436 36

0

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

g

old

pro

duc

tio

n

Figure 56 ASM contribution to total gold production () Ghana 2005ndash14Source Based on raw data from the Minerals Commission Accra



189

over this dynamic arguing that galamsey operators do not pay any tax to thestate while their activities continue to lsquopose serious threats to other land usersand the environmentrsquo (Bansah et al 2016) In March 2017 the Ghana WaterCompany warned that the spate of water pollution by illegal ASM operators isapproaching alarming levels and that the country risks having to importwater for consumption unless illegal mining activities are curbed ( Joy Online2017) Moreover reports of deaths resulting from the collapse of galamsey pitsas well as of violent confrontations between illegal ASM operators and formal-ized large-scale mining companies are common Why has illegal miningcontinued to grow despite the statersquos efforts to regularize the sector throughvarious policies and programmes Why have most ASM operators chosen toremain illegal despite some opportunities for state support associated withthe regularization of their activities In addition to ambiguities around landandmineral ownership we suggest two explanations each related to the ideasand incentives generated by competitive clientelism in Ghana law enforce-ment corruption and elections and partisan polarization

51 Law Enforcement Corruption

Scholars who study Ghanarsquos small-scale mining sector often blame a lack ofeffective law enforcement capacity on the part of the state for the increase ingalamsey operators (Hilson and Potter 2003 Kuma and Yendaw 2010) argu-ing that the Ghanaian state is unable to effectively broadcast its power in ruralareas where illegal mining activities take place Others attribute the blameto lsquolack of political willrsquo (Aubynn 2009) or the lsquointentional ambivalencersquo(Teschner 2012) of politicians and law enforcement institutions

Drawing evidence from Tawkwa a major mining town in the Westernregion Teschner (2012) contrasts the pervasive and open nature of illegalmining activities to the lsquoactiversquo role of police officers in frequently enforcinglaws in other aspects of public life In this context attributing the increase ingalamsey to the statersquos insufficient law enforcement capacity is not convin-cing Instead illegal mining activities have persisted because of lsquopoliticalleniency and law enforcement corruptionrsquo (ibid) One interviewee from theMinistry of Lands and Natural Resources attributes the galamsey phenomenonto lsquoa complete lack of political willrsquo arguing that the people who have theresponsibility to curb illegal mining activities tend to benefit from themlsquothe chiefs are culpable the assemblies are culpable some MPs are culpablesome ministers are culpable That is how bad it isrsquo In this respect illegalmining has continued to flourish because it serves the interests of a widerange of actors including chiefs who gain through the royalties they receivein exchange for land the government middlemen whose incomes depend onthe unfinished products of galamsey work and the political business and



190

local elite who own the concessions that operate outside the legal miningframework (see also Tsuma 2010) This suggests that calls for empoweringsecurity agencies as a way of addressing the problem of illegal mining (egKuma and Yendaw 2010 120) are misplaced Nor does the answer lie solely intechnocratic approaches such as the demarcation of land plots suitable forASM activities (eg Hilson and Potter 2003) In a recent study of the influx offoreigners into the ASM sector Crawford and Botchwey (2017) make a similarobservation stating that although various state institutions have often failedin performing their regulatory responsibilities lsquothis was not due to weaknessor lack of capacity Rather public officials ldquoturned a blind eyerdquo to illicit goldminingrsquo (2017 2)

They conclude that lsquocollaboration and collusion in illegality occurred fromlocal to national levels within both official circles and society at largersquo (2017 7)They note that this dynamic became especially prevalent at the time of the2012 general elections as politicians at various levels offered protection forillegal migrants lsquoin return for financial support to sponsor their campaignsrsquo(2017 14)

52 Competitive Elections and Partisan Polarization

Khan (2010 68) reminds us that because of the vulnerability of ruling elitescountries characterized by competitive clientelism generally suffer from lsquoweakimplementation and enforcement capabilitiesrsquo especially around reforms thatrequire the cooperation of several lsquoprincipalsrsquo within the ruling coalition Ourevidence suggests that the increasingly vulnerable nature of ruling elitesresulting from the strength of excluded elites and lower-level factions of rulingcoalitions has played a central role in undermining the effective enforcementof ASM laws In a country where over onemillion people earn their livelihoodsfrom small-scale gold mining and where presidential elections are sometimeswon by less than 50000 votes it is easy to understand the political relevanceof galamsey operators to ruling political elites and in shaping the politicalsettlement around mining sector governance more broadly

Unemployment is extremely high in rural mining areas and ASM oper-ations lsquooffer far more benefits to local residents than does the Governmentof Ghanarsquos disbursement of mining royalties or employment opportunitiesoffered by the large-scale minesrsquo (Bush 2009 57) Young men are dispropor-tionately involved in small-scale mining and are exceptionally influentialbecause they are prone to violent demonstrations which attract the attentionof large-scale companies government officials and traditional leaders Sup-porting small-scale mining is thus one simple way for politicians to appearsympathetic to the rural unemployed youth and the families they financiallysupport (Teschner 2012)



191

Aubynn (2009 66) notes that lsquoThe lack of political will to control illicitmining in the country has become even more evident since the inception ofconstitutional rule in 1993rsquoHaving worked as chief executive officer (CEO) atthe Ghana Chamber of Mines and in his present position as CEO of theGhana Minerals Commission Aubynn draws attention to the relative successin curbing galamsey operations under the dominant leader political settlementin the 1980s during which time it became lsquocommon to witness police raids ongalamsey operations which occasionally culminated in arrests and prosecu-tionsrsquo (Aubynn 2009)

However under the new democratic dispensation the fight against galam-sey has taken a more lsquopolitically sensitive dimensionrsquo as both the NPP andNDC fear that lsquoany attempt to stop galamsey operations risked puttingmorepeople out of a job with suicidal political consequencesrsquo (ibid) For Aubynnthis explains why most demonstrations by ASM operators and the seriousconflicts between mining companies and galamsey operators have since1996 often occurred in the few months leading up to elections (ibid)Although these observations were made with direct reference to the 19962000 and 2004 elections the escalation in galamsey activities in the fewmonths prior to the December 2016 presidential election suggests a similarsituation For example following a quit order by the Minerals Commissionrequiring ASM operators to stop mining in the Obuasi concession of Anglo-Gold Ashanti galamsey miners set off to vandalize the offices of politicalparties amid chants of lsquono galamsey no votesrsquo (see Daily Graphic 2016 SilverNews Online 2016)

Any possibility of curbing illegal mining will flow directly from the natureof the ruling coalition the degree to which ruling elites are sufficientlyinsulated from lsquopressures from belowrsquo and an agreement among elitesfrom different parties that it is needed Such conditions have not been inplace Part of the reason for the failure of the anti-galamsey task force of the2012ndash16 government was the lack of an interparty agreement regarding itsoperations At the outset opposition party elements accused the task forceof selectively targeting mining concessions belonging to NPP supporterswhile galamsey operators who were known NDC members were being leftoff the hook (Daily Guide 2013) Like the NDC in 2008 the NPPrsquos campaignstrategy for the 2016 elections was couched in a language that pointed toits support for small-scale mining youth with its presidential candidaterepeatedly drawing attention to how the Mahama-led NDC governmentlsquodirected Soldiers to come and drive out all persons involved in galamseyrsquo(Starr FM 2016) Competitive clientelism has thus played a central role inundermining prospects for an interparty consensus in enforcing laws withinthe ASM sectormdasha point made by Dickens (2010) following his recent visitto Obuasi



192

Looking at the overall costs of galamsey it is quite incredible to see politiciansadding it to their catalogue of electioneering promises on campaign platforms Politics is all about winning power at all costs just promise anything that willbring power [I]f a politician goes to a community which has gained notoriety foranything criminal all that he has to do is to promise to legalise it to win the votesof that community Obviously due to the immoral talks engendered by electionfever lsquolegalisedrsquo galamsey was being practised in the full glare of GhanaiansGalamsy which used to be a covert operation was being practised in broaddaylight (Dickens 2010)

Indeed even at the local level galamsey operators tend to be lsquodivided alongparty-political linesrsquo (Aubynn 2009 66) exacerbating the partisan characterof the galamsey discourse in the country

6 Conclusions

This chapter has explored the interplay between politics andmining in Ghanathrough a political settlements lens which draws attention to the ways inwhich relations of power and ideas shape the levels of elite commitment toallocating mineral resources towards inclusive development Our analysissuggests that although there is an overall elite consensus among politiciansthat mining rents be centralized the lack of a long-term development visionfor the mining industry has enabled ruling elites to skew public spendingtowards short-term objectives of political survival rather than long-terminvestments that are required to structurally transform the economy andpromote more inclusive forms of development This lack of a longer-termvision for the mining sector has itself been a product of the prevailing com-petitive clientelist political settlement in Ghana which incentivizes politicalelites to prioritize policies that enhance prospects for their political survival inthe short term

It is this form of political calculus that shapes the manner in which miningresources are distributed and the way in which this in turn shapes the impactof mining on national and local development Notably allocation of rents totraditional authorities and chiefs does not seem to be driven by socio-economic development concerns but is more of a co-optation strategy drivenby (1) the logic of maintaining social orders due to the significant leverage oftraditional authorities over mineral-rich lands (2) the desire of ruling elites towin and maintain political power through the support of chiefs who wieldsubstantial leverage over rural voters Traditional authorities receive a signifi-cant share of mineral rents mainly because ruling political elites want to avoidprovoking resistance from a group in society that brokers land and votes in therural areas



193

These findings have important implications for both theory and policyespecially with regards to the current debates on inclusive political settle-ments Although scholars have increasingly highlighted the importance ofinclusive political settlements for sustained peace and development there isoften little reflection on the lsquohowrsquo and lsquowhyrsquo of inclusion (Abdulai 2017) Forexample with specific reference to natural resource governance di John andPutzel (2009 20) highlight the importance of inclusive political settlementsstating that lsquoBroad-based elite inclusion within a political settlement is centralfor managing mineral rents effectivelyrsquo The Ghanaian case suggests thatwhereas elite inclusion in the distribution of mining rents can be helpful infacilitating the stability of ruling political coalitions it can also carry thedanger of undermining the effective management of rents for long-termdevelopment if mineral rents are deployed with the objective of lsquobuying-off rsquoelites who can potentially undermine the stability of ruling coalitions Undersuch circumstances broad-based elite inclusion may at best result in lsquounpro-ductive peacersquo (Lindemann 2011) as substantial mineral resources are sharedfor consumption rather than development

Endnotes

1 During this period the only notable exception was in 2004 when mining wasovertaken by the cocoa sector

2 She highlights Botswanarsquos vulnerability to South Africa and its membership of theSouthern African Customs Union as having also played important roles in shapingits politics of natural resource governance

3 Fantis are primarily located in the coastal part of Southern Ghana specifically theCentral region

4 Kumasi is the capital of the Ashanti region5 This was also due in part to Rawlingsrsquos perceived weakening control over the

military and pressure from foreign aid donors for democratization6 According to interviews in the Office of the Administrator of Stool Lands Ministry

of Justice and Attorney General See also Carson et al 20057 There is some similarity here to the forced labour arrangements of pongeaje and

mitaje in colonial and post-colonial Bolivia (see Chapter 3 n 5)8 The first official European gold mining company established in the Gold Coast

Colony was the African Gold Coast Company in 1878 (Hilson 2002)9 At that time the proliferation of capitalist concessionaire activity derived not only

from the impetus of gold mining but also from the burgeoning commercial timberindustry (Dumett 1998 274)

10 For details on the nature and extent of these demands and pressures from expatri-ate companies see Dumett (1998) particularly Chapter 6 entitled lsquoThe colonialgovernment and the expanding minersrsquo frontier Pressures for mining districtadministration health services and transport improvementsrsquo (1998 163ndash204)



194

11 According to an interview with a former PNDC member and an activist in theGhanaian mining sector

12 These observations are based on an interview with a mining activist13 Note that until this period small-scale mining in Ghana was considered entirely

illegal by the state14 Essentially a windfall tax15 According to interviews with a senior bureaucrat at the Ministry of Lands and

Natural Resources and a member of the Mining Review Committee and at theOffice of the Administrator of Stool Lands Ministry of Justice and AttorneyGeneral

16 According to an interview with a senior bureaucrat at the Ministry of Lands andNatural Resources and a member of the Mining Review Committee

17 See also Reuters (25 October 2011) lsquoGhana should seek more revenues fromminingsector IMFrsquo httpwwwtheafricareportcomReuters-FeedGhana-should-seek-more-revenues-from-mining-sector-IMFhtml accessed 25 May 2017

18 These pledges were again repeated in the partyrsquos 2012 election manifesto lsquoThelong-held position of the NDC is that the mining sector has to be re-organized toallow the nation and mining communities specifically to benefit more from theirresourcesrsquo (NDC 2012 40)

19 According to an interview with a mining activist and university lecturer20 Interview in the Ministry of Lands and Natural Resources21 See UNDP (nd) lsquoUNDP in Ghana Eradicate extreme hunger and poverty MDG 1rsquo

httpwwwghundporgcontentghanaenhomepost-2015mdgoverviewoverviewmdg1html accessed 25 May 2017

22 Interview with mining sector activist and co-chair for the Ghana Extractive Indus-try Transparency Initiative

23 These terms have been recently renegotiated but the terms of the new agreementsare still not in the public domain

24 The Native AuthorityIndirectly rule system in the Gold Coast is often traced backto 1847mdashthe official year of the commencement of British colonialism

25 TheMDFwas established to (1) promote development in local mining communitiesthrough the redistribution of mining royalties to mining-affected communities (2)compensate the same communities for the costs associated withmining (3) supportthe operating budget of mining sector institutions (Republic of Ghana 2013)

26 It dates back to the first post-colonial government in the 1950s and 1960s (seeAryee 2001)

27 According to an interview with an official of the Ghana Extractive Industry Trans-parency Initiative (EITI) 20 January 2017

28 According to an interview with an official of the Ghana EITI29 Interview with a mining sector activist and university lecturer30 Ibid31 In one specific example barely two weeks before the 2012 presidential elections

President Mahama donated twelve Toyota Land Cruisers to chiefs across the coun-try in what was widely interpreted as a vote-buying strategy

32 Interview with a GHEITI official in the Ministry of Finance



195

33 The relevance of these observations goes well beyond the Ghanaian context assuggested by evidence from a recent study on the relationship between politiciansand traditional leaders in some nineteen African countries (Baldwin 2014) Thestudy draws attention to the growing tendency of politicians in Africa to cedepower over the control of land to chiefs and explains this phenomenon as part ofan elite lsquobargainrsquo through which chiefs help politicians in mobilizing electoralsupport in increasingly competitive electoral environments It is the lsquoprospectof competitive electionsrsquo that lsquotriggers decisions to cede power to chiefsrsquo often asa way of overcoming lsquothe challenge of building winning electoral coalitionsrsquo(Baldwin 2014 256)

34 These companies are AngloGold Obuasi Goldfields Tarkwa and Newmont GhanaLimited AngloGold contributed 6 per cent of gold exports in 2013 Newmont had13per cent andGoldfields Tarkwa accounted for 15per cent equalling 34per centmdashthe same as the contribution of small-scale miners

35 Galamsey is an adulterated English phrase for lsquogather themand sellrsquo (Aubynn 2009)



196

6

Conclusions

Interpreting the Politics of NaturalResource Extraction

As we were in the final stages of preparing this manuscript Global Witnessreleased its report lsquoDefenders of the Earth Global Killings of Land and Envir-onmental Defendersrsquo (Global Witness 2017) The report records 200 docu-mented killings in 2016 a new record up from 185 murders in 2015 whichhad also been a record In the view of the non-governmental organization(NGO) lsquoThis tide of violence is driven by an intensifying fight for land andnatural resources as mining logging hydro-electric and agricultural compan-ies trample on people and the environment in their pursuit of profitrsquo If oneneeded a reminder that the drivers of natural resource governance are deeplypolitical this is an especially poignant one

Appalling realities such as those described in the Global Witness reportdemand that discussions of natural resource governance have a substantialpolitical component This does not mean that resource governance has to beanalysed in political terms alone but it cannot be analysed apolitically InChapter 1 we noted that some of the calls for lsquobetterrsquo institutions in extractiveindustry governance elide discussion of the political processes through whichexisting institutionshavebecomedominant or throughwhich theywouldneedtobe contested ifnewarrangementswere toemergeWealsonoted though thatthere is a significant body of literature that does read extractive industriesthrough a political lens One of the tasks of this book has been to showwhat if anything a political settlements approach might add to this work

This existing literature on the politics of extractive industry has followeddifferent lines Terry Karlrsquos work (1987 1997) for instance explored therelationships between extractive industries and the possibilities of democracyKarl analysed how political pact making related to oil development createdincentives to keep democratic institutions weak with pacts in one period


constraining political options in subsequent moments This interest in theimplications of extractives for democracy has also characterized the methodo-logically varied interventions of authors such as Michael Ross (2012) andJames Robinson et al (2006) At their core these approaches have exploredhow subsoil natural resources affect the incentives encountered by politicalelites and their subsequent behaviour Much of this work has been focused at anational level though a number of authors have addressed the same concernsin analyses of the implications of resource extraction for subnational politicaldynamics and the responses of subnational governments (Arellano-Yanguas2011 Asante 2016)

Research on social mobilization and resistance to extractive industryinvestment constitutes a distinct approach to the politics of resource gov-ernance Here the emphasis has been on understanding why and howaffected populations and activists respond to the presence or expectation ofextractive industry The bulk of this research has been at a quite local scaleexamining particular community-level conflicts (Bebbington and Bury2013 Gilberthorpe and Hilson 2014 Kirsch 2014) What this research hasdone less well is understand the operations of national political and eco-nomic elites both within the state (Kirsch 2012) and within corporations(Kemp 2014)

Work such as Karlrsquos and Rossrsquos operate primarily at a national scale whilework on forms of popular agency and resistance tends to have a territorialand local focus Just as these approaches to resource politics prioritize differ-ing scales of analysis they also focus on different types of actor While someauthors are primarily concerned with political and economic elites othersare more interested in the actions and motivations of indigenous non-governmental community-based and civic actors who mobilize preciselybecause they feel excluded from the national and strategic decision makingfora that the elites dominate Another difference among these approaches isthat some implicitly take a notion of development for granted while othersquestion dominant models of development For some analysts what is primar-ily at stake is a politics of interests while others are more concerned with thecontentious politics of ideas that inform natural resource governance

In some sense the Global Witness document occupies the space at whichthe concerns of these different analytical traditions could articulate Thetragic material on which it reports demands an understanding of how theincentives to those who stand to gain from resource extraction drive decisionsthat ripple out through political and social networks ultimately leadingpeople to kill those who resist At the same time targeted killings and civilconflict are not the only outcome when elite politics and pact making collidewith grassroots interpretations of resource extraction These diverse outcomesdemand an explanation of why this articulation sometimes produces violence



198

and at other times produces compromise and institutional innovation Putin the language of lsquogoodrsquo natural resource governance the question is howcan the conditions under which more lsquoeffectiversquo and lsquoinclusiversquo institutionsemerge be understood anticipated and facilitated Political settlementsapproaches are no panacea in the face of this analytical and political ques-tion However they may go some way towards helping bridge these differentways of framing natural resource politics and in bringing elite politicsdifferent forms of political agency and grassroots contention within the sameanalytical frame

Our discussions of Bolivia Ghana Peru and Zambia have offered accountsof the long historical sweep of the politics surrounding extractive industrygovernance They have tried to account for the shifting pacts among elites aswell as their interactions with grassroots responses to extractive industryinvestment and to explain resource governance institutions in terms ofthese pacts and interactions At the same time they have sought pattern inthese interactions The goal has been to show that while there is alwaysnegotiation and agency the politics of resource governance is not one ofperpetual change Instead this governance is characterized by periods of stabil-ity (settlement) punctuated by transitions of instability and contingencyDiscussing each countryrsquos resource governance history through a shared andintegrative conceptual lens helps we hope to identify both similarities anddifferences in ways that push forward conceptual discussions In this chapterwe focus on those comparisons and contrasts and use them to revisit a discus-sion of political settlements and the broader politics of resource governance

1 Restating the Endeavour

The work underlying this book was predicated on two main claims Firstpolitical settlements theory can help explain how mineral and hydrocarbonresources are governed over time in ways that complement other approachesto the politics of extractive industries governance Second a focus on naturalresources can bring to the fore important ways in whichmateriality scale andideas affect relationships among the elites and other social actors in naturalresource governance and play a causal role in the constitution of politicalsettlements In this final chapter we summarize what the Peruvian BolivianZambian and Ghanaian analyses have contributed to these claimsWe do thisby developing answers to the following three themes that have run throughthe book (1) How have transnational factors affected the politics of extractiveindustry governance and the relationships between the mineral economy andpolitical settlements (2) How have the circulation of ideas and thematerialityof the resources in question affected natural resource politics and the


The Politics of Natural Resource Extraction

199

relationships between political settlements and natural resource governance(3) How has the nature of political settlements affected the governance of theextractive industries sector and relationships between the sector and patternsof social inclusion and how have the dynamics surrounding resource extrac-tion in turn influenced features of these political settlements We close with asummary discussion of the ways in which a focus on natural resources canbring new insights to political settlements thinking

2 Transnational Factors in the Politics of NaturalResource Extraction

In the course of discussing our conclusions with colleagues we were cau-tioned against seeing too much convergence across our cases While this is afair warning there is no doubt that a series of transnational processes andshared global histories link resource extraction in the four countries analysed(cf Cooper et al 1993) Some of these global histories are more general somemore specific but each of them cautions against prioritizing the country levelin the analysis of political settlements Key elements of these transnationalcouplings hinge around colonialism and post-colonialism global commodityprices and domestic political and economic dynamics state capitalism andneoliberalism and corporate strategy and new investors

21 Colonialism and Post-Colonialism

While there are obvious differences among the four countries as regards thespecific colonial powers associated with resource extraction and the periodsin which those powers exercised direct rule the association of mining withboth colonial rule and truncated post-colonial transitions remains animportant element of the contemporary politics of resource governance Inall four countries resource extraction is still associated with the exercise ofcolonial power and some actors relate the inability to become fully lsquopost-colonialrsquo to the ways in which subsoil resources continue to be governedThis narrative circulates in popular and journalistic1 texts (Galeano 1971)academic analysis (Ferguson 2006) and UN reports (Mbeki Panel 2015) Asa consequence discussions around extractive industry are simultaneouslydiscussions around sovereignty and dependence meaning that moves toderegulate and re-regulate resource extraction are interpreted through suchlanguages as well as in technical terms As noted in Chapter 5 on GhanaPresident John Mahama invoked precisely this sense of continuing depend-ency when he lamented at the annual World Economic Forum meeting inDavos in 2014 that lsquo[The mining companies] threatened to lay off workers



200

if we implemented the windfall tax and because we needed the jobs and youdonrsquot want workers laid off you are coerced to go alongrsquo

Such histories of truncated transitions in the post-colonial era continue toinfluence ideas about resource governance in Zambia and Bolivia also Fur-thermore and as the experience of Peru shows perceived national elite con-trol of mineral resources can be viewed by subnational actors as a continuingform of lsquointernal colonialismrsquo itself a legacy of racialized colonial power andthe centralization of political authority

22 Global Commodity Prices and Domestic Politicaland Economic Dynamics

Global commodity markets bind these countriesrsquo resource sectors together inimportant ways Most importantly all countries are price takers in thesemarkets While at one level this dependence on global prices is the caseeverywhere the implications are more significant when internal demand islimited and economies poorly diversified The effect is that the policy spaceopen to national elites varies as global prices move The options open to allfour countries to address poverty over the first fifteen years of this centurywere a direct function of the commodity boom and in particular of significantincreases in gold copper gas oil and silver prices By the same token by themid-2010s each country was reappraising poverty reduction financing in lightof the end of the commodity super-cycle Other income stream optionsabsent from government range from cutbacks in social policy expenditurethrough to policies favouring the expansion of extraction in an effort to offsetdeclining prices with increasing production as in Boliviarsquos approach toexpanding its natural gas frontier2

Global commodity markets have also been implicated in the constitutionand unravelling of national political actors in each country as well as in theirrelative levels of holding power and inclusion in prevailing settlements This isparticularly clear for the cases of organized labour and small-scale miners InZambia and Bolivia unionized mine workers became a critical part of thepolitical landscape up to the late and mid-1980s respectively their initialemergence as political actors having been made possible by the combinationof nationalized industry and reasonable prices for copper and tin Their emer-gence as powerful forces meant that they were very much included withintheir respective national settlements and able to channel significant benefitsin the form of social services and wages towards mining areas and unionmembers This in turn led to geographically and sectorally concentratedimpacts on poverty and inclusion As noted in the Zambia chapter duringthese periods of union strength lsquo[t]he Copperbelt in many ways resembled amini-developmental statersquo The cohesion of these actors and the associated



201

mechanisms of inclusion unravelled quickly when prices collapsed labourwas dismissed and industry was privatized

Conversely as commodity prices began to rise again during the 2000s anew set of political actors emerged related to artisanal and small-scale min-ing (ASM) This phenomenon is especially dramatic in Ghana and Boliviathough it is also significant in Peru In each case ASM has become a far moreimportant source of employment than large-scale mining (see for instanceCano 2015a for Peru and Hilson 2009 and Hilson and Garforth 2013 forGhana) In addition ASM organizations and networks have become vehiclesfor political inclusion expressed through street protest and violence (Bolivia)subnational electoral success (Peru) lobbying (all three countries) and directrepresentation in debates on national mining policy (Bolivia) While nationalfactors may have helped trigger the initial emergence of ASM through con-scious policy to promote it as in Bolivia in the 1980s and Peru in the 1970s3

it is only because of transnational processes of price formation that thesesectors have emerged as significant modes of economic inclusion in themineral economy These processes also contributed to ASM operators becom-ing nationally important political actors able to exercise direct influence onlegislation and force themselves into the national political settlement aboveall in Bolivia

23 State Capitalism and Neoliberalism

Another shared experience in all four countries has been the transition to andfro between state-owned and privatized industry The extent of this oscillationvaries among countries though it has been clearest in the case of hydrocar-bons governance in Bolivia which has been nationalized three times over thelast century The oscillation between different forms of ownership is partlyexplained by changes in national settlements while also influencing subse-quent settlements because of the effects that nationalization and privatizationhave on the relative power of different actors However there is also a sharedtransnational dimension to what has happened across Bolivia Ghana Peruand Zambia Changes in ownership have reflected global shifts in priceschanges in global thinking regarding the merits of state-led investment theinability of state companies to access leading technology and information(thus reducing their competitiveness) and the influence of internationalfinancial institutions especially the World Bank It is clearly no coincidencethat from the mid-1980s to the late 1990s each of the four countries movedfrom state-owned industry to one dominated by the private sectormdashabove allin mining Thus the Bolivian Mining Corporation (Corporacioacuten Minera deBolivia COMIBOL) the state-owned mining company was to all intents andpurposes wound down in 1986 Ghanarsquos State Gold Mining Corporation



202

(SGMC) in themid-1980s Perursquos various state-ownedmining assets in the firsthalf of the 1990s and Zambiarsquos Consolidated Copper Mines (ZCCM) in 2000Since these periods the mining sector in each country has been dominated byprivate investment4 almost entirely international in character5 This privateinvestment has been explicitly encouraged by broadly neoliberal policiespromoted by international financial institutions and many domestic elites

The relative coincidence in lsquoglobal timersquo of these transitions attests to theimportance of globally circulating ideas regarding state-led management ofthe economy such as those emanating from the United Nationrsquos influentialEconomic Commission for Latin America and the Caribbean (ECLAC) in themid-twentieth century (Finnemore 1997) and later state withdrawal fromthe economy based on ideas emanating from Chicago School economistsand subsequently distributed globally via iconic cases in the 1970s and1980s such as Chile New Zealand and the United Kingdom (Maxwell andStone 2004 Stone 2004) However the nature of the national polity is alsoimportant In each country resource nationalism has only been institution-alized in the form of state ownership or elevated taxation under dominantpartydominant leader settlements This suggests (as Soifer 2015 argues fornineteenth-century Latin America) that state-centric developmentalist ideastend to take root when there are high levels of political elite cohesion andthat these elites look to the state as the instrument for implementing theirvision of development Conversely under conditions of competing elitesthere is a preference for a weaker state lest it be captured by one or anothergroup (Soifer 2015 vom Hau and Hickey 2016)

24 Corporate Strategy and New Investors

As the mineral and hydrocarbon sectors of each country have become dom-inated by transnational capital investment they are also affected by globaldynamics within that corporate community Thus investment and portfoliodecisions by corporations in any given country are not independent of thedecisions they make in other countries In addition even though companiesclearly adapt elements of their practices and demands to a particular countrythe disciplining effect of global commodity and capital markets together withthe club effects of corporate information sharing and self-organizingmdashforinstance in the form of the International Council of Mining and Metals(ICMM)mdashmean that ideas and practices circulate transnationally The rise ofcorporate social responsibility (CSR) is a case in point Though the ways inwhich CSR rolls out in each country are affected by levels of conflict fiscalpolicy and forms of government decentralization core sets of practices travelthe globe affecting localized forms of patrimonialism and elite capture as wellas local development (Frederiksen 2017)



203

A second pattern across all four countries has been the changing compos-ition of investment in extractive industry Chinese capital has become increas-ingly important especially in the mining sector in Peru and Zambia but alsoin hydrocarbons in Bolivia (see also Sanborn and Torres 2009 Mohan et al2012 Brautigam and Gallagher 2014 Gallagher 2016) However unlike inthe case of resource nationalism the engagement with Chinese and otherlsquonon-traditionalrsquo sources of investment seems to occur across quite differentpolitical settlements While not all Chinese companies have similar practicesthe implications for development may be significant and at the very leasttheir generalized presence does imply the insertion of the Chinese EmbassyChinese foreign policy and new corporate actors into discussions of extractiveindustry policy in ways that challenge national elites (corporate public andcivic) who have a relative lack of experience in negotiating with Chinesecapital Commenting on the mining sector in Peru Sanborn and Chonn(2015) note that by 2015 Chinese state-owned enterprises had come to holdmore than a third of the countryrsquos projected investment portfolio and in theauthorsrsquo view appeared less willing than their western and Peruvian counter-parts to communicate with diverse actors or engage in local power strugglesThis increased presence of new forms of capital in each country is also affectedby domestic elitesrsquo efforts to seek sources of investment that establish lesspolitical conditionalities

From the colonial era to the present therefore transnational factorsranging from global prices to the practices of international corporationshave affected the nature of political settlements and the governance ofnatural resources National dynamics thus cannot be considered in isolationfrom the broader context in which they are situated These transnationalfactors are in turn the result of the global circulation of ideas a topic weturn to in the following section

3 Materiality Ideas and the Politics of ExtractiveIndustry Governance

The histories of natural resource politics in Bolivia Ghana Peru and Zambiahave suggested that these politics are best understood not just in terms of theinterests of different parties negotiating resource use and control but also interms of the very nature of the resource itself and of ideas about that resourceWhile those ideas might be mobilized in pursuit of particular interests theyexist separate from those interests often emanate from other locations andscales and have had effects that cannot be explained solely in terms ofinterest-based politics The nature of the resource in questionmdashits locationits quality its ease of extraction and so onmdashhas also had political effects



204

In this sense both ideas about and the materiality of resources have affectedresource governance and the formation of political settlements

31 Materiality

Mineral and hydrocarbon resources have patchy geographies that overlapwith geographies of political authority race and ethnicity land and territorialclaims and other natural resources In each of the countries studied relativelylong-standing historically stable geographies of resource extraction have beendisrupted in recent decades in ways that influence the politics of extractiveindustry governance In Zambia the notion that mining is primarily a featureof the Copperbelt has now been upset as copper mining moves into North-Western Province In Ghana the association of resource extraction withAshanti and Western regions has now been overturned by the spread ofmineral concessions into other areas as well as by offshore oil (Cuba et al2014) In Bolivia the notion that the eastern lowland department of SantaCruz was the centre of the hydrocarbon economy was rapidly upended by thepost-1990s discoveries of remarkable gas reserves in Tarija (HumphreysBebbington 2010) And in Peru the opening of new mining frontiers in thenorth of the country has challenged the traditional association of hard-rockmining with the Central Andes and Southern Coast

These new frontiers are not just geographical phenomena driven by amix ofglobal changes in prices and demand and national policy incentives (Bridge2004)mdashthey also produce political change The expansion of mining intonorthern Peru has created political actors with considerable power Theseactors include the owners of new and extremely profitable mines as well asthe regional political and civic actors contesting the forms taken by thismining6 The growth of the gas economy in Tarija and the capture of revenuefrom it helped produce regional political elites with the capacity to makethemselves essential ideological allies of the national elites with whom theyconverged or powerful opponents of other elites with whom they disagreedGas also provided new sources of political leverage for traditionally marginal-ized Guaraniacute communities under whose land the newly found deposits lay(Ospina et al 2015) In other instances this expanding frontier has led ASMminers to gain political influence This has tended to occur in areas whereminerals are accessible with relatively low-tech practices as in the case ofalluvial gold in Madre de Dios Peru near-surface gold in parts of Ghana orabandoned subsurface mines in highland Bolivia

While the expansion of copper into Zambiarsquos North-Western Province hasnot yet created regionally based political actors with the capacity to break intothe national settlement it may well do so in the future and it has at leastincreased the leverage of local chiefs who have influence over land and access



205

to the subsoil The expansion ofmining and oil into non-traditional regions ofGhana has brought into being subnational political actors (chiefs and other-wise) with capacity to engage the central government directly (see also Asante2016) At the same time as they strengthen new actors these processes weakenthe relative power of actors in traditional areas of extractionmdashas in the case ofpolitical authorities and labour in the Zambian Copperbelt This intersectionof the materiality of subsoil resources with frontier expansion due to globaldemand and prices thus becomes part of an explanation of how actors onceexcluded from national settlements gain holding power that can enable themto influence national debates on resource governance These processes alsohelp explain how factions that were at one time vertically included in thepolitical settlementmdashperhaps especially organized labour in areas of trad-itional productionmdashslowly lose leverage within the dominant coalition

Furthermore these processes and shifts in the balance of power are part ofan explanation for the emergence of and struggles over new rules governingthe distribution and spending of resource rents Across all four countriesthough perhaps in ways that are more pronounced in Peru and Boliviathe expansion of the extractive frontier into areas without a tradition ofmining or hydrocarbon production has been characterized by conflict andresistance This has generated a broad literature suggesting that such conflicthas sometimes reflected efforts to protect or claim rights (to territory waterself-governance etc) and at other times has been used as a tool to gain accessto employment rents subcontracts and other benefits or compensations(Arellano-Yanguas 2011 Bebbington 2012) Regardless of these differentdrivers of protest (some of which are interest-based others of which areidea-based) a common response across all four countries has been for thenational elites to share resource rents with subnational and local authoritiesin the hope that this will dissipate conflict buy off resistance and createconditions allowing access to subsoil resources

One such mechanism in each of the countries has been the use of CSR as away of co-opting local elites (Frederiksen 2017) In three of the countries(Peru Bolivia and Ghana) a second and financially much more importantmechanism has been to institute systems for the transfer of taxes and royaltiesto the regions in which resource extraction occurs Themost generous of thesetransfers has been the so-called canonminero in Peru which returns 50 per centof all taxes on mining companies to authorities in the regions of extractionThe least generous is that in Ghana which sends just 10 per cent of royaltiesback to a mix of district assemblies traditional authorities and stools7 Boliviasits in between with more substantial transfers of hydrocarbon taxes backto gas- and oil-producing areas and much smaller transfers of mining taxesto mining regions Peru appears to have been particularly generous becauseof the level of local conflict surrounding resource extraction Government



206

and corporate elites believed incorrectly as it turned out that transferringresources to these regions would reduce conflict (Arellano-Yanguas 2011Ponce and McClintock 2014) In both Peru and Bolivia when central author-ities have subsequently sought to reduce such transfers they have been largelyunable to do so because of the level of local resistance Such resistance drivenby actors who have become accustomed to the receipt of these transfersreflects a further sense in which the geography of resource extraction contrib-utes to the emergence of subnational constituencies with holding power

It is not just the physical location of resources that can have such politicaleffects The quality of the resource helps determine whether it becomes viableor not how it will be mined how much water will be used in the extractionprocess and so forth Just as one example the concentration of depositsdetermines whether they will be mined using open-pit or underground min-ing techniques Open-pit techniques involve far more movement of earthaffect more surface property rights and demand more water use Such tech-niques have typically been much more conflictive than underground miningThe high levels of conflict in northern Peru which have had significantconsequences for regional and national politics owe much to the fact thatdeposits have demanded open-pit mining

32 Ideas Resource Nationalism the Nation and Technopols

Different ideas related to resource extraction have influenced the constitutionof national political settlements and governance arrangements Ideas sur-rounding territory rights environmental impacts and ethnicndashracial identityhave been important in the emergence of subnational actors that contestresource extraction and the distribution of rents generated from mineralsand hydrocarbonsWhile the experiences in Bolivia Ghana Peru and Zambiasuggest many ways in which ideas are important here we focus specifically onthe influence of ideas of resource populism national unity and the nationand the idea that technocrats are objective and above special interests and soare able to govern more effectively than politicians

Resource nationalism is the notion that natural resources should be man-aged above all for the needs of lsquothe nationrsquo and therefore should be controlledby the state for lsquothe peoplersquo This idea is closely related to historical experi-ences of colonialism dependent development and the capture of resourcerents by foreign capital It also has a constitutional basis in many countriesinsofar as national constitutions define the state as the owner of subsoilmineral resources This observation is important because the global industrytypically talks of resource nationalism in negative terms as an unauthorizedand inefficient exercise of state power that puts a break on market function-ing This framing understates the constitutional obligation of many states to



207

administer their countriesrsquo subsoil resource wealth as well as the resonancethat this idea has with broad parts of national populations

Such national-populist renderings of resource governance have beenimportant in all four countries They have emerged at different historicalmoments and have typically been associated with dominant partydominantleader settlements In Zambia such ideas informed the nationalizationseffected by the United National Independence Party (UNIP) of KennethKaunda the first president after independence during the late 1960s andearly 1970s They were also present in the approach to natural resourcegovernance of Kwame Nkrumah the first president and prime minister ofGhana following independence in 1957 In Peru they were especially strongduring the period of the nationalist Revolutionary Government of the ArmedForces (Gobierno Revolucionario de las Fuerzas Armadas GRFA) from 1969 to1974 In Bolivia they were at the core of the agenda of the post-1952 govern-ment of the National Revolutionary Movement (Movimiento NacionalistaRevolucionario MNR) and then again more recently since the 2006 electionof the indigenistndashsocialist government of Evo Moralesrsquo Movement to Socialism(Movimiento al Socialismo MAS)

In each of these cases ideas of resource nationalism grounded in organizedlabour in the mining and oil sectors party intellectuals and other factionsprovided ideological support for notions of state ownership of extractiveindustry While in more recent periods such ideas have been most forcefullymobilized in Bolivia they have also been apparent inmineral taxation debatesin the three other countries in each instance informing (usually short-lived)efforts to introduce tax increases during periods of commodity boom8

Interestingly there is some indication that the Bolivian example has servedas a point of reference for some African countries pursuing such optionsOne prominent example has been the concept that anti-poverty policyinstruments could be directly funded by taxes on the mineral and hydrocar-bon sectors (Mosley 2017) What is important here is to recognize that thesesets of ideas only come into being because of the long-standing couplingsof resource extraction with colonial and post-colonial exploitation Howhistory is remembered and interpreted thus matters The ideological signifi-cance of natural resources in these histories creates ideational space for ideasof resource nationalism

Ideas of the nation national unity and sovereignty influence the govern-ance of extractive industries in additional ways To the extent that the local-ized nature of resource extraction can elicit subnational movementsdemanding either greater autonomy in the governance of natural resourcesor greater claims over the revenue streams made possible by royalties and thetaxation of extractive industry there is always a sense in which the politicaldynamics surrounding extraction can challenge national integration Indeed



208

while transferring revenue to mineral- and hydrocarbon-producing regionsGhanaian and Bolivian national authorities have also mobilized ideas ofnational unity (Ghana) and national equityharmony (Bolivia) as rationalesfor increasing the proportion of resource rents that are centrally controlledwith a view to spending them in line with national policies and in a way thatdoes not concentrate fiscal transfers in the regions in which extraction occursIn Ghana there has been a recurring commitment to distribute rents withoutregard for regions of extraction Even resources from the Mineral Develop-ment Fund which are theoretically meant to mitigate the environmental andsocial costs in the communities where mining occurs are distributed to bene-fit non-mining communities in the name of lsquounityrsquo In Bolivia the MASgovernment has deployed ideas of the nation as a justification for changesto fiscal policy that seek to reduce the proportion of rents going to depart-ments in the eastern lowlands that have been critical of the MAS governmentThough these moves have also been part of conscious efforts to reduce thepower of subnational factions that had been empowered by previously moregenerous fiscal transfers they have been crafted in terms of lsquothe nationrsquo andlsquothe peoplersquo

Peru offers further insight into the importance of ideas This is a case inwhich the idea of technocracy as legitimate government has been importantin influencing the governance of extractives and development The relativestability of macroeconomic policy and the suite of incentives to encourageextractive industry investment across the country even in the face of rela-tively unstable governments and sustained social conflict over resource extrac-tion is taken by some scholars to reflect the relative power of technocratswithin key ministries in defining national policy (Dargent 2015) Thesetechnocrats have over the last twenty years been committed to ideas thatplace value on free markets are suspicious of planning and deeply doubt thecapacity of the state to be an efficient and effective economic actor Thisrelationship between ideas and pockets of bureaucratic and technocratic com-petence has also been visible in other parts of the Peruvian state where overthe last two decades a strong rights-oriented legal technocracy has beenconsolidated in the Human Rights Ombudsmanrsquos office and with somewhatless autonomy (and more recently) in the Ministry of Environment and Vice-Ministry for Intercultural Affairs9 Together these different concentrationsof technocratic strength have played important roles in determining howresource governance institutions are designed to manage the trade-offsbetween the promotion of investment and the protection of citizenship rightsin relation to natural resource governance

Quoting from Chapter 2 the argument here is that in a lsquocontext of ldquofrac-tured politicsrdquo (Crabtree 2011) technocrats have remained fundamental tooperating the central state in Peru and this has contributed to a higher degree



209

of stability and responsibility in macroeconomic policymaking than in pasteras (Dargent 2015)rsquo Of course this is also possible because of a certainalignment between the thinking of technocrats and that of national businesselites but it also appears that the very idea of being technical ratherthan political is mobilized in ways that protect space for such so-calledlsquotechno-polsrsquo

The ideas embodied in technocracy or resource nationalism as forms ofgoverning as well as ideas that have motivated mobilization and protesthave interacted with the material qualities of subsoil resources in ways thathave had clear implications for resource politics and national politics moregenerally Though these ideas and materialities cannot be explained away asmere artefacts of a politics of interests and incentives the effects that theyhave derive from the particular ways in which they interact with such inter-ests We now turn to a closing discussion of these interests and their implica-tions for mineral governance

4 Political Settlements Extractive Industry and InclusiveDevelopment

Terry Karl once commented that lsquothe ldquoresource curserdquo is primarily a politicaland not an economic phenomenonrsquo and that the institutional distortionsthat prevent economic diversification and inclusive development lsquocannot beundone without a huge coordinated effort by all stakeholders involvedrsquo (Karl2007 256 258) Introducing this chapter we noted that scholarly and activistwork alike have highlighted the importance of politics and power in resourceextraction The question however is how to talk about such power in aformal analytical way that combines both elite and grassroots politics Ourargument has been that political settlements approaches offer a fruitfulresponse to this task

Political settlement frameworks focus attention on relationships of verti-cal power between elites and bases within a dominant coalition and hori-zontal power between elites of a dominant coalition and excluded factionswho are not party to the benefits bestowed by the coalition (Khan 2010)Levy and Walton (2013) and Levy (2014) complement this frameworkby arguing that how elites within a dominant coalition manage theserelationships and approach development depends on whether the broaderpolitical system is characterized by competition among leaders and parties orthe dominance of a particular leader or party Political competition would leadelites to recruit clients into the coalition as a means of holding on to power(a form of political settlement they refer to as lsquocompetitive clientelismrsquo) andwould tend therefore to operate with shorter-term time horizons oriented



210

towards recruitment of clients ahead of electoral cycles Conversely dominantleaders and parties are able to worry less about client recruitment and to useresources for longer-term political projects based on particular ideas ofdevelopment or personal gain a form of settlement referred to as a dominantleaderdominant party settlement Such forms of dominant partydominantleader settlement can range from the authoritarian modernization project of adevelopmental state through to a personalized kleptocratic project and caninvolve leadership that is autocratic or elected but in either instance dominant

How far do these frameworks help explain how extractive industries havebeen governed across Bolivia Ghana Peru and Zambia In turn how far doesthe prominence of extractive industries in these economies help explain thesevertical and horizontal relationships and the extent to which political arrange-ments are characterized by competition or authoritarianism Several themesemerge in the country analyses which we address in this section The first twothemes relate to the relationships between the nature of the broader politicalsystem extractive industry governance and modes of inclusion The secondtwo themes have to do with the relationships between horizontal and verticaldistribution of power among elites excluded factions and lsquolower-level groupsrsquoand institutional change The final issue relates to the particular insights to begained from a long-term view of these relationships

41 Competitive Clientelism Economic Transformation and Modesof Inclusion

It has been argued in some of the political settlements literature that competi-tive clientelist systems tend to be associated with weaker commitment toinvestment of resources in structural transformation of the economy becauseleadersrsquo primary concern is to use resources to recruit electoral support in orderto remain in power (Hickey et al 2015 Whitfield et al 2015) As noted inChapter 1 the notion of clientelism in this concept is not one of the trad-itional patronndashclient relationship of dominance and dependence but ratherof the elites who in competing for political power need to recruit and sustainsupporters both to assume and then retain governing power The lsquoclientsrsquo inlsquocompetitive clientelismrsquo thus have significant power themselves which theycan use to trade their support for governing elites in return for benefits ofdifferent types This creates incentives for elites to channel resources to dif-ferent constituencies rather than to invest those resources in one or otherdevelopment strategy This claim that competitive political systems can leadto dissipation of resources has led to arguments for the developmental stateand the notion that a combination of authoritarian rule with bureaucraticcompetence can allow states to introduce coordinated programmes of eco-nomic and institutional modernization without having to dilute reforms to



211

accommodate the electoral and political claimsmade by those who lose out insuch processes (OrsquoDonnell 1973 1988 Evans 1995 Golooba-Mutebi 2013)

At one read the case for the limited developmental efficacy of competitiveclientelism seems to be borne out by the four country histories The argumentis made most forcefully through the discussion of mining governance inGhana in Chapter 5 which argues that a competitive clientelist system hascreated incentives for the political party in power to use rents from extrac-tives primarily as a means of cultivating clients with a view to securingallegiance ahead of the next electoral campaign It is worth repeating thetext of that chapter

It is this form of political calculus that shapes the manner in which miningresources are distributed and the way in which this in turn shapes the impact ofmining on national and local development Notably allocation of rents totraditional authorities and chiefs does not seem to be driven by socio-economic development concerns but is more of a co-optation strategy drivenby (1) the logic of maintaining social orders due to the significant leverage oftraditional authorities over mineral-rich lands (2) the desire of ruling elites towin and maintain political power through the political support of chiefs whowield substantial leverage over rural voters Traditional authorities receive asignificant share of mineral rents mainly because ruling political elites wantto avoid provoking resistance from a group in society that brokers land and votesin the rural areas

We make a similar argument in Chapter 3 on Bolivia though in that instancethe emphasis is less on using resource rents to cultivate clients and more onbuilding political alliances

[T]he incentive for elites has consistently been to control revenue streams fromresources in order to spend onmanaging political alliances rather than to investin economic and social development

However a closer look at the extractives sector suggests that while competitiveclientelist systems might underinvest in forceful state-directed approachesto economic diversification and transformation they have nonetheless beenassociated with transformational policy in the extractives sector and theeconomy as a whole The introduction of thoroughgoing neoliberal reformsto break up state-owned extractive industry enterprises and encourage foreigndirect investment has occurred during periods of democracy characterizedby competitive clientelist practices This is particularly clear for the periodsfrom the latter 1980s to mid-1990s in Bolivia and Zambia and to some degreealso in Peru10

Across the four countries periods of competitive clientelist rule have notsucceeded in using resource rents to foster any substantial diversification ofthe economy In Peru the commitment of 50 per cent of taxes paid bymining



212

companies to the canon minero the return of all royalties to the producingregions and the use of part of those rents that do accrue to central governmentfor the financing of national social programmes has the knock-on effect ofreducing resource availability for investment in structural transformation ofthe economy even when policymakers have identified this to be a criticalneed (Ghezzi and Gallardo 2013) In the Andean region the argument ismade that for obvious political reasons governments systematically under-invest in research and development relative to what they spend on transfersand this lack of spending on innovation holds back economic changeChapter 5 on Ghana argues that the emphasis on channelling rents to clientshas meant that they are not available for investment in alternative forms ofeconomic development and has contributed to the creation of a more broadlybased national capitalist class It is also possible that the combination of Dutchdisease effects global competition and free trade agreements that hinderpreferential treatment of domestic industry together made such diversifica-tion unlikely with or without targeted investment

One consequence of this is that under these regimes large-scale extractiveindustry has fostered social inclusion at least as much through contributingtaxes and royalties that have then been spent on targeted social protectionand other transfer programmes as it has through the labour market Thispattern varies across the countries with the more significant successes inpoverty reduction in Peru and Bolivia arguably reflecting the combination oftransfer programmes and the trickle-down effect of rapid economic growthfuelled by the mining and hydrocarbon sectors (Mosley 2017) It remains anopen question as to how durable such poverty reduction will be if commodityprices continue to fall or if investors choose not to proceed with new projectswhich would result in a reduction in the tax and royalty payments that formthe fiscal base of social protection programmes

Finally the fact that both Peru and Bolivia have had significant success inpoverty reduction over the last decade presents a challenge to argumentsabout the relations between political settlements and inclusive developmentWhile both contexts are characterized by a broadly competitive clientelistpolitical logic Boliviarsquos MAS government has been in power for a decadeand is beginning to display features that are more characteristic of dominantparty contexts It also espouses an ideological commitment to socialism Perulooks very different The same period has seen regular turnover of governingparties with swings from the right to centre-right and a more or less sus-tained ideological commitment to the market as the most effective allocatorof resources and investments Moreover these two quite distinct cases sharesimilar patterns of inclusion in terms of both poverty reduction and theforms taken for consultation over resource extraction with evidence ineach country of significant limits on community-level voice regarding the



213

viability design and governance of mining and hydrocarbons (HumphreysBebbington and Bebbington 2012 Gustafsson 2017 Schilling-Vacaflor2017) The implication is that the relations between inclusive developmentand natural resource extraction can be similar under differently structuredsettlements This may suggest equifinality in which the workings of differ-ent types of political settlements end up achieving similar outcomes bydifferent means or it may suggest different settlements following ultimatelysimilar strategies the promotion of rapid growth of extractive investmentcoupled with concerted efforts to redistribute the benefits of this growth

42 Dominance and Modes of Inclusion

Over the longue dureacutee considered in the four country studies there have beenseveral periods of more or less authoritarian and personalized dominantleaderdominant party rule The most obvious of these are the military gov-ernment of Peru from 1968 to 1980 and the period of Kenneth Kaundarsquos rulein Zambia from 1964 to 199111 As just noted Evo Moralesrsquo MAS governmentin Bolivia may also be easing into a dominant leaderpartymode of rule Theseperiods have been associated with state ownership of extractive industries (theMAS government has re-floatedre-strengthened state mining and oil com-panies)12 and a unionized workforce with benefits channelled primarily tounions and to human settlements around mine sites

The Kaunda and Peruvian military regimes did seek state-led modes of eco-nomic transformation but ultimately with little successmdashneither in economicdiversification nor in sustained poverty reduction Efforts to foster inclusionthrough employment or unions (but not political participation) also unrav-elled Thus while a case could be made that these authoritariandominantparty systems did encourage development policy that looked beyond theshort-term need to recruit clients for electoral success (MAS being anexception as it is still subject to electoral disciplining) theywere not successfulin converting these visions into sustainable forms of social inclusion This is sobecause of limited governing and technical capacity and (in Zambiarsquos case)because of falling commodity prices So while the Levy and Walton (2013)frameworkmight go someway in explaining how and why certain ideas aboutdevelopment and inclusion emerged under these authoritarian systems itremains the case that these ideas failed on their own terms

43 Horizontal and Vertical Power Relations and PiecemealInstitutional Reform

In each of the four countries a significant part of the post-1995 expansion oflarge-scale extractive industry has occurred in non-traditional areas formining



214

and hydrocarbons13 In most instances these have also been areas occupiedby resource-poor and politically excluded populations Examples include theethnically diverse communities of North-Western Province in Zambia longexcluded from the CopperbeltndashLusaka axis of power the resource-poor muni-cipalities and historically marginalized Guaraniacute and Weenhayek peoples ofthe sparsely populated dry Chaco of Bolivia chronically poor peasant andindigenous communities of the Peruvian Andes and resource-poor commu-nities in Ghana In Khanrsquos (2010) terms expansion has largely occurred inareas occupied by lower-level factions some of them ostensibly within thedominant coalition others notmdashbut in all cases these have been groups inpositions of relative exclusion from centres of power

However as noted in Subsection 31 this self-same expansion has increasedthe potential political leverage of these excluded groups insofar as they cancomplicate company access to the subsoil This leverage has increased furtheras transnational and national urban actors concerned with rights environ-mental impacts and justice have reached out to these factions Often theresponse of the elites within the dominant coalition has been to try andco-opt these newly empowered actors and this has sometimes been success-ful However at the same time themobilization (or threat of mobilization) onthe part of these factions has also induced a series of institutional reforms Thishas perhaps been most evident in Peru where in the face of conflict govern-ments have introduced new laws and regulations on environmental impactprior consultation revenue sharing and local land-use planning amongothers These regulations have however been introduced in response tohorizontal pressures rather than because of fundamental changes in develop-ment thinking among the elites and within the dominant coalition As aresult these reforms have also been introduced in a piecemeal fashion andare fragile and subject to reversal This use of institutional change in responseto specific claims and perceived urgencies has tended to produce governancearrangements that lack strategic coherence

44 ASM as a Constraining Form of Horizontal Power

In Bolivia Ghana and Peru though to a lesser extent in Zambia the last threedecades have been associated with the continuing and substantial growth ofan artisanal small- and medium-scale mining sector This sector which iscomposed largely of poor un- or under-employed parts of the rural and urbanpopulation has emerged from factions long excluded from the formal econ-omy as in the case of communities affected by the expansion of the extractivefrontier noted above There are two significant exceptions to this trend Firstthe sector also incorporates relatively significant owners of capital These arethe entrepreneurs who provide the larger-scale machinery to miners organize



215

work gangs control marketing and in some instances participate in laun-dering illegally sourced investment capital andor the illegally extracted goldSecond in the specific case of Bolivia a number of these miners were previ-ously members of the minersrsquo union of the pre-1985 period When unionworkers were laid off as part of structural adjustment programmes some weregiven mining licences as compensation These rights have become part of thebasis for the growing informal sector Importantly such resource rights arealso a key asset with which these miners have sought to negotiate with larger-scale companies interested in mining the areas to which the formerly laid-offminers now hold mineral rights

For these different reasons the ASM sector has emerged as a particularlypowerful faction Its influence resides in the fact that it not only controlsaccess to the same subsoil often sought by expanding large-scale miningoperations but in Ghana Peru and Bolivia is also responsible for a substan-tial percentage of all gold leaving the country In addition the low-techlabour-intensive nature of ASM means that the sector generates many morejobs than does large-scale mining This combination of factors has meant thatthese sectors have had the potential to influence dominant coalitions in moresignificant ways than do dispersed communities municipalities environmen-talists and others with their more specific claims In Bolivia the mobilizingpower of the cooperatives hasmeant that they were able to exercise significantinfluence over new mining legislation in 2014 In Peru and Bolivia there isevidence to suggest that the sector (or at least important actors within thesector) has been able to use its resources to influence the election of subna-tional and national representatives In Ghana the ASM sector provides liveli-hoods to over 1million people and produces around one-third of gold exportsThis sheer scale coupled with the sectorrsquos links to local chiefs and businesselites gives it power As we note in Chapter 5 on Ghana lsquo[s]upporting small-scale mining is one simple way for politicians to appear sympathetic to therural unemployed youth and the families they financially support (Teschner2012) and lsquo[i]n a country where presidential elections are sometimes wonby less than 50000 votes it is easy to understand the political relevance ofgalamsey operators to ruling political elites and in shaping the political settle-ment around mining sector governance more broadlyrsquo

45 Cautionary Insights From the Longue Dureacutee

The longue dureacutee perspective taken in our country studies has been soberingNotwithstanding the many specific regulatory changes documented and themany shifts to and fro in dominant political coalitions the impression isthat underlying productive structures have been relatively immutable Atthe beginning of the periods under analysis these four economies were



216

dependent on resource extraction (at least for foreign direct investment(FDI) fiscal revenue and export earnings) and by 2015 they were stilldependent on resource extraction albeit sometimes of different naturalresources Notwithstanding the emergence of more complex urban serviceand informal economies over time or of a moderately diversified exportagriculture and agro-industry these four countries have not moved farbeyond economies that are dependent on the primary sector They haveseen no real success in developing and diversifying a secondary sector andcontinue to have public budgets that are dependent on the rise and fall ofcommodity prices Put another way they have not been terribly successfulin developing stable durable and diverse channels of inclusion througheither the labour market or public expenditure

This presents the slightly perplexing dilemma of how to relate a picture ofpolitical settlements that change but a productive structure that changes verylittle Even if taking a longer historical view allowed us to see beyond theshort-term political volatility that occupies theminds ofmany commentatorswe did still identify a number of changes between political settlements overthe last century in each of the countries studied If put very crudely ourindependent variable was changing but our dependent variable was stabledoes this mean that there is no relationship between the two

Our resolution of this dilemma has been to talk of lsquometa-settlementsrsquo Thisidea initially emerged from our analysis of Zambia in an effort to tie togetherfive distinct political settlements running from the colonial era to the presentUltimately we identified two key phenomena that have persisted acrossdifferent settlements authoritarianism and a narrow (vulnerable) elite Toquote from Chapter 4 the first is manifest in a lsquoconcentration of power inthe hands of the executive branch and a weakening of institutions of account-ability including parliament and the judiciaryrsquo This authoritarianism persistseven after the emergence of multiparty elections With regard to the secondZambian leadership has tended to pass between relatively few hands even ifthis change of power occurs often as in recent years This notion of lsquometa-settlementrsquo became useful for seeing enduring trends in political relationshipsacross all four countries Examples of such durable phenomena include thelong historical tug-of-war over control of natural resources between chiefs andcentral government in Ghana the recurring struggle over political controlamong Boliviarsquos regional elites funded by the most lucrative subsoil resourceof the moment or the persistent centralized control of resource rents in Peruuntil the last decade

This observation raises a follow-on question if certain features have been soresilient to change why is this so The experiences of Bolivia Ghana Peruand Zambia suggest that part of the answer to this question may have to dowith natural resource dependence itself First through creating the reality or



217

the prospect of significant rents the very imaginary of subsoil wealth createsincentives that encourage political and economic elites to focus on capturingthese rents rather than seeking economic and political innovations thatmight create new value Second by producing highly uneven geographies ofaccumulation and dispossession and creating incentives to particular regionsto increase their capture of rents the natural resource economy creates seriousobstacles to the building of broad-based coalitions that share a nationaldevelopment imaginary (Watts 2004a 2004b) Natural resource-dependenteconomies may tend to foster political splintering more than alliance

Having said this it is important not to overstate the idea of underlyingcontinuity and limited change The emergence of powerful actors along withchanges in foundational ideas have modified elements of the political settle-ments in each of the four countries in ways that have enhanced inclusioncolonial subjects have become citizens with rights and voting power in all fourcountries access to rule has become somewhat less determined by race orfamily and degrees of competition among economic elites have increased Ingeneral competitive clientelist settlements have been associated with a sus-tained widening of citizenship rights more than dominant partydominantleader settlements Competitive clientelist settlements while certainly notfree of corruption have been characterized by relatively greater degrees ofpolitical accountability in the use of resource rents The nature of settlementshas therefore had important implications for the relationships betweenresource-dependent economies and the nature and degree of social inclusionWhere the nature of settlements appears to have had less effect has been in thesuccessful fostering of economic diversification and reduction of the weight ofresource rents within the national economy

5 A Long-Term Natural Resource Governance Lenson Political Settlements

Mineral and hydrocarbon resources are intensely local Even when it can seemthat the extractive frontier is everywhere (especially when representedthrough maps of exploration licences) it remains the case that commercialquantities of these resources are located in relatively few places and many ofthe environmental and social consequences of their extraction are relativelyconcentrated in space14 At the same time mineral resources have been part ofinternational value chains that have become increasingly globalized andintegrated at least since the Iberian pillage of Latin America Over the lastcentury these commodity markets have been further internationalized withprices set globally and an increasingly wide range of transnational actorsinterested in securing access to the resources In between these two scales



218

subsoil resources are also deeply national Their commodification has oftenbeen one of the principal pillars (if not the pillar) of national economiesserving as an important source of fiscal revenue and foreign exchange and adriver of national investment and elite formation through the capture ofrents Subsoil resources have also often become national icons Histories ofAndean identities cannot be told without reference to gold and silver thecentrality of mining and now natural gas to Bolivian nationalism is clear andZambian lsquoexpectations of modernityrsquo (Ferguson 1999) continue to passthrough copper And beyond the countries in which we worked oil is partof national and subnational identities in Nigeria (Watts 2004a) while in theUK the minersrsquo strike of 1984ndash85 was profound not just because coal was avaluable commodity that created jobs but also because it was part of nationaland class identities

These qualities of subsoil resources have implications for themes withinany discussion of the politics of extractive industry governance and of pol-itical settlements in natural resource-dependent economies We summarizethe key arguments we have made in this chapter and throughout our countrychapters with six themes of special significance (1) the distinction betweennational settlements and policy domain settlements (2) scalar relationswithin political settlements (3) the implications of natural resource rentsfor settlements (4) the scale of investment required to develop mineral andhydrocarbon deposits (5) the symbolic power of subsoil resources (6) thelongue dureacutee of resource extraction In the following paragraphs we elaborateon each of these

While some approaches (Hickey and Sen 2016 Levy and Kelsall 2016)distinguish between the overall national political settlement andmore specificsettlements in particular policy domains (such as education health or socialprotection) this distinction may not always be relevant for natural resourceextraction In those instances in which the mining oil and gas sectors arecentral to the national political economy identity formation and the consti-tution of national political actors it may be unhelpful to imply a sharpdistinction between the overall political settlement and the natural resourcepolicy domain Instead these two lsquospacesrsquo may be mutually constitutive Thehistorical experiences of Bolivia Ghana Peru and Zambia show just howcentral mining and hydrocarbons have been to national political debatesOver extended periods in each country the mining and hydrocarbons lsquopolicydomainrsquo has been the key national political domain

Second the local national and global dimensions of resource extractionalso imply that an analysis of the politics of extractive industry governanceand of the constitution of political settlements must work across scales Thetransnational enters in the form of global investment capital and practicesmultinational companies regulation of global commodity markets global



219

price trends international financial institutions transnational civil societyand global environmental and human rights frameworks By the sametoken the localized nature of minerals and hydrocarbons means thattheir extraction consistently brings subnational actors into national andinternational dynamics Because local actors have significant influenceover the ability of companies and states to secure access to these naturalresources national and international elites often have to negotiate withthem and at times have to enrol them into broader political settlementsin order to be able to extract minerals and hydrocarbons In this sense thegeographically specific location of resources can frequently produce newsubnational elites with substantial power to influence the course of extract-ive industry development

A third special feature of subsoil resources derives from their ability toproduce significant rents especially during periods of commodity boomThe combination of relatively easy-to-capture lsquosuper-rentsrsquo and the potentialpower of local actors to restrict access to the subsoil means that the politicssurrounding resource extraction can be particularly prone to violence andcorruption In addition the potential to capture such rents can make theseresources singularly attractive to actors seeking to realize and finance a broadrange of other political projects We see diverse projects financed by theseresources across Chapters 2 to 5 In Bolivia MAS increased central governmentcapture of hydrocarbon rents to finance broad-based social redistributionChiefs in Ghana sought the means to consolidate territorial and politicalauthority through natural resource rents Copper revenues were central tothe nationalist post-colonial project in Zambia while in Peru the develop-ment of the mining sector was crucial to the effort of different post-internalconflict governments to establish political order in the highlands The politicsof extractive industry governance are thus also the politics of core financingmechanisms for the explicitly political and ideological strategies of elites ofdiverse types Political settlements analysis with its focus on elite strategy inrelation to lsquoexcluded factionsrsquo is particularly useful for drawing attention tothese types of relationship

Fourth and related to the prior point large-scale natural resource extractionprojects typically require substantial up-front investments which thenbecome immobile capital The same would apply for many infrastructuralprojects that often accompany resource extraction such as dams portstrunk roads and rail lines Such investments require significant lsquocrediblecommitmentrsquo from government (Sen 2013) to provide investors with thefinancial legal and physical security they demand in order to proceed withthese projects In order to commit to investments on such a scale companiesseek sizeable tax holidays or reductions as well as legal and contract securityBecause thefixity of investmentsmakes themmore vulnerable to expropriation



220

and the demands of localized protest and social conflict investors also seekphysical and juridical security from the state which can translate into assur-ances that public force will be used against protest and demands for legalexceptions and guarantees In the case of hydrocarbons the scale of neces-sary investment also makes this a sector dominated by large-scale capitalownership Consequently the sector is characterized by asymmetries ofpower knowledge and expertise which often can only be offset (albeitpartially) by social conflict public debate or relatively autonomous counter-vailing regulatory bodies within the state The exception to this pattern is thecase of ASMmdashan activity whose geography is itself related to the nature ofmineral deposits only some of which are accessible to ASM In these differ-ent ways the materialities of the mine well pipeline or resource deposithave implications for resource politics and lead economic and political elitesto establish agreements that can be resilient in the face of popular protestInsofar as it situates civic movementsrsquo holding power in relation to theseother players in the settlement and in relation to the ruling coalition polit-ical settlements analysis is useful in qualifying some of the more hopeful andpopulist sentiments that can inform studies that focus only on grassrootsresistance

Fifth the symbolic significance of subsoil resources means that lsquoideasrsquo takeon potentially causal power The implication is that the nature of the politicalsettlement has to be understood not just in terms of interests but also of thepolitics of ideas some of which have considerable political valence and acapacity to mobilize resistance (Hall 2010 Hickey 2012 Hickey et al2015) Across all four countries lsquoresource populismrsquo and lsquojusticersquo have beenand continue to be important ideas that have affected natural resource gov-ernance and social mobilization In the specific cases of Peru and Bolivia ideassurrounding indigenous peoplesrsquo rights of consultation have also influencednegotiations around mining and hydrocarbon investments The cultural sig-nificance and historical resonance of these ideasmdashand the extent to whichthey are mobilized by actors who draw no obvious gain from themmdashsuggeststhat this is clearly an instance in which ideas cannot be collapsed into inter-ests and that they have a causal effect on the constitution of settlements andthe governance arrangements pursued under those settlements The politics ofextractive industry governance is a clear illustration of Hallrsquos claim that lsquothepolitics of ideas is intrinsic rather than epiphenomenal to the processes ofcoalition formation that underpin institutional changersquo (2010 212)

Finally the longue dureacutee view taken in this project complicates some of thecategorical frameworks used in political settlements thinking In particular thedistinction between competitive clientelistdominant leader-party forms ofsettlement loses some of its cogency (cf Khan 2010 Levy and Walton 2013)Competitive clientelism refers to systems in which the elites need to compete



221

with supporters in order to gain or maintain power in contrast to a dominantleaderparty system in which the elites are able to wield power relativelyuncontested (Levy and Walton 2013 Levy 2014) At the very least our ana-lysis makes the distinction between these two types of settlements appeardescriptive rather than explanatory insofar as it begs the question of whymore dominant or competitive modes of rule emerge in the first place Whilesome argue that the purpose of political settlements theory is precisely tounderstand how particular forms of lsquosettledrsquo relationships affect developmentprocesses and outcomes looking at politics over the longue dureacutee demandsexplanation of how and why settlements change and how far these changesare related to the dynamics of development

In the country analyses in Chapters 2 to 5 a view of the longue dureacutee alsoallowed us to map more explicitly the rise and demise of different politicalactors as a means of explaining how certain periods of rule emerged In thisregard the long-term historical approach of this research has made more useof Khanrsquos (2010) emphasis on understanding how boundaries of horizontaland vertical exclusion are negotiated and the implications of these bound-aries for the ways in which dominant coalitions form and unravel and howresources are governed The country analyses have also made clear theimportance of understanding the causal processes that explain how certainactors acquire or lose holding power15 in ways that influence their positionwithin a political settlement In particular the materiality of the resourcetransnational linkages and certain ideas were each often central to theserelationships of relative power as were the patterns of accumulation anddispossession unleashed by prior political settlements

Taking a longer-term view has helped guard against associating settlementswith regimes Put another way settlements for the most part last much longerthan governments In the case of Peru for instance just three periods ofsettlement are identified between 1895 and 2016 even though as we notedin the introduction to Chapter 2 lsquothe country has had twelve constitutionsand over 100 governments [since independence in 1821] while its economicsystem has run the gamut from extreme liberalism to statism and back againrsquoThese settlements are associated chronologically with periods of oligarchicrule and foreign capital domination statism and accelerated social changeand neoliberalism characterized by both competitive authoritarianism andmultiparty democracy These longer-term readings of settlements make clearthat certain elite pacts associated with key organizing ideas (eg foreign capitaldominance neoliberalism curtailment of citizenship rights) endure wellbeyond specific governments Thus while things may appear to changefrom government to government this should not divert attention from thepersistence of lsquometa-settlementsrsquo that are much more stable over time andinvolve similar elites and foundational ideas



222

6 Final Words

Political settlements and natural resource extraction exist in a relationship ofmutual constitution from which there is no escape The nature of the politicalsettlement has significant influence on how extractive industries are gov-erned and how their role in national and local development is understoodThe settlement defines those elites whose interests will have most influenceon resource extraction but also the relationships of incorporation and clien-telism that elites must finance through the use of resource rents if they areto sustain the settlement Conversely the existence of significant subsoilresources that are capable of generating large rents defines the terrain onwhich settlements are constituted negotiated and contested In some sensethese resource rents become one of the main stories in town a narrative axisaround which political actors revolve in their attempts to capture those rentswhether for personal gain or to finance particular visions of society This doesnot mean that natural resources or resource rents define the actual natureof the settlementmdashthere is much room for creativity and change it doesmeanhowever that whatever the political innovations that might emerge in suchprocesses of change these innovations will never escape the incentives andideas brought into being by natural resource wealth

Ideas andmateriality are critically important in bringing new political actorsinto being In natural resource politics much mobilization and aggregationof interests and motivations hinges upon shared ideas that articulate move-ments and also upon the shared opportunities and losses both real andperceived which derive from the material nature and geographical locationof the resource in question Ideas are also critical because they frame debatesand bound the limits of the thinkable they can therefore restrict politicalaction and imagination while also becoming the targets of actions that aim tochallenge and reframe these dominant ideas

And finally for the four countries in which we have worked transnationalfactors have been central to the politics of natural resource governance sincecolonial times Global valuation of gold copper tin silver and hydrocarbons(the main resources that we have discussed) has been the primary factorbringing the subsoils of these four countries into global circuits of financeWith these valuations have come transnational demands explorers andinterests as much in colonial times as in the present It is impossible tounderstand the nature of national resource politics absent an attention tothese global actors and factors

Regardless of whether one finds the language of political settlements usefulthe long histories of Bolivia Ghana Peru and Zambia make palpably clearthat pact making contestation negotiation and violence have been part andparcel of the governance of natural resource extraction There has never been



223

nor will there ever be a national collective meeting of minds on what consti-tutes lsquogoodrsquo natural resource governance there is only ever some degree ofbalance (lsquosettlementrsquo) among consent dissent and imposition By the sametoken there is rarely if ever a fully collective agreement on the sort oflsquoinclusive developmentrsquo towards which this lsquogoodrsquo resource governanceshould be oriented Some voices some interests and some ideas are alwaysmore excluded and less powerful than others Analytically what matters is tounderstand how certain voices interests and ideas become ascendant inresource governance and how they are able to stabilize this ascendancyPolitically what matters is to use such an analysis to pursue the balance ofpower interests and ideas that the actor in question is seeking At least in thecountries studied here resource governance was never just a question ofgetting the institutions right It has only ever been part of a political strategythat in turn has its own political effects

Endnotes

1 This term is not used in a pejorative sense but rather to refer to the style and thewider circulation and recognition of the text

2 Another example of this route is the Temer government of Brazil which is seekingaggressively to increase mining and other forms of resource extraction in order tohelp fill budget gaps produced by crises in other sectors and in the macroeconomy

3 The absence or failure of policies to offset the stagnation of small-scale farming wasanother factor in the movement of younger mostly male adults into ASM

4 After 2006 Bolivia diverges from this pattern somewhat That said though theMAS government has relaunched COMIBOL as part of its resource populist endeav-ours investment in large-scale mining is still dominated by international compan-ies Note that investment in small-scale mining which responds to very differenteconomic and social dynamics and is less formalized is dominated by the domesticlicit and illicit private sector

5 Peru is a partial exception in that while dominated by international investors thereis also a national mining capitalist class invested mostly in medium-scale mines

6 Two of these actors were for instance important figures in the 2016 nationalpresidential and congressional elections

7 Stools are a form of local authority in Ghana Note also that a tenth of this 10 per centcanbe retained by theOffice of Administration of Stool Lands for administrative costs

8 In Ghana in 2009 Peru in 2011 and Zambia in 20089 Though these offices have since late 2016 become somewhat more fragile

10 The precise timing varies slightly among the three countries Peru is a partialexception because the authoritarian Fujimori regime (1990ndash2000) introducedmany such reforms However early shock and neoliberalizing reforms (albeit notrelated to the mining sector) were introduced under the preceding competitive



224

regimes from 1981ndash85 and 1985ndash90 Also after 2000 elected governments havemaintained the Fujimori reforms

11 In particular during his period of one-party rule from 1973 onwards12 In Peru one US mining company survived nationalization13 There has also been expanded investment in traditional areas14 Many other consequences reach much further of course the downstream effects of

oil spills or tailing dam failures the climate effects of hydrocarbon burning thenational governance effects of severe subnational conflict over resources etc

15 Khanrsquos notion of lsquoholding powerrsquo refers to the power of actors to hold their positionand push back on the ability of other actors to impose their interests



225


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Abdulai A-G and S Hickey 2016 lsquoThe politics of development under competitiveclientelism Insights from Ghanarsquos education sectorrsquo African Affairs 115(458) 44ndash72

Abdulai A-G and D Hulme 2015 lsquoThe politics of regional inequality in Ghana Stateelites donors and PRSPsrsquo Development Policy Review 33(5) 529ndash53

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Acemoglu D and J A Robinson 2012Why Nations Fail The Origins of Power Prosperityand Poverty New York Crown

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Acemoglu D S Johnson and J A Robinson 2002 lsquoReversal of fortune Geographyand institutions in the making of the modern world income distributionrsquo QuarterlyJournal of Economics 117 1231ndash94

Acheampong J 2015 lsquoSmall-scale gold exports on the risersquo Graphic online 14April Available at httpwwwgraphiccomghbusinessbusiness-newssmall-scale-goldexports-on-the-risehtml accessed 26 May 2017

Addy S N 1998 lsquoGhana Revival of the mineral sectorrsquo Resources Policy 24(4) 229ndash39Afryie K J K Ganle and A A Adomako 2016 lsquoThe good in evil A discourse analysisof the galamsey industry in Ghanarsquo Oxford Development Studies 44(4) 493ndash508

Akabzaa T 2009 lsquoMining in Ghana Implications for national economic developmentand poverty reductionrsquo In Mining and Development in Africa edited by B Campbellpp 25ndash65 Montreal Pluto Publishers

Akabzaa T and A Darimani 2001 lsquoA study of impacts of mining sector investment inGhana on mining communitiesrsquo Report prepared for the Technical Committee onStructural Adjustment Participatory Review Initiative (SAPRI) on Ghana

Amanor K S 2008 lsquoThe changing face of customary land tenurersquo In Contesting Landand Custom in Ghana State Chief and the Citizen edited by J M Ubink andK S Amanor pp 55ndash81 Amsterdam Leiden University Press

Amanor K S 2009 lsquoSecuring land rights in Ghanarsquo In Legalising Land Rights LocalPractices State Responses and Tenure Security in Africa Asia and Latin America edited by


J M Ubink A J Hoekema and W J Assies pp 97ndash131 Leiden Leiden UniversityPress

Amnesty International 2014 Peru Five Years on from Bagua Violence and Still No Justicefor Victims Lima Amnesty International

Anin T E 1994 Gold in Ghana 4th Edn Accra Selwyn PublishersArellano-Yanguas J 2008 A thoroughly modern resource curse The new natural

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Arellano-Yanguas J 2014 lsquoIndustrias extractivas descentralizacioacuten y desarrollo localEconomiacutea poliacutetica de poliacuteticas fiscales y redistributivas en Peruacute y Boliviarsquo ReporteAnual de Industrias Extractivas II La Paz Bolivia CEDLA

Arellano-Yanguas J 2016 lsquoMining policies in Humalarsquos Peru A patchwork of impro-vised nationalism and corporate interestsrsquo In The Political Economy of NaturalResources and Development From Neoliberalism to Resource Nationalism edited by PaulA Haslam and Pablo Heidrich pp 174ndash90 New York Routledge

Arhin K 1967 lsquoThe financing of the Ashanti expansion (1700ndash1820)rsquo Africa 37(3)283ndash91

Arhin K 1978 lsquoGold-mining and trading among the Ashanti of Ghanarsquo Journaldesafricanistes 48(1) 89ndash100

Armstrong A T 2008 lsquoGold strike in the bread basket Indigenous livelihoods theWorld Bank and territorial restructuring in Western Ghanarsquo Development ReportNo18 Institute for Food and Development Policy Oakland CA

Aryee B N A 2001 lsquoGhanarsquos mining sector Its contribution to the national economyrsquoResources Policy 27 61ndash75

Aryee B N A 2014 lsquoRecent trends and developments in Ghanarsquos mining fiscalregimersquo PowerPoint presentation at the workshop for ECOWAS public officials onthe implementation of the African Mining Vision (AMV) and the ECOWAS MineralsDevelopment Policy (EMDP) 3ndash4 November Accra

Aryeetey E and A McKay 2007 lsquoGhana The challenge of translating sustainedgrowth into poverty reductionrsquo InDelivering on the Promise of Pro-poor Growth Insightsand Lessons from Country Experiences edited by T Besley and L J Cord pp 147ndash68New York and Washington DC Palgrave Macmillan and World Bank

Asante E P 2016 lsquoPathways to Inclusive Development in Ghana Oil SubnationalndashNational Power Relations and Ideasrsquo DPhil thesis Faculty of Humanities ManchesterUniversity of Manchester

Assies W 2004 lsquoBolivia A gasified democracyrsquo Revista Europea de Estudios Latinoamer-icanos del Caribe 76 25ndash43

Aste J 1986 Mineriacutea Peruana Empresas Estatales y Generacioacuten de Divisas 1970ndash1984Lima Fundacioacuten Friedrich Ebert

Aterkyi II O K 2007 lsquoStatement on behalf of the Traditional Authorities in Ghanathrough the National House of Chiefs for Successful Implementation of the EITIrsquoAccra Ghana 15 January Available at httpwwwgheitigovghsiteindexphpoption=com_phocadownloadampview=categoryampdownload=16statement-of-behalf-


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Bakker K and G Bridge 2006 lsquoMaterial worlds Resource geographies and the matterof naturersquo Progress in Human Geography 30(1) 5ndash27

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Ballantyne Janet (1976) lsquoThe Political Economy of Peruvian Gran Mineriacutearsquo Doctoraldissertation Cornell University USA Ann Arbor MI University Microfilm

Bansah K J A B Yalley and N Dumakor-Dupey 2016 lsquoThe hazardous nature ofsmall-scale underground mining in Ghanarsquo Journal of Sustainable Mining 15(1) 8ndash25

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Barragaacuten R 2008 lsquoOppressed or privileged regions Some historical reflections onthe use of state resourcesrsquo In Unresolved Tensions Bolivia Past and Present editedby J Crabtree and and L Whitehead pp 83ndash104 Pittsburgh PA University ofPittsburgh Press

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BCRP (Banco Central de Reserva del Peruacute) 2016 lsquoSeries Estadiacutesticasrsquo Available athttpsestadisticasbcrpgobpeestadisticasseries accessed 20 February 2018

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Bebbington A L Hinojosa D Humphreys Bebbington M L Burneo and XWarnaars2008 lsquoContention and ambiguity Mining and the possibilities of developmentrsquoDevelopment and Change 39(6) 887ndash914

Bebbington A D Humphreys Bebbington J Bury J Lingan J P Muntildeoz andM Scurrah 2008 lsquoMining and social movements Struggles over livelihood andrural territorial development in the Andesrsquo World Development 36(12) 2888ndash905

Bebbington A M Scurrah and A Chaparro 2014 lsquoEl Estado Compensador peruano yla persistencia del modelo neondashextractivista seis hipoacutetesis sobre el (no-) cambioinstitucionalrsquo Debate Agrario 46 29ndash50

Bebbington A E Arond and J Dammert 2017 lsquoExplaining diverse national responsesto the extractive industries transparency initiative in the Andes What sort of politicsmattersrsquo Extractive Industries and Society 4(4) 833ndash41

Becker D 1983 The New Bourgeoisie and the Limits of Dependency Mining Class andPower in lsquoRevolutionaryrsquo Peru Princeton NJ Princeton University Press

Berdegueacute J A Bebbington and A Escobar J 2015 lsquoConceptualizing spatial diversityin Latin American rural development Structures institutions and coalitionsrsquo WorldDevelopment 73 1ndash10

Berry S 2008 lsquoAncestral property Land politics and ldquothe deeds of the ancestorsrdquo inGhana and Cocircte drsquoIvoirersquo In Contesting Land and Custom in Ghana State Chief and theCitizen edited by J M Ubink and K S Amanor pp 27ndash53 Leiden Leiden UniversityPress

Bielich C 2009 La guerra del centavo Una mirada actual al transporte puacuteblico en LimaMetropolitana Lima CIES IEP Available at httparchivoieppetextosDDTddt155pdf accessed 20 February 2018

Blaser M 2010 Storytelling Globalization from the Chaco and Beyond Durham NC DukeUniversity Press

Bloch R and G Owusu 2012 lsquoLinkages in Ghanarsquos goldmining industry Challengingthe enclave thesisrsquo Resources Policy 37(4) 434ndash42

Boakye D S Dessus Y Foday and F Oppong 2012 lsquoInvesting the mineral wealth indevelopment assets Ghana Liberia and Sierra Leonersquo Policy Research WorkingPaper Washington DC World Bank

Boampong O 2012 lsquoGhanarsquos golden opportunity A district struggles with striking itrichrsquo Revenue Watch Institute New York

Bob-Milliar G M 2012 lsquoPolitical party activism in Ghana Factors influencing thedecision of the politically active to join a political partyrsquo Democratization 19(4) 668ndash8

Boix C 2008 lsquoSpain Development democracy and equityrsquo In Institutional Pathwaysto Equity Addressing Inequality Traps edited by A Bebbington A Dani A de Haanand M Walton pp 217ndash44 Washington DC World Bank

Booth D 2015 lsquoWhat next for political settlements theory and African developmentrsquoPaper submitted to the ESID Synthesis workshop Dunford House Midford UK 8ndash11November

Bornschlegl T 2017 lsquoThree Snapshots into Complexity A Political Ecological Analysisof the Regulatory Enforcement of Environmental Laws in the Oil and Gas Sector in


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Brautigam D and K Gallagher 2014 lsquoBartering globalization Chinarsquos commodity-backed finance in Africa and Latin Americarsquo Global Policy 5(3) 346ndash52

Bridge G 2004 lsquoContested terrain Mining and the environmentrsquo Annual Review ofEnvironment and Resources 29 205ndash59

Brown K 2012 A History of Mining in Latin America From the Colonial Era to the PresentAlbuquerque NM University of New Mexico Press

Brunnschweiler C and E Bulte 2008 lsquoLinking natural resources to slow growth andmore conflictrsquo Science 320 (2 May) 616ndash17

Burga M and A F Galindo 1979 Apogeo y crisis de la Repuacuteblica Aristocraacutetica oligarquiacuteaaprismo y comunismo en el Peruacute 1895ndash1932 Lima Rikchay Peruacute

Bury J 2005 lsquoMining mountains Neoliberalism land tenure livelihoods and thenew Peruvian mining industry in Cajamarcarsquo Environment and Planning A 37(2)221ndash39

Bury J 2011 lsquoNeoliberalismo mineriacutea y cambios rurales en Cajamarcarsquo In MineriacuteaMovimientos Sociales y Respuestas Campesinas Una Ecologiacutea Poliacutetica de las TransformacionesTerritoriales edited by Anthony Bebbington Lima Instituto de Estudios Peruanos

Bush R 2009 lsquo ldquoSoon there will be no-one left to take the corpses to the morguerdquoAccumulation and abjection in Ghanarsquos mining communitiesrsquo Resources Policy 3457ndash63

Bush R 2010 lsquoMining and improvement Beyond foreign direct investmentrsquo InEnclaves of Wealth and Hinterlands of Discontent Foreign Mining Companies in AfricarsquosDevelopment edited by G Hilson pp 102ndash16 Accra TWN-Africa

Cameron M 1997 lsquoPolitical and economic origins of regime change The eighteenthbrumaire of Alberto Fujimorirsquo In The Peruvian Labyrinth Polity Society Economyedited by Maxwell Cameron and Philip Mauceri pp 37ndash69 University Park PAPennsylvania State University Press

Campbell B 1998 lsquoLiberalisation deregulation state promoted investment Canadianmining interests in Africarsquo Minerals and Energy-Raw Materials Report 13 (4)14ndash34

Cano Aacute 2015a lsquoMineriacutea artesanal y en pequentildea escala Explorando los viacutenculos entrela poliacutetica nacional y el desarrollo inclusivorsquo Lima CIUP Draft Working Paper

Cano A 2015b Small-scale Curse or Possibility of Inclusive Development Researching thePolitics of Artisanal Informal and Illegal Mining in Peru (1930ndash2015) Mimeo Universi-dad del Paciacutefico Lima

Capriles Villazon O 1977 Historiacutea de la Mineriacutea Boliviana La Paz Banco Minero deBolivia

Carson M S Cottrell J Dickman E Gummerson T L Yanliang M NorikoT Catarina and T C Uregian 2005 Managing Mineral Resources through PublicndashPrivatePartnerships Mitigating Conflict in Ghanaian Gold Mining Princeton NJ WoodrowWilson School of Public and International Affairs Princeton University

Castro J F G Yamada and N Oviedo 2016 lsquoRevisitando el coeficiente de Gini en elPeruacute el rol de las poliacuteticas puacuteblicas en la evolucioacuten de la desigualdadrsquo LimaDocumento de Trabajo CIUP


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CEDIB (Centro de Documentacioacuten e Informacioacuten Bolivia) 2013 lsquoMineriacutea en Boliviarsquo(PowerPoint slides) Available at httpwwwsomossurnetdocumentosMineria_Bolivia_CEDIB2013pdf accessed 20 February 2018

CEDLA (Centro de Estudios de Desarrollo Laboral) 2014 Reporte Anual de IndustriasExtractivas II La Paz CEDLA

Charpentier S and J Hidalgo 1999 Las Poliacuteticas Ambientales en el Peruacute Lima AGENDAPERU

ChazanN 1982 lsquoEthnicity and politics inGhanarsquo Political Science Quarterly 97(3) 461ndash85Cheelo K H 2008 lsquoBehind the Economic Figures Large-Scale Mining and Rural

Poverty Reduction in Zambia the Case of Kansanshi Copper Mine in SolwezirsquoMA dissertation Massey University Palmerston North New Zealand

Chong A J Galdo and J Saavedra 2007 lsquoInformality and productivity in the labormarket Peru 1986ndash2001rsquo Research Department Working Paper Series WashingtonInter-American Development Bank

Cleaves P and M Scurrah 1980 Agriculture Bureaucracy and Military Government inPeru Ithaca NY Cornell University Press

Coffey International Development 2011 lsquoPolitical economy of Ghana and thematicstrategy development for STAR-Ghanarsquo Inception Report for DFID STAR-GhanaDfIDGhana Accra

Collier D et al 1979TheNewAuthoritarianism in Latin America Princeton NJ PrincetonUniversity Press

Collier P A Hoeffler and D Rohner 2009 lsquoBeyond greed and grievance Feasibilityand civil warrsquo Oxford Economic Papers 61 1ndash27

Conaghan Catherine and James Malloy 1994 Unsettling Statecraft Democracy andNeoliberalism in the Central Andes Pitt Latin American Series Pittsburgh PA Universityof Pittsburgh Press

Concytec 2017 lsquoPrimer Censo revela baja inversioacuten en investigacioacuten y desarrollo en elPeruacutersquo Consejo Nacional de Ciencia y Tecnologia May 19 2017 Available at httpsportalconcytecgobpeindexphpnoticias1051-primer-censo-revela-baja-inversion-en-investigacion-y-desarrollo-en-el-peru accessed 20 February 2018

Conrad R F 2014 lsquoMineral taxation in Zambiarsquo In Zambia Building Prosperity fromMineralWealth edited by C S Adam P Collier andM Gondwe pp 82ndash109 OxfordOxford University Press

Contreras C and M Cueto 2009 Historia del Peruacute Contemporaacuteneo Lima Instituto deEstudios Peruanos

Contreras M 1993 lsquoThe Bolivian tin mining industry in the first half of the twentiethcenturyrsquo In Institute of Latin American Studies (ILAS) Research Papers p 32 LondonUniversity of London

Cooper F A Isaacman F Mallon W Roseberry and S Stern 1993 ConfrontingHistorical Paradigms Peasants Labor and the Capitalist World System in Africa andLatin America Madison WI University of Wisconsin Press

Cord L M E Genoni and C R Castelan 2015 Shared Prosperity and Poverty Eradicationin Latin America and the Caribbean Washington DC World Bank

Cotler J 1995 lsquoPolitical parties and the problems of democratic consolidation inPerursquo In Building Democratic Institutions Party Systems in Latin America edited by


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Scott Mainwaring and Timothy R Scully pp 323mdash53 Stanford CA Stanford Uni-versity Press

Coumans C 2011 lsquoOccupying spaces created by conflict Anthropologists develop-ment NGOs responsible investment and miningrsquo Current Anthropology 52 S29ndashS40

Crabtree J (ed) 2011 Fractured Politics Peruvian Democracy Past and Present LondonInstitute of Latin American Studies

Crabtree J and L Whitehead (eds) 2008 Unresolved Tensions Bolivia Past and PresentPittsburgh PA University of Pittsburgh Press

Craig J R 1999 lsquoState Enterprise and Privatisation in Zambia 1968ndash1998rsquo PhDdissertation University of Leeds

Crawford G and G Botchwey 2017 lsquoConflict collusion and corruption in small-scalegold mining Chinese miners and the state in Ghanarsquo Commonwealth and Compara-tive Politics February 9 1ndash28 doi 1010801466204320171283479

Crook R 2005 lsquoThe role of traditional institutions in political change and develop-mentrsquo CDDODI Policy Brief No 4 November

Cuba N A Bebbington J Rogan and M Millones 2014 lsquoExtractive industrieslivelihoods and natural resource competition Mapping overlapping claims in Peruand Ghanarsquo Applied Geography 54 250ndash61

CVR (Comisioacuten de la Verdad y Reconciliacioacuten) 2003 Informe final Lima CVRDaily Express (2013 March 21) lsquoReview of mining stability agreements on coursersquoAvailable at httpdailyexpressonlinecomreview-of-mining-stability-agreements-on-course-2013-03-21 accessed 2 January 2015

Daily Graphic 2016 lsquoObuasi Galamsey operators on rampagersquo 19 October Availableat httpwwwgraphiccomghnewsgeneral-newsobuasi-galamsey-operators-onrampage html accessed 11 May 2017

Daily Guide 2013 lsquoNPP scribe blasts Mahama over galamseyrsquo 7 June Available athttpswwwmodernghanacomnews4675772122npp-scribe-blasts-mahama-overgalamseyhtml accessed 11 May 2017

Dargent E 2015 Technocracy and Democracy in Latin America The Experts RunningGovernment Cambridge Cambridge University Press

Dargent E and P Muntildeoz 2012 lsquoPeruacute 2011 Continuidades y cambios en la poliacutetica sinpartidosrsquo Revista de Ciencia Poliacutetica 32(1) 245ndash68

Dargent E J C Orihuela M Paredes and E M Ulfe (eds) 2017 Resource Booms andInstitutional Pathways The Case of the Extractive Industry in Peru London PalgraveMacmillan

Davis G A 1995 lsquoLearning to love the Dutch disease Evidence from the mineraleconomiesrsquo World Development 23 (10) 1765ndash79

Davis G A 2009 lsquoExtractive economies growth and the poorrsquo InMining Society and aSustainable World edited by J P Richards pp 37ndash60 Berlin Heidelberg SpringerndashVerlag

Davis G A and J Tilton 2005 lsquoThe resource cursersquo Natural Resources Forum 29(3)233ndash42

De Echave J and A Diez 2013 Maacutes allaacute de Conga Lima RedGE Cooperaccioacutende la Cadena M 2015 Earth Beings Ecologies of Practice across Andean Worlds DurhamNC Duke University Press


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Debrah E 2013 lsquoAlleviating poverty in Ghana The case of Livelihood Empowermentagainst Poverty (LEAP)rsquo Africa Today 59(4) 41ndash67

Defensoriacutea del Pueblo 2017 Reportes mensuales conflictos sociales 2005ndash2016 Availableat httpswwwdefensoriagobpetemasphpdes=3r accessed 20 February 2018

Dell M 2010 lsquoThe persistent effects of Mitarsquo Econometrica 78 1863ndash903Descola P 1996 La Selva Culta Simbolismo y Praxis en la Ecologiacutea de los Achuar Quito

Abya YalaDeustua J 1995 lsquo ldquoiexclCampesino el patroacuten no comeraacute maacutes de tu pobrezardquo Economiacutea

mercado y campesinos en los Andes el caso de la mineriacutea peruana en el siglo XIXrsquoDocumento de Trabajo 70 Serie Historia 13 Lima Instituto de Estudios Peruanos

Di John J 2010 lsquoThe political economy of taxation and state resilience in Zambia since1990rsquo Available at httpwwwlseacukinternationalDevelopmentresearchcrisisStatesdownloadwpwpSeries2WP842pdf accessed 25 March 2017

Di John J and J Putzel 2009 lsquoPolitical settlementsrsquo Issues paper June Governanceand Social Development Resource Centre Birmingham Available at httpcoreacukdownloadfiles119103642pdf accessed 20 February 2018

Dickens T 2010 lsquoLegalising ldquogalamseyrdquo in Ghanarsquo Feature Article GhanaWeb Availableat httpwwwghanawebcomGhanaHomePageNewsArchiveLegalising-Galamsey-in Ghana-180922 accessed 20 February 2018

Donkor K 1997 Structural Adjustment and Mass Poverty in Ghana London AshgateDore Elizabeth 1986Acumulacioacuten yCrisis en laMineriacutea Peruana 1900ndash1977 Lima UNMSMDumett R E 1998 El Dorado inWest Africa The Gold-Mining Frontier African Labor and

Colonial Capitalism on the Gold Coast 1875ndash1900 Athens OH HeinemannDunkerley J 2007 lsquoEvo Morales the ldquotwo Boliviasrdquo and the third Bolivian revolutionrsquo

Journal of Latin American Studies 39(1) 133ndash66Eifert B A Gelb and N Tallroth 2003 lsquoThe political economy of fiscal policy and

economic management in oil-exporting countriesrsquo In Fiscal Policy Formulation andImplementation in Oil Producing Countries edited by J M Davis R Ossowski andA Fedelino pp 82ndash122 Washington DC IMF

Englund H (ed) 2002 A Democracy of Chameleons Politics and Culture in the NewMalawi Zomba Kachere Books

Espinoza Morales J 2010 Mineriacutea Boliviana Su Realidad La Paz Bolivia PluralEvans P 1995 Embedded Autonomy States and Industrial Transformation Princeton NJ

Princeton University PressEY 2014 Perursquos Mining and Metals Investment Guide 20142015 Lima EYEY 2017 Perursquos Mining and Metals Investment Guide 20172018 Lima EYFaguet J-P 2012 Decentralization and Popular Democracy Governance from below in

Bolivia Ann Arbor MI University of Michigan PressFarthing L and B Kohl 2005 lsquoConflicting agendas The politics of development aid in

drug-producing areasrsquo Development Policy Review 23 183ndash98Farthing L andBKohl 2014Evorsquos Bolivia Continuity andChange Austin TXUniversity

of Texas PressFerguson J 1999 Expectations of Modernity Myths and Meanings of Urban Life on the

Zambian Copperbelt Berkeley CA University of California Press


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Ferguson J 2006 Global Shadows Africa in the Neoliberal Order Durham NC DukeUniversity Press

Finnemore M 1997 lsquoRedefining development at the World Bankrsquo In InternationalDevelopment and the Social Sciences edited by F Cooper and R Packard pp 203ndash27Berkeley CA University of California Press

Fitzgerald E V K 1979 La Economiacutea Poliacutetica del Peruacute 1956ndash1978 Desarrollo Econoacutemico yReestructuracioacuten del Capital Lima Instituto de Estudios Peruanos

Fort Ricardo Mariacutea Isabel Remy and Heacutector Paredes (2015) Es Necesaria una EstrategiaNacional de Desarrollo Rural en el Peruacute Aportes Para el Debate y Propuesta de Implementa-cioacutenLima GRADE

Fox L B Hoffman A Anyimadu and M Keshishian 2011 lsquoGhana democracy andgovernance assessmentrsquo Report submitted to USAIDGhana Final report August

Francescone K 2015 lsquoCooperative miners and the politics of abandonment in BoliviarsquoExtractive Industries and Society 2 746ndash55

Francescone K andVDiacuteaz 2014 lsquoCooperativasmineras bolivianas Entre socios patronesy peonesrsquo CEDIB Available at httpwwwcediborgpetropresscooperativas-mineras-entre-socias-patrones-y-peones-petropress-30-1-13 accessed 29 May 2014

Fraser A 2010 lsquoPrefab Politics Poverty Reduction Strategies and the Limits of Donor-Built Civil Society in Zambia 1999ndash2009rsquo PhD thesis Oxford University

Fraser A and M Larmer (eds) 2011 Zambia Mining and Neoliberalism Boom and Buston the Globalized Copperbelt New York Palgrave Macmillan

Fraser A and J Lungu 2007 For Whom the Windfalls Winners and Losers in thePrivatization of Zambiarsquos Copper Mines Lusaka Minewatch Zambia Available athttpswwwresearchgatenetpublication237428939_FOR_WHOM_THE_WINDFALLS_Winners_losers_in_the_privatisation_of_Zambia27s_copper_mines accessed20 February 2018

Frederiksen T 2017 lsquoCorporate Social Responsibility and Political Settlements in theMining Sector in Ghana Peru and Zambiarsquo ESID Working Paper 74 ManchesterEffective States and Inclusive Development Centre

Fundacioacuten Unir 2014 La Veta del Conflicto Ocho Miradas Sobre Conflictividad Minera enBolivia (2010ndash2014) Santa Cruz Fundacioacuten Unir

Galeano E 1971 The Open Veins of Latin America Five Centuries of the Pillage of aContinent New York Monthly Review Press

Gallagher K 2016 The China Triangle Latin Americarsquos China Boom and the Fate of theWashington Consensus New York Oxford University Press

Gallo C 1991 Taxes and State Power Political Instability in Bolivia 1900ndash1950 Phila-delphia PA Temple University Press

Garciacutea Linera A 2008 lsquoEmpate catastroacutefico y su punto de bifurcacioacutenrsquo Criacutetica yEmancipacioacuten1(1) 23ndash33

Garciacutea Linera A nd lsquoEl nuevo modelo econoacutemico nacional productivorsquo Revista deAnaacutelisis Presidencia del H Congreso Nacional Vicepresidencia del Estado Plurina-cional Antildeo 2 nuacutemero 2 Available at httpswwwvicepresidenciagobboIMGpdfrevista_analisis_2pdf accessed 20 February 2018

Gelb A 1988 Oil Windfalls Blessing or Curse New York Oxford University Press


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Ghana Chamber of Mines 2016 The Ghana Chamber of Mines Factoid 2015 AccraGhana Chamber of Mines

Ghana Chamber of Mines and ICMM 2015 Mining in Ghana ndash What Future Can WeExpect Accra Ghana Chamber of Mines

Ghana News Agency 2015 lsquoCurrent mining royalties not enough ndash Chamber ofMinesrsquo 21 September Available at httpswwwghanabusinessnewscom20150921currentmining-royalties-not-enough-chamber-of-mines accessed 11 May 2017

Ghana Statistical Service 2007 Pattern and Trends of Poverty in Ghana 1991ndash2006 AccraGhana Statistical Service

Ghana Statistical Service 2014 Poverty Profile in Ghana 2005ndash2013 Accra GhanaStatistical Service

GhanaianChronicle 2014 24 January 2014 lsquoPresidency succumbs tomining blackmailrsquoAvailable at httpwwwmodernghanacomnews5178451presidency-succumbs-to-mining-blackmailhtml accessed 20 February 2018

Ghezzi P 2015 October 29 lsquoLa falsa dicotomiacutearsquo Lima El Comercio Available athttpelcomerciopeopinioncolaboradoresfalsa-dicotomia-piero-ghezzi-solis-noticia-1851717 accessed 20 February 2018

Ghezzi P and J Gallardo 2013 Que se puede hacer con el Peruacute Ideas para sostener elcrecimiento en el largo plazo Lima Fondo Editorial de la Universidad del Paciacutefico

Gilberthorpe E and G Hilson (eds) 2014 Natural Resource Extraction and IndigenousLivelihoods London Routledge

Glave M and J Kuramoto 2007 La Mineriacutea Peruana Lo que Sabemos y lo que Auacuten nosFalta por Saber Lima GRADE

Global Witness 2017 Defenders of the Earth Global Killings of Land and EnvironmentalDefenders in 2016 London Global Witness

Golooba-Mutebi F 2013 lsquoPolitics political settlements and social change in postcolo-nial Rwandarsquo ESIDWorking Paper No 24 Manchester Effective States and InclusiveDevelopment Research Centre The University of Manchester

Gonzales de Olarte E and L Samameacute 1991 El Peacutendulo Peruano Poliacuteticas EconoacutemicasGobernabilidad y Subdesarrollo 1963ndash1990 Lima Instituto de Estudios Peruanos

Gotkowitz L 2008 A Revolution for Our Rights Indigenous Struggles for Land and Justice inBolivia 1880ndash1952 Durham NC Duke University Press

Gould J 2010 Left Behind Rural Zambia in the Third Republic Lusaka The LembaniTrust

Government of Ghana 2010 The Savannah Accelerated Development Authority (SADA)Synopsis of Development Strategy (2010ndash2030) Accra Policy Unit Office of the Vice-President

Government of Ghana 2012 Ghana National Social Protection Strategy Accra Ministryof Gender Children and Social Protection

Government of Ghana 2014 Ghana Shared Growth and Development Agenda (GSGDA) IIAccra National Development Planning Commission


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Granados O 2015 lsquoBankers entrepreneurs and Bolivian tin in international economy1900ndash1932rsquo In Tin and Global Capitalism A History of the Devilrsquos Metal edited byM Ingusltad A Perchard and E Storli pp 46ndash73 New York Routledge

Guasti L 1985 lsquoEl Gobierno Militar Peruano y las corporaciones internacionalesrsquo In ElGobiernoMilitar UnaExperiencia Peruana1968ndash1980 Lima InstitutodeEstudios Peruanos

Gudynas E 2012 lsquoEstado compensador y nuevos extractivismos Las ambivalencias delprogresismo sudamericanorsquo Nueva Sociedad 237 128ndash46

Gudynas E 2014 Derechos de la Naturaleza Etica Bioceacutentrica y Poliacuteticas AmbientalesLa Paz (Bolivia) Plural

Gustafsson M-T 2017 lsquoThe struggles surrounding ecological and economic zoning inPerursquo Third World Quarterly 38(5) 1146ndash63

Gyimah-Boadi E and H K Prempeh 2012 lsquoOil politics and Ghanarsquos democracyrsquoJournal of Democracy 23(3) 94ndash107

Haas P 1992 Epistemic Communities and International Policy Coordination CambridgeMA MIT Press

Hall P 2010 lsquoHistorical institutionalism in rationalist and sociological perspectiversquo InExplaining Institutional Change Ambiguity Agency and Power edited by J Mahoneyand K Thelen pp 204ndash24 Cambridge Cambridge University Press

Hern E and J Achberger 2014 lsquoImagining development confronting reality Domes-tic and international constraints on Zambiarsquos First and Second National Develop-ment Plansrsquo SAIPAR Working Paper

Hickey S 2013 lsquoThinking about the politics of inclusive development Towards arelational approachrsquo ESID Working Paper No 1 Manchester Effective States andInclusive Development Research Centre University of Manchester

Hickey S and A Izama 2017 lsquoThe politics of governing oil in Uganda Going againstthe grainrsquo African Affairs 116(463) 163ndash85

Hickey S and K Sen 2016 lsquoESID overview paper for Bellagiorsquo Unpublished paperprepared for the Effective States and Inclusive Development (ESID) Research CentreManchester ESID University of Manchester

Hickey S K Sen and B Bukenya 2015a lsquoIntroduction The politics of inclusivedevelopmentrsquo In The Politics of Inclusive Development Interrogating the Evidence editedby S Hickey K Sen and B Bukenya pp 1ndash39 Oxford Oxford University Press

Hickey S A-G Abdulai A Izama and G Mohan 2015b lsquoThe politics of governing oileffectively A comparative study of two new oil-rich states in Africarsquo ESID WorkingPaper No 54 Manchester Effective States and Inclusive Development ResearchCentre University of Manchester

Hilson G 2002 lsquoHarvesting mineral riches 1000 years of gold mining in GhanarsquoResources Policy 28(1) 13ndash26

Hilson G 2009 lsquoSmall-Scale mining poverty and economic development in Sub-Saharan Africa An overviewrsquo Resources Policy 34 (1ndash2) 1ndash5

Hilson G and C Garforth 2013 lsquo ldquoEveryone now is concentrating on the miningrdquoDrivers and implications of rural economic transition in the Eastern Region ofGhanarsquo Journal of Development Studies 49(3) 348ndash64


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Hilson G A Hilson and E Adu-Darko 2014 lsquoChinese participation in Ghanarsquosinformal gold mining economy Drivers implications and clarificationsrsquo Journal ofRural Studies 34 292ndash303

Hilson G and C Potter 2003 lsquoWhy is illegal gold mining activity so ubiquitous inrural Ghanarsquo African Development Review 15(2) 237ndash70

Hindery D 2013a From Enron to Evo Pipeline Politics Global Environmentalism andIndigenous Rights in Bolivia Tucson AZ University of Arizona Press

Hindery D 2013b lsquoSynergistic impacts of gas and mining development in BoliviarsquosChiquitaniacutea The significance of analytical scalersquo In Subterranean Struggles NewDynamics of Mining Oil and Gas in Latin America edited by A Bebbington andJ Bury pp 197ndash222 Austin TX University of Texas Press

Holloway J 2010 Crack Capitalism London Pluto PressHumphreys M J Sachs and J Stiglitz (eds) 2007 Escaping the Resource Curse New

York Initiative for Policy Dialogue Columbia University PressHumphreys Bebbington D 2010 lsquoThe Political Ecology of Natural Gas Extraction in

Southern Boliviarsquo PhD thesis University of ManchesterHumphreys Bebbington D and A Bebbington 2010 lsquoExtraction territory and

inequalities Gas in the Bolivian Chacorsquo Canadian Journal of Development Studies30(1ndash2) 259ndash80

Humphreys Bebbington D and A Bebbington 2012 lsquoPost-what Extractive industriesnarratives of development and socio-environmental disputes across the (ostensiblychanging) Andean regionrsquo In New Political Spaces in Latin American Natural ResourceGovernance edited by H Haarstad pp 17ndash37 Oxford Palgrave Macmillan

Hunt S 2011 La Formacioacuten de la Economiacutea Peruana Distribucioacuten y Crecimiento en laHistoria Econoacutemica del Peruacute y Ameacuterica Latina Lima BCRP IEP PUCP

Hutchful E 2002 Ghanarsquos Adjustment Experience The Paradox of Reform Geneva andOxford UNRISD and James Currey

Hylton F and S Thomson 2005 lsquoThe chequered rainbowrsquo New Left Review 35 40ndash64ICMM (International Council onMining andMetals) 2007Ghana Country Case Study ndash

The Challenge of Mineral Wealth Using Resource Endowments to Foster SustainableDevelopmentrsquo London ICMM

ICMM (International Council on Mining and Metals) 2014 Press information sheet 1lsquoICMM assesses miningrsquos contribution to Zambiarsquos national and local economyrsquoAvailable at httpwwweisourcebookorgcmsApril202014Zambia20macroeconomic20contributions20of20miningpdf accessed 23 March 2017

ILO (International Labor Organization) 2017 Labor Overview Latin America and theCaribbean 18 December 2017 Available at httpwwwiloorgwcmsp5groupspublicmdashamericasmdashro-limamdashsro-port_of_spaindocumentspublicationwcms_614132pdf accessed 20 February 2018

Inchauste G J Azevedo S Olivieri J Saavedra and H Winkler 2012 When JobEarnings Are Behind Poverty Reduction Economic Premise 97 Washington DCWorld Bank

INEI (Instituto Nacional de Estadiacutestica e Informaacutetica) 2007 XI Censo Nacional dePoblacioacuten y VI de Vivienda Sistema de Consulta de Datos Lima INEI Available athttpcensosineigobpeCensos2007redatam accessed 20 February 2018


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INEI (Instituto Nacional de Estadiacutestica e Informaacutetica) 2016 Produccioacuten y Empleo Infor-mal en el Peruacute Cuenta Sateacutelite de la Economiacutea Informal 2007ndash2012 Lima INEI

INGEMMET 2017 lsquoEstadiacutesticas de Gestioacuten Mensual y Anual Totalidad de DerechosMineros Vigentes a Nivel Nacionalrsquo Available at httpecatastroingemmetgobpe83PresentacionDatosReporteDMTodosaspx accessed 20 February 2018

IPE (Instituto Peruano de Economiacutea) 2013 Efecto de la Mineriacutea Sobre el Empleo elProducto y la Recaudacioacuten en el Peruacute Lima SNMPE

Jones NW Ahadzie and D Doh 2009 Social Protection and Children Opportunities andChallenges in Ghana Accra UNICEF

Jordan R 2012 lsquoAnaacutelisis y visiones del cooperativismomineroboliviano unpoder politicoy social intocablersquo La Razon 2 July Available at httpwwwplataformaenergeticaorgcontent29693 accessed 7 July 2012

Joy Online 2015 August 10 lsquo40-year devrsquot plan will be legally binding but flexible ndash

Kwesi Botchweyrsquo Available at httpwwwmyjoyonlinecomnews2015August-10th40-year-devt-plan-will-be-legally-binding-but-flexible-kwesi-botchweyphpaccessed 25 May 2017

Joy Online 2017 March 22 lsquoWorldWater Day Ghana risks importing water ndash expertsrsquoAvailable at httpwwwmyjoyonlinecomnews2017March-22ndworld-water-day-ghana-risks-importing-water-expertsphp accessed 25 May 2017

Kapstein E B and R Kim 2011 The Socio-Economic Impact of Newmont Ghana GoldLimited Haarlem Stratcomm Africa

Karl T 1986 lsquoPetroleum and political pacts The transition to democracy in Vene-zuelarsquo In Transitions from Authoritarian Rule edited by Guillermo OrsquoDonnell PhilippeC Schmitter and Laurence Whitehead pp 196ndash219 Baltimore MD Johns HopkinsPress

Karl T 1987 lsquoPetroleum and political pacts the transition to democracy in VenezuelarsquoLatin American Research Review 22(1) 63ndash94

Karl T 1997 The Paradox of Plenty Oil Booms and Petro States Oakland CA Universityof California University Press

Karl T 2007 lsquoEnsuring fairness The case for a transparent fiscal contractrsquo In Escapingthe Resource Curse edited by M Humphreys J Sachs and J Stiglitz pp 256ndash85New York Columbia University Press

Kaup B 2013Market Justice Political Economic Struggle in Bolivia New York CambridgeUniversity Press

Kemp D 2014 Review of lsquoSubterranean struggles New dynamics ofmining oil and gasin Latin America by Anthony Bebbington and Jeffrey Buryrsquo Journal of DevelopmentStudies 50(5) 770ndash1

Khan M 2010 lsquoPolitical settlements and the governance of growth-enhancing insti-tutionsrsquo Mimeo London School of Oriental and African Studies University ofLondon

Kirsch S 2012 lsquoAfterword Extractive conflicts comparedrsquo In Social Conflict EconomicDevelopment and Extractive Industries Evidence from South America edited byA Bebbington pp 201ndash13 London Routledge

Kirsch S 2014Mining Capitalism The Relationship between Corporations and their CriticsBerkeley CA University of California Press


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Klareacuten P 2004 Nacioacuten y Sociedad en la Historia del Peruacute Lima Instituto de EstudiosPeruanos

Klein H 2011 A Concise History of Bolivia Cambridge Cambridge University PressKlein H and J Peres Cajiacuteas 2014 lsquoBolivian oil and natural gas under state and private

control 1910ndash2010rsquo Bolivian Studies Journal 20 141ndash64Kohl B 2002 rsquoStabilising neoliberalism in Bolivia Popular participation and privat-

izationrsquo Political Geography 21(4) 449ndash72Kruijt M and D Vellinga 1983 Estado Clase Obrera y Empresa Transnacional El Caso de

la Mineria Peruana 1900ndash1980 Meacutexico Siglo XXI EditoresKuma J S and J A Yendaw 2010 lsquoThe need to regularise activities of illegal small-scale

mining in Ghana A focus on the TarkwandashDunkwa Highwayrsquo International Journal ofGeosciences 1(3) 113ndash20

Ladouceur P A 1979 Chiefs and Politicians The Politics of Regionalism in NorthernGhana London and New York Longman Group

Lanegra I 2015 March 22 lsquoEl largo nacimiento de Senacersquo OjoPuacuteblico OpinionAvailable at httpojo-publicocom41el-largo-nacimiento-del-senace accessed20 February 2018

Larmer M 2006 lsquo ldquoThe hour has come at the pitrdquo The Mineworkersrsquo Union of Zambiaand theMovement for Multiparty Democracy 1982ndash1991rsquo Journal of Southern AfricanStudies (32)2 293ndash312

Larmer M (ed) 2010 The Musakanya Papers The Autobiographical Writings of ValentineMusakanya Lusaka Lembani Trust

Larmer M 2011 lsquoHistorical perspectives on Zambiarsquos mining booms and bustsrsquo InZambia Mining and Neoliberalism Boom and Bust on the Globalized Copperbelt editedby A Fraser and M Larmer pp 31ndash58 New York Palgrave Macmillan

Larmer M and Macola G 2007 lsquoThe origins context and political significance ofthe Mushala Rebellion against the Zambian one-party statersquo International Journal ofAfrican Historical Studies 40(3) 471ndash96

Laws E 2012 lsquoPolitical Settlements Elite Pacts and Governments of National UnityA Conceptual Studyrsquo Background Paper 10 Birmingham Developmental LeadershipProgram

Le Billon P 2005 Fuelling War Natural Resources and Armed Conflicts New YorkRoutledge

Lee C K 2014 lsquoChina on the Copperbeltrsquo New Left Review (89) (SepOct) 29ndash66Lee C K 2017 The Specter of Global China Politics Labor and Foreign Investment in Africa

Chicago IL University of Chicago PressLeith D 2003 The Politics of Power Freeport in Suhartorsquos Indonesia Honolulu University

of Hawairsquoi PressLevitsky S and L A Way 2010 Competitive Authoritarianism Hybrid Regimes after the

Cold War Cambridge Cambridge University PressLevy B 2014 Working with the Grain Integrating Governance and Growth in Development

Strategies Oxford Oxford University PressLevy B and T Kelsall T 2016 lsquoWorking contextually What works in different types of

political settlementrsquo Unpublished paper prepared for ESID Manchester EffectiveStates and Inclusive Development Research Centre University of Manchester


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Levy B and M Walton 2013 lsquoInstitutions incentives and service provision Bringingpolitics back inrsquo ESID Working Paper No 18 Manchester Effective States andInclusive Development Research Centre University of Manchester

Li F 2015 Unearthing Conflict Corporate Mining Activism and Expertise in Peru DurhamNC Duke University Press

Lindemann S 2011 lsquoInclusive elite bargains and the dilemma of unproductive peaceA Zambian case studyrsquo Third World Quarterly 32(10) 1843ndash69

Loayza N 2007 lsquoThe causes and consequences of informality in Perursquo Working Paperseries DT Nordm 2007-018 Washington DC World Bank

McClintock C and A Lowenthal 1983 The Peruvian Experiment Reconsidered Prince-ton NJ Princeton University Press

McKinsey amp Company 2013 An assessment of the competitiveness and health ofPerursquos mining industry Available at httpwwwmckinseycommediamckinseydotcomclient_serviceMetals20and20MiningPDFsCompetitiveness20and20health20of20the20Peruvian20Mining20Sector-vfashx accessed 20February 2018

Macola G 2006 lsquo ldquoIt means as if we are excluded from the good freedomrdquo Thwartedexpectations of independence in the Luapula Province of Zambia 1964ndash6rsquo TheJournal of African History 47(1) 43ndash56

Macola G 2008 lsquoHarry Mwaanga Nkumbula UNIP and the roots of authoritarianismin nationalist Zambiarsquo In One Zambia Many Histories Towards a History of Post-colonial Zambia edited by J B Gewald M Hinfelaar and G Macola pp 17ndash44Leiden Brill

Macola G 2010 Liberal Nationalism in Central Africa A Biography of Harry MwaangaNkumbula New York Palgrave Macmillan

Maconachie R R Srinivasan and N Menzies 2015 Responding To The Challenge OfFragility And Security In West Africa Natural Resources Extractive Industry InvestmentAnd Social Conflict Washington DC World Bank

Mahoney J and K Thelen (eds) 2010 Explaining Institutional Change AmbiguityAgency and Power Cambridge Cambridge University Press

Mann M 2007 (1986) lsquoEl poder autoacutenomo del Estado sus oriacutegenes mecanismos yresultadosrsquo Revista Acadeacutemica de Relaciones Internacionales 5 (November 2007) Avail-able at httpwwwrelacionesinternacionalesinfoojsarticleview49html accessed20 February 2018

Manrique N 2009 Usted fue Aprista Bases para una historia criacutetica del APRA LimaCLACSO Pontificia Universidad Catoacutelica del Peruacute

Maplecroft 2013 Maplecroft Risk Index Bolivia 2013 Available at httpmaplecroftcomaboutnewspra_2013html accessed 13 August 2013

Maxwell S and D Stone (eds) 2004 Global Knowledge Networks and InternationalDevelopment Bridge across Boundaries London Routledge

Mbeki Panel 2015 lsquoIllicit Financial Flow Report of the High Level Panel on IllicitFinancial Flows from Africarsquo Commissioned by the AUECA Conference of Ministersof Finance Planning and Economic Development

Medina G 2014 Formalizacioacuten de la Mineriacutea en Pequentildea Escala iquestpor queacute Y coacutemoLima Better Gold Initiative


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MEF (Ministry of Economy and Finance) 2016b lsquoEstadiacutesticas Poliacutetica Econoacutemica ySocialrsquo Available at httpswwwmefgobpeessistema-nacional-de-contabilidad-sp-9060politica-economica-y-social accessed 20 February 2018

Mesa J T Gisbert and C D Mesa 1998 Historia de Bolivia La Paz Bolivia EditorialGisbert

Migdal J S 1988 Strong Societies and Weak States StatendashSociety Relations and StateCapabilities in the Third World Princeton NJ Princeton University Press

Miller R 2011 Empresas Britaacutenicas Economiacutea y Poliacutetica en el Peruacute 1850ndash1934 LimaBCRP IEP

MINEM (Ministry of Energy and Mines) 2011 lsquoPrograma Minero de Solidaridad con elPueblo Informe Nordm 040rsquo Lima MINEM

MINEM (Ministry of Energy and Mines) 2016 Anuario Minero 2015 Available athttpwwwminemgobpe_publicacionphpidSector=1ampidPublicacion=524 accessed20 February 2018

Minerals and Mining Act 2006 Act 703 Parliament of the Republic of GhanaMinistry of Culture 2017 lsquoProcesos de Consulta Previarsquo Available at httpcon

sultapreviaculturagobpeproceso accessed 11 January 2018Ministry of Environment (2015) lsquoZonas conMineriacutea Ilegal e Informalrsquo Source Ministry of

Environment National Institute of Statistics and Informatics Centros Poblados (IGN)Available at httpgeoservidorminamgobpemonitoreo-y-evaluacioncambios-por-mineria-ilegal-e-informal accessed 20 February 2018

Ministry of Lands and Natural Resources 2011 lsquoLand Administration Project PhaseTwo Project implementation manualrsquo Accra

Ministry of Lands and Natural Resources 2013 lsquoStatement by the Hon Minister ofLands and Natural Resources Relating to Govrsquots Position on Small Scale Mining(SSM)rsquo Accra

Mitchell T 2012 Carbon Democracy Political Power in the Age of Oil New York VersoMkandawire T 2006 lsquoDisempowering new democracies and the persistence of

povertyrsquo UNSRID Democracy Governance and Human Rights Programme PaperNo 21 January Available at httpwwwunrisdorgunrisdwebsitedocumentnsf(httpPublications)66023422031C9D6710C125717800248890OpenDocumentaccessed 25 March 2017

MOFEP 2017 lsquoBudget StatementsrsquoMinistry of Finance Available at httpwwwmofepgovghq=budget-statements accessed 20 February 2018

Mohan G and K P Asante 2015 lsquoTransnational capital and the political settlement ofGhanarsquos oil economyrsquo ESID Working Paper No 49 Manchester Effective States andInclusive Development Research Centre University of Manchester

Mohan G M Power and M Tan-Mullins 2012 Chinarsquos Resource Diplomacy in AfricaPowering Development London Palgrave Macmillan

Mohan G K P Asante and A-G Abdulai 2017 lsquoParty politics and the politicaleconomy of Ghanarsquos oilrsquo New Political Economy Available at wwwtandfonlinecomdoifull1010801356346720171349087 accessed 20 February 2018

Molina F 2008 lsquoBolivia La geografiacutea de un conflictorsquo Nueva Sociedad 218 4ndash13


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Molina F 2011 El Pensamiento Boliviano Sobre los Recursos Nacionales 2nd Edn La PazFundacioacuten Vicente Pazos Kanki

Morales J A 1992 lsquoBoliviarsquos tin and natural gas crises of 1985ndash1989rsquo Instituto deInvestigaciones Socio-Economicas Working Paper No 0492 La Paz UniversidadCatolica Boliviana

Moroacuten E A and C Sanborn 2007 Los Desafiacuteos del Policymaking en Peruacute ActoresInstituciones y Reglas de Juego Lima CIUP Documento de Trabajo 77

Mosquera Ceacutesar (2006) lsquoEl desafiacuteo de la formalizaciacuteon de la mineriacutea artesanal y depequentildea escalarsquo Available at httpsidl-bnc-idrcdspacedirectorgbitstreamhandle1062526183123847pdfsequence=1 accessed 20 February 2018

Munck G L and R Snyder 2007 Passion Craft and Method in Comparative PoliticsBaltimore MD The Johns Hopkins University Press

Muntildeoz I and M Vega 2000 lsquoEl fomento de la inversioacuten privadarsquo In La ReformaIncompleta edited by Roberto Abusada Fritz Du Bois Eduardo Moroacuten and JoseacuteValderrama pp 13ndash62 Lima Instituto Peruanode EconomiacuteaUniversidaddel Paciacutefico

Muntildeoz Chirinos P 2010 lsquoConsistencia poliacutetica regional o fraacutegiles alianzas electoralesEl escenario electoral cuzquentildeo actualrsquo Revista Argumentos 4(3)

Nash J C 1993 We Eat the Mines and the Mines Eat Us Dependency and Exploitation inBolivian Tin Mines New York Columbia University Press

NCOM (National Coalition on Mining) 2011 lsquoStatement by National Coalitionon Mining on 2012 Budget Proceed with further reforms in the mining sectorrsquo21 November Accra

NDC (National Democratic Congress) 2004 lsquoNational Democratic Congress Manifesto2004 A better Ghanarsquo Accra

NDC (National Democratic Congress) 2008 lsquoManifesto for a Better Ghana 2008rsquo AccraNDC (National Democratic Congress) 2012 lsquo2012 Manifesto Advancing the BetterGhana Agendarsquo Accra

NDPC 2017 lsquoBudgets (National)rsquoNational Development Planning Commission Availableat httpwwwndpcgovghdownloads8 accessed 20 February 2018

Negi R 2011 lsquoThe micropolitics of mining and development in Zambia Insights fromthe Northwestern Provincersquo African Studies Quarterly 12(2) 27ndash44

Negi R 2014 lsquo ldquoSolwezi Mabangardquo Ambivalent developments on Zambiarsquos new min-ing frontierrsquo Journal of Southern African Studies 40(5) 999ndash1013

North D C J J Wallis S B Webb and B R Weingast 2007 lsquoLimited access ordersin the developing world A new approach to the problems of developmentrsquo PolicyResearch Working Paper 4359 Washington DC World Bank

North D C J J Wallis and B R Weingast 2009 Violence and Social OrdersA Conceptual Framework for Interpreting Recorded Human History Cambridge and NewYork Cambridge University Press

NPP (New Patriotic Party) 2008 lsquoNew Patriotic Party manifesto 2008rsquo AccraNPP (New Patriotic Party) 2012 lsquoTransforming lives transforming Ghana Building afree fair and prosperous societyrsquo Manifesto for election 2012 Accra

NRGI (National Resource Governance Institute) 2017 lsquo2017 Resource GovernanceIndexrsquo Available at httpsresourcegovernanceorganalysis-toolspublications2017-resource-governance-index accessed 20 February 2018


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Nyame F K and J Blocher 2010 lsquoInfluence of land tenure practices on artisanalmining activity in Ghanarsquo Resources Policy 35(1) 47ndash53

OrsquoDonnell G 1973 Modernization and Bureaucratic-Authoritarianism Studies in SouthAmerican Politics Berkeley CA Institute of International Studies University ofCalifornia

OrsquoDonnell G 1988 Bureaucratic Authoritarianism Argentina (1966ndash73) in ComparativePerspective Berkeley CA University of California Press

Oduro F M Awal and M A Ashon 2014 lsquoA dynamic mapping of the politicalsettlement in Ghanarsquo ESID Working Paper No 28 Manchester Effective States andInclusive Development Research Centre University of Manchester

Oelbaum J 2007 lsquoLiberalisation or liberation Economic reform spatial poverty andthe irony of conflict in Ghanarsquos Northern Regionrsquo A paper prepared for the inter-national workshop lsquoUnderstanding and addressing spatial poverty traps An inter-national workshoprsquo 29 March Stellenbosch South Africa Chronic Poverty ResearchCentre and the Overseas Development Institute

Ofosu-Mensah E A 2016 lsquoMining in colonial Ghana Extractive capitalism and itssocial benefits in Akyem Abuakwa under Nana Ofori Atta Irsquo Africa Today 63(1)23ndash55

Omosini O 1972 lsquoThe Gold Coast land question 1894ndash1900 Some issues raised onWest Africarsquos economic developmentrsquo International Journal of African Historical Studies5(3) 453ndash69

ONAMIAP 2014 lsquoLideresas indiacutegenas de ONAMIAP se pronuncian sobre la cuotaindiacutegenarsquo Lima Peru Available at httpwwwonamiaporg201405lideresas-indigenas-de-onamiap-sehtml accessed 20 February 2018

Oporto H 2012 Los Dilemas de la Mineriacutea La Paz Fundacioacuten Vicente Pazos KankiOrihuela J C 2013 lsquoInstituciones y cambio institucional Repensando la maldicioacuten de

los recursos desde los nuevos institucionalismos y la experiencia peruanarsquo RevistaPolitai 6 47ndash62

Orihuela J C and R Thorp 2012 lsquoPolitical economy of extractive industries in BoliviaEcuador and Perursquo In Social Conflict Economic Development and the Extractive IndustryEvidence from South America edited by A Bebbington pp 27ndash45 London Routledge

Orrego J L 2012 lsquoBreve historia de la banca en Limahasta 1950rsquo Lima Blog de Juan LuisOrrego Penagos Historia del Peruacute Ameacuterica y el Mundo Siglos XIX y XX Available athttpblogpucpedupeblogjuanluisorrego20120101breve-historia-de-la-banca-en-lima-hasta-1950 accessed 20 February 2018

Osei-Hwedie B 2003 lsquoDevelopment policy and economic change in ZambiaA reassessmentrsquo DPMN Bulletin X(2) April

Ospina A A J Bebbington P Hollenstein I Nussbaum and E Ramiacuterez 2015 lsquoExtra-territorial investments environmental crisis and collective action in Latin AmericarsquoWorld Development 73 32ndash43

Oxfam America 2014 lsquoGeographies of conflict Mapping overlaps between extractiveindustries and agricultural land uses in Ghana and Perursquo Washington OxfamAmerica

Pachas V 2012 El Suentildeo del Corredor Minero Coacutemo Aprender a Vivir Contigo y Sin ti LimaCBC GOMIAN


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Paacutegina Siete 2013 lsquoInvestigacioacuten indaga sobre los preacutestamos de Patintildeo al EstadorsquoPaacutegina Siete 16 (October) Available at httpwwwpaginasietebocultura20131016investigacion-indaga-sobre-prestamos-patino-estado-3308html accessed 16October 2013

Paacutegina Siete 2016 lsquoCampamento petrolero de Lliquimuni en retira pozo de hidrocar-buros dio negativorsquo 21 March Available at httpwwwpaginasieteboeconomia2016321campamento-petrolero-lliquimuni-retirada-pozo-hidrocarburos-negativo-90558html accessed 30 March 2016

Panfichi A 2011 lsquoContentious representation and its impact in contemporary PerursquoIn Fractured Politics Peruvian Democracy Past and Present edited by J Crabtree LondonInstitute for the Study of the Americas University of London

Paredes M 2013 Shaping State Capacity A Comparative Historical Analysis of MiningDependence in the Andes 1840ndash1920 Unpublished PhD thesis Oxford UK Universityof Oxford

Paredes M J C Orihuela and C Huaroto 2013 Escapando de la maldicioacuten de losrecursos local conflictos socioambientales y salidas institucionales Lima CIES PUCP

Parks T and W Cole 2010 lsquoPolitical settlements Implications for international devel-opment policy and practicersquo The Asia Foundation Occasional Paper No 2 July 2010

Parodi C 2002 Peruacute 1960ndash2000 Poliacutetica Econoacutemica y Entornos Cambiantes LimaUniversidad del Paciacutefico

Pascoacute-Font A 2000 The Social Impact of Privatization and Regulation of Utilities in UrbanPeru Helsinki World Bank

Pasco Font A and Maximo Torero 2001 lsquoEl impacto social de la privatizacioacuten y laregulacioacuten de los servicios puacuteblicos en el Peruacutersquo LimaGrade (Documento de Trabajo 35)Available at httpageconsearchumnedubitstream377582ddt35pdf accessed 20February 2018

Peet R and E Hartwick 2015 Theories of Development Contentions Arguments Alterna-tives New York Guilford Press

Peet R and M Watts (eds) 1996 Liberation Ecologies Environment Development SocialMovements London Routledge

Peres Cajiacuteas J 2011 lsquoRepensando el desarrollo desde la historia econoacutemica creci-miento y lucha de deacutebilesrsquo In Desarrollo en Cuestioacuten reflexiones desde Ameacuterica Latinaedited by F Wanderley pp 99ndash131 La Paz CIDES-UMSA and Plural

Peres Cajiacuteas J 2014 lsquoBolivian public finances 1882ndash2010 The challenge to makesocial spending sustainablersquo Journal of Iberian and Latin American Economic History32(1) 77ndash117

Perla C 2012 lsquoExtracting from the Extractors The Politics of Private Welfare inthe Peruvian Mining Industryrsquo Unpublished PhD thesis Providence RI BrownUniversity

Perreault T 2006 lsquoFrom the Guerra del Agua to the Guerra del Gas Resource govern-ance neoliberalism and popular protest in Boliviarsquo Antipode 38(1) 150ndash72

Perreault T 2013 lsquoNature and nation Hydrocarbons governance and the territoriallogics of resource nationalism in Boliviarsquo In Subterranean Struggles New Geographies ofExtractive Industries in Latin America edited by A Bebbington and J Bury pp 67ndash90Austin TX University of Texas Press


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Pesa I 2014 lsquoMoving along the Roadside A Social History of Mwinilunga District1870sndash1970srsquo PhD thesis University of Leiden

Phillips J E Hailwood and A Brooks 2016 lsquoSovereignty the ldquoresource curserdquo and thelimits of good governance A political economy of oil in Ghanarsquo Review of AfricanPolitical Economy 43(47) 26ndash42

Phimister I 2011 lsquoProletarians in paradise The historiography and historical sociologyof white miners on the Copperbeltrsquo In Living the End of Empire Politics and Societyin Late Colonial Zambia edited by J B Gewald M Hinfelaar and G Macolapp 141ndash60 Leiden Brill

Plange Nii-K 1979 lsquoUnderdevelopment in Northern Ghana Natural causes or colonialcapitalismrsquo Review of African Political Economy 6(15ndash16) 4ndash14

Ponce A and C McClintock 2014 lsquoThe explosive combination of inefficient localbureaucracies and mining production Evidence from localized societal protests inPerursquo Latin American Politics and Society 56(3) 118ndash40

Portocarrero M Gonzalo 1983 lsquoIdeologiacuteas funciones del estado y poliacuteticas econoacutem-icas Peruacute 1900ndash1980rsquo Debates en Sociologiacutea 9 7ndash30 Lima Pontificia UniversidadCatoacutelica del Peruacute

Portocarrero S Felipe 2013 Grandes Fortunas en el Peruacute 1916ndash1960 Lima FondoEditorial de la Universidad del Paciacutefico

Portocarrero S Felipe Cynthia Sanborn and Luis Antonio Camacho (2007)MoviendoMontantildeas Empresas Comunidades y ONG en las Industrias Extractivas Lima FondoEditorial de la Universidad del Paciacutefico

Poteete A 2009 lsquoIs development path dependent or political A reinterpretation ofmineral-dependent development in Botswanarsquo Journal of Development Studies 45(4)544ndash71

Poveda R 2007 lsquoMineriacutearsquo In Peruacute La Oportunidad de un Paiacutes en Diferente ProacutesperoEquitativo y Gobernable edited by Marcelo Giugale Vicente Fretes-Cibilis and JohnNewman chap 20 pp 445ndash66 Lima World Bank

Poveda P 2012 Diagnoacutestico del Sector Minero La Paz Fundacioacuten JublileoPRODUCE (Ministerio de la Produccioacuten) 2014 lsquoPlan nacional de diversificacioacuten

productivarsquo Available at httpsiniaminamgobpedocumentosplan-nacional-diversificacion-productiva accessed 20 February 2018

Pulgar-Vidal M 2008 lsquoMinisterio del ambiente un largo proceso de construccioacuten de lainstitucionalidad ambiental en el Peruacutersquo THEMIS 56

Quandzie E 2011 17 November lsquoGhana bows to IMF by hiking mining taxes to 35from 25rsquo Ghana Business News Available at httpswwwghanabusinessnewscom20111117ghana-bows-to-imf-by-hiking-mining-taxes-to-35-from-25 accessed 25May 2017

Quarshie A N K 2015 lsquoMining and Development in Ghana A Case Study of theMineral Development Fund in the Obuasi Municipal Assemblyrsquo Unpublished MAdissertion University of Ghana

Rajan S C 2011 lsquoPoor little rich countries Another look at the ldquoresource curserdquo rsquoEnvironmental Politics 20(5) 617ndash32

Rakner L 2003 Political and Economic Liberalisation in Zambia 1991ndash2001 UppsalaNordic Africa Institute


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Remy M I 2005 Los Muacuteltiples Campos de la Participacioacuten Ciudadana en el PeruacuteUn Reconocimiento del Terreno y Algunas Reflexiones Lima Instituto de EstudiosPeruanos

Republic of Ghana 1992 Constitution of the Republic of Ghana 1992 Tema GhanaPublishing Corporation

Republic of Ghana 2009 lsquoBudget statement and economic policy of the Governmentof Ghana for the 2010 financial yearrsquos budget speechrsquo Presented to parliament18 November 2009 financial year budget speech


Republic of Ghana 2013 lsquoPerformance audit report of the Auditor General Utilisationof Mining Development Fund by metropolitan municipal and district assembliesrsquoAccra

Republic of Ghana 2014 lsquoMinerals and mining policy of Ghana Ensuring miningcontributes to sustainable developmentrsquo Accra Ministry of Lands and NaturalResources

Roberts A 2011 lsquoNorthern-Rhodesia The post-war background 1945ndash1953rsquo In Livingthe End of Empire Politics and Society in late Colonial Zambia edited by J B GewaldM Hinfelaar and G Macola pp 18ndash28 Leiden Brill

Robertson G A 1819 Notes on Africa LondonRobinson J R Torvik and T Verdier 2006 lsquoPolitical foundations of the resourcecursersquo Journal of Development Economics 79 447ndash68

Roca J L 2008 lsquoRegionalism revisitedrsquo In Unresolved Tensions Bolivia Past and Presentedited by J Crabtree and L Whitehead pp 65ndash82 Pittsburgh PA University ofPittsburgh Press

Rodriacuteguez G 1994 Eacutelites Mercado y Cuestioacuten Regional en Bolivia La Paz ILDISRossM 1999 lsquoThe political economy of the Resource CursersquoWorld Politics 15 (January)297ndash322

Ross M 2001a lsquoDoes oil hinder democracyrsquo World Politics 53(3) 325ndash61Ross M 2001b Extractive Sectors and the Poor An Oxfam America Report Boston MAOxfam America

Ross M 2012 The Oil Curse How Petroleum Wealth Shapes the Development of NationsPrinceton NJ Princeton University Press

Ross M 2015 lsquoWhat have we learned about the Resource Cursersquo Annual Review ofPolitical Science 18 239ndash59

Ruiz Caro A 2002 El Proceso de Privatizaciones en el Peruacute Durante el Periacuteodo 1991ndash2002Santiago de Chile CEPAL-ILPES

Sachs J and A Warner 1995 lsquoNatural resource abundance and economic growthrsquoNational Bureau of Economic Research Working Paper Series No 539 CambridgeMA National Bureau of Economic Research pp 1ndash46

Sanborn C 1991 lsquoThe Democratic Left and the Persistence of Populism in Peru 1975ndash1985rsquo Unpublished PhD thesis Harvard University Department of Government

Sanborn C 2008 lsquoDel dicho al hecho Empresarios y responsabilidad social en el PeruacutersquoRevista Bruacutejula PUCP AbrilndashJulio


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Sanborn C and V Chonn 2015 lsquoChinese Investment in PerursquosMining Industry Blessingor Cursersquo Boston Global Economic Governance Initiative Discussion Paper 2015ndash8

Sanborn C and J L Dammert 2013 lsquoExtraccioacuten de recursos naturales desarrolloeconoacutemico e inclusioacuten social en el Peruacutersquo Americas Quarterly June 19

Sanborn C V Hurtado and T Ramiacuterez 2016 lsquoLa consulta previa en el Peruacute avances yretosrsquo Lima Universidad del Paciacutefico Documento de Investigacioacuten 6 Available athttpwwwupedupeinvestigacion-centrosfondo-editorialcatalogola-consulta-previa-en-peru accessed 20 February 2018

Sanborn C and A Paredes 2015Getting it Right Challenges to Prior Consultation in PeruCentre for Social Responsibility in Mining Sustainable Minerals Institute St LuciaQLD University of Queensland Australia

Sanborn C T Ramiacuterez and V Hurtado 2017 lsquoMining political settlements andinclusive development in Perursquo ESID Working Paper No 79 Manchester EffectiveStates and Inclusive Development Research Centre University of Manchester

Sanborn C and V Torres 2009 La economiacutea china y las industrias extractivas desafiacuteospara el Peruacute Lima Fondo Editorial de la Universidad del Paciacutefico CooperAccioacuten

Saacutenchez Albavera F 1981Mineriacutea Capital Transnacional y Poder en el Peruacute Lima DESCOSantiago M L 2006 The Ecology of Oil Environment Labor and the Mexican Revolution

1900ndash1938 New York Cambridge University PressSchilling-Vacaflor A 2017 lsquoWho controls the territory and the resources Free prior

and informed consent (FPIC) as a contested human rights practice in Boliviarsquo ThirdWorld Quarterly 38(5) 1058ndash74

Schmidt G D 2008 Peru The Politics of Surprise 2nd Edn London Mcgraw-HillSchmitter P and T Karl 1991 lsquoWhat Democracy is and is notrsquo Journal of Democracy

2(3) 75ndash88Schmitter Philippe C (1992) lsquoThe consolidation of democracy and the representation of

social groupsrsquo American Behavioral Scientist 35(4ndash5) 422ndash49Schuldt J 2013 lsquoFuturologiacutea de la economiacutea poliacutetica Peruanarsquo InCuando despertemos en

el 2062 visiones del Peruacute en 50 antildeos edited by Bruno Seminario Cynthia A Sanbornand Nikolai Alva pp 73ndash116 Lima Fondo Editorial de la Universidad del Pacifico

Schuumlnemann J and A Lucey 2015 lsquoSuccess and failure of political settlementsdefining and measuring transformationrsquo Working Paper 2 Political SettlementsResearch Programme Edinburgh University of Edinburgh

Seminario B 2014 Breve historia de los precios poblacioacuten y actividad econoacutemica del Peruacutereconstruccioacuten de las cuentas nacionales 1700ndash2013 Lima PUCP

Seminario B 2015 El desarrollo de la economiacutea peruana en la era moderna Preciospoblacioacuten demanda y produccioacuten desde 1700 Lima Universidad del Paciacutefico

Sen K 2013 lsquoThe political dynamics of economic growthrsquoWorldDevelopment 47 71ndash86Silver News Online 2016 lsquoObuasi galamsey Irrate illegal miners destroy MCE NDC

offices billboardsrsquo 19 MarchSimuntanyi N 2015 lsquoPolitical economy analysisrsquo Unpublished Internal PEA analysis

Center for Policy DialogueSlater D and H Soifer 2010 Ordering Power Contentious Politics and Authoritarian

Leviathans in Southeast Asia Cambridge Cambridge University Press


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Smock D R and A Smock 1975 The Politics of Pluralism A Comparative Study ofLebanon and Ghana New York and Amsterdam Elsevier

SNMPE 2012 Impacto Econoacutemico de la Actividad Minera en el Peruacute Lima SNMPESoifer H 2012 lsquoMidiendo la capacidad estatal en la Ameacuterica Latina contemporaacutenearsquoRevista de Ciencia Poliacutetica 32(3) 585ndash98 (Santiago)

Soifer H 2015 State Building in Latin America Cambridge Cambridge University PressSongsore J A Denkabe C D Jebuni and S Ayidiya 2001 lsquoChallenges of education inNorthern Ghana A case for Northern Ghana Education Trust Fund (NETFUND)rsquo InRegionalism and Public Policy in Northern Ghana edited by Y Saaka pp 222ndash39 NewYork Peter Lang

Stallings B 1992 lsquoInternational influence on economic policy Debt stabilization andstructural reformrsquo In The Politics of Economic Adjustment International ConstraintsDistributive Conflicts and the State edited by Stephan Haggard and Robert R Kaufmanpp 41ndash88 Princeton NJ Princeton University Press

Standing A 2014 lsquoGhanarsquos extractive industries and community benefit sharing Thecase for cash transfersrsquo Resources Policy 40 74ndash82

Starr FM 2016 lsquoNPP will regularize ldquogalamseyrdquo - Akufo-Addorsquo 15 July Available at httpwwwghanawebcomGhanaHomePageNewsArchiveNPP-will-regularizegalamsey-Akufo-Addo-455652 accessed 11 May 2017

Stein F 2010 lsquoBolivian tin miners reconciledrsquo Americas Quarterly Fall Available athttpamericasquarterlyorgnode1922 accessed 1 June 2017

Stepan A 1978 The State and Society Peru in Comparative Perspective Princeton NJPrinceton Legacy Library

Stern S J 1993 Perursquos Indian peoples and the Challenge of Spanish Conquest Huamanga to1640 Madison WI University of Wisconsin Press

Stone D 2004 Think Tank Traditions Policy Research and the Politics of Ideas Manches-ter University of Manchester Press

Sulmont D 1980 lsquoSituacioacuten y perspectiva del movimiento sindicalrsquo Cuadernos Labor-ales N1 Lima PUCP

Sulmont D 2012 lsquoRaza y etnicidad desde las encuestas sociales y de opinioacuten dimecuaacutentos quieres encontrar y te direacute queacute preguntarrsquo In La discriminacioacuten en el Peruacutebalance y desafiacuteos pp 51mdash74 Lima Universidad del Paciacutefico

SUNAT 2017 lsquoEstadiacutestica y Estudios Ingresos Tributarios Recaudados por la Sunat - Tribu-tos Internos seguacuten Actividad Econoacutemica 1998- 2016 (Millones de soles)rsquo Available athttpwwwsunatgobpeestadisticasestudiosbusqueda_actividad_economicahtmlaccessed 20 February 2018

Sutton J and Langmead G 2013 Enterprise Map of Zambia Lusaka InternationalGrowth Centre

Swanzy S A 2016 lsquo ldquoPay us all our royaltiesrdquo ndash Chiefs cry out to finance ministryrsquo16 August Available at httppulsecomghbusinessmining-pay-us-all-our-royaltieschiefs-cry-out-to-finance-ministry-id5384719html accessed 11 May 2017

Szablowski D 2002 lsquoMining displacement and the World Bank A case analysis ofCompantildeia Minera Antaminarsquos operations in Perursquo Journal of Business Ethics 39(3)247ndash73


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Szeftel M 1982 lsquoPolitical graft and the spoils system in Zambia ndash the state as a resourcein itself rsquo Review of African Political Economy (9)24 4ndash21

Tanaka M 1998 Los Espejismos de la Democracia El Colapso del Sistema de Partidos en elPeruacute Lima Instituto de Estudios Peruanos

Teschner B A 2012 lsquoSmall-scale mining in Ghana The government and the galam-seyrsquo Resources Policy 37(3) 308ndash14

Thorp R and G Bertram 2013 Peruacute 1890ndash1977 Crecimiento y Poliacuteticas en una EconomiacuteaAbierta Lima Universidad del Paciacutefico

Thorp R S Battistelli Y Guichaoua J Orihuela and M Paredes 2012 The Develop-mental Challenges of Mining and Oil Lessons from Africa and Latin America OxfordPalgrave MacMillan

Tilly C 1978 From Mobilization to Revolution Boston MA Addison-WesleyTilly C 2004 Contention and Democracy in Europe 1650ndash2000 Cambridge Cambridge

University PressToranzoRocaC 2009 lsquoEconomiacuteaPoliacuteticade loshidrocarburos enBoliviarsquoDRAFTpp 3ndash5

Available at httpsiteresourcesworldbankorgEXTLACOFFICEOFCEResources870892-1253047679843CarlosToranzo2009pdf accessed 20 February 2018

Torres V 2013 Grupos Econoacutemicos y Bonanza Minera en el Peruacute el Caso de Cinco GruposMineros Nacionales Lima Cooperaccioacuten

Tsikata F S 1997 lsquoThe vicissitudes of mineral policy in Ghanarsquo Resources Policy 23(1)9ndash14

Tsuma W 2010 lsquoGold Mining in Ghana Actors Alliances and Powerrsquo ZEF Develop-ment Studies University of Bonn

Tuesta F 1996 Los Enigmas del Poder Fujimori 1990ndash1996 Lima Fundacioacuten FrederichEbert

TWN-Africa 2016 lsquoGhana governmentrsquos development agreements with Goldfieldsillegal ndash TWN-Africarsquo Available at httptwnafricaorgGoldfields20development20agreement20with20Ghana2200illegal-pr-2016pdf accessed 11 May2017

UNCTADSTAT 2017 lsquoFree market commodity prices annual 1960ndash2016rsquo Available athttpunctadstatunctadorgwdsTableViewertableViewaspxReportId=30727accessed 20 February 2018

Valencia L 2014Madre de Dios iquestPodemos Evitar la Tragedia Poliacuteticas de Ordenamiento dela Mineriacutea Auriacutefera Lima Sociedad Peruana de Derecho Ambiental

Van Cott D L 2007 From Movements to Parties in Latin America The Evolution of EthnicPolitics Cambridge Cambridge University Press

Vaacutesquez E 2016 lsquoPobreza e inversioacuten social en Peruacute al 2011rsquo In Metas del Peruacute alBicentenario pp 110ndash24 Lima Consorcio de Universidades

Vergara A and D Encinas 2016 lsquoContinuity by surprise Explaining institutionalstability in contemporary Perursquo Latin American Research Review 51(1) 159ndash80

Villavicencio A 2015 lsquoLa negociacioacuten colectiva en el Peruacute la hiperdescentralizacioacuten ysus muacuteltiples inconvenientesrsquo Derecho PUCP N 75 pp 333ndash53 Lima PUCP

Vom Hau M and S Hickey 2016 lsquoPower relations political settlements and thedeployment of state capacity in the developing worldrsquo Mimeo Paper prepared for


References

250

ESID Manchester Effective States and Inclusive Development Research CentreUniversity of Manchester

Wainwright J and M Robertson 2003 lsquoTerritorialization science and the colonialstate The case of Highway 55 in Minnesotarsquo Cultural Geographies 10 196ndash217

Wardell D A 2006 lsquoCollision collusion and muted resistancemdashcontrasting early andlater encounters with Empire forestry in the Gold Coast 1874ndash1957rsquo In Collisions ofCultures and Identifies Settlers and Indigenous Peoples edited by P Grimshaw andR McGregor pp 79ndash103 Melbourne VIC University of Melbourne

Watts M J 2004a lsquoAntinomies of community Some thoughts on geography resourcesand Empirersquo Transactions of the Institute of British Geographers 29(2) 195ndash216

Watts M J 2004b lsquoResource Curse Governmentality oil and power in the NigerDelta Nigeriarsquo Geopolitics 9(1) 50ndash80

Watts M J with E Kashi (photographer) 2008 The Curse of the Black Gold New YorkPowerhouse Press

Weber-Fahr M 2002 Treasure or Trouble Mining in Developing Countries WashingtonDC World Bank and International Finance Corporation

Whitehead L 1972 lsquoEl impacto de la Gran Depresioacuten en Boliviarsquo Desarrollo Econoacutemico12 (45) 49ndash80

Whitfield L 2011a lsquoCompetitive clientelism easy financing and weak capitalists Thecontemporary political settlement in Ghanarsquo DIIS Working Paper 27 CopenhagenDanish Institute for International Studies

Whitfield L 2011b lsquoGrowth without economic transformation Economic impacts ofGhanarsquos political settlementrsquo DIIS Working Paper 28 Copenhagen Danish Institutefor International Studies

Whitfield L 2018 Economies after Colonialism Ghana and the Struggle for PowerCambridge Cambridge University Press

Whitfield L O Therkildsen L Buur and A M Kjaeligr 2015 The Politics of AfricanIndustrial Policy A Comparative Perspective Cambridge Cambridge University Press

Wilson F 2004 lsquoTowards a political economy of roads Experiences from Perursquo Devel-opment and Change 35(3) 525ndash46

Wise C 2003 Reinventando el Estado Estrategia Econoacutemica y Cambio Institucional en elPeruacute Lima Universidad del Paciacutefico

Wodon Q 2012 Improving the Targeting of Social Programs in Ghana Washington DCWorld Bank

Wood Mackenzie 2012 Ghanarsquos Upstream Sector Country Overview Slides LondonWood Mackenzie

World Bank 1992 lsquoStrategy for African miningrsquo World Bank Technical Paper No 181Washington DC World Bank

World Bank 2003 Project Performance Assessment Report Ghana Mining Sector Rehabili-tation Project (Credit 1921-GH) and Mining Sector Development and Environment Project(Credit 2743-GH) Washington DC World Bank

World Bank 2005 lsquoRiqueza y Sostenibilidad Dimensiones Sociales y Ambientales de laMineriacutea en el Peruacute Unidad de Gestioacuten del Paiacutes-Peruacute Desarrollo Ambiental y SocialSostenible Regioacuten Latinoameacuterica y El Caribersquo Washington DC World Bank


References

251

World Bank 2008 lsquoInternational Development Association programme document fora proposed credit in the amount of SDR82 Million (SS$13 million equivalent) to theRepublic of Ghana for a natural resources and environmental governance first devel-opment policy operation Report No 42787-GHrsquo Washington DC World Bank

World Bank 2009 lsquoEconomy-wide impact of oil discovery in Ghanarsquo 30 NovemberReport No 47321-GH

World Bank 2013 lsquoProject performance assessment report Ghana Land Administra-tion Projectrsquo Report No 75084 Washington DC The World Bank

World Bank 2016a lsquoGasto puacuteblico en educacioacuten total ( del PIB)rsquo Available at httpdatosbancomundialorgindicadorSEXPDTOTLGDZS accessed 20 February 2018

World Bank 2016b lsquoWorld development indicators Perursquo Available at httpdataworldbankorgcountryperu accessed 20 February 2018

World Bank 2017 lsquoThe World Bank in Peru Overviewrsquo Available at httpwwwworldbankorgencountryperuoverview accessed 15 July 2017

Yampara S 2011 lsquoCosmovivencia Andina Vivir y Convivir en Armoniacutea Integral mdashSuma Qamantildearsquo Bolivian Studies Journal 18 1ndash22

Yashar D 2005 Contesting Citizenship in Latin America The Rise of Indigenous Movementsand the Postliberal Challenge Cambridge Cambridge University Press

Zegarra E J C Orihuela and M Paredes 2007 lsquoMineriacutea y economiacutea de los hogares enla sierra peruana impactos y espacios de conflictorsquo Lima GRADE CIES Documentode Trabajo No 51


References

252

Index

Note bold = extended treatment or term highlighted in text f = figure m = map n = footnotet = table [-] = intermediate page skipped

abusa share system 162 187accountability 128 130 139 153 188 217ndash18accumulation 39 117 136 145 182 218 222Acemoglu D 17 22 n5 26 79 105 111 n5activistsactivism 6 16 27 59 109 144 146

186 198 210Act of Talara 31ADEX see National Exportersrsquo AssociationAdministration of Lands Act (Act 123

Ghana) 165African Development Bank 138African Union (AU) 128agricultureagricultural 29 46 59 87 112 n17

116 120 121 124 126 131 133 137139 149 156 166 197 217

elites 64 83 104Aguaraguumle range and oilfield 76 94Akabzaa T 152 169 176alluvial mining 76 205Altiplano (Bolivia) 74 86 87 88 99 100

112 n20see also AndeanAndes

Amanor K 180 181Amazon 34 42 44 47 50 55 57 69 n3

70 n21 71 n32 78 112 n20American Popular Revolutionary Alliance

(Alianza Popular Revolucionaria AmericanaAPRA) 29 30ndash1 32ndash3 34 41 69 n5

American Roan Selection Trust (RST) 120ndash1131 132 t42

AndeanAndescountries 15 213 219highlands 31 34 55 57 61 71 n32 74 97

105 111 n6 205 215see also Altiplanomountain range 14 76

Anglo-American Corporation (AAC) 120 145f42

Anglogold Ashanti 178 196 n34Angola 122 m41 135 136 147 m42Antamina (mine) 44 47

AP see Popular ActionAPRA see American Popular Revolutionary

AllianceAramayos (family) 85 111 n16Arellano-Yanguas J 36 52 61 67 198 206Argentina 71 n29 75 m31 76 77 m32 89

94 96 101 109 112 n21Arias-Balloacuten (mining company) 41Aristocratic Republic (Peru) 29artisanal and small-scale mining (ASM) 11 14

24 44 47ndash50 59 76 161 t52 167ndash70 180186 189ndash92 202 205 215ndash16 221 224 n3

see also galamseyAsante E 198AshantiAsante 154 156ndash7 162 163 184

194 n4 205Assies W 83Aubynn A 190 192 193authoritarianism 89 129 211 217competitive authoritarianism 69 n6 125

t41 222vulnerable authoritarianism 154 155 t51

157ndash8autocratic government 8 19 32 211autonomy regional 11ndash12 98 100ndash1 127

208Ayee J 152 176 179Aymara 55 69 n3 74

Bagua 70 n21Banda R 143Bank of Agricultural Credit (Peru) 29Banzer H 22 n6 82 96Barotseland 126 136Barragan R 104Barrick Gold 143 145 f42 146bauxite 152 167 f51Bebbington A 26 119 187Belauacutende F 30ndash1 33 41 44 69 n5Benavides Group 41Beni (Bolivia) 100 101 104 110 n3


Berry S 158 181Bertram G 22 40ndash1BHP 13Boer War 163Bohan Plan 87 106 112 n21Bolivian Centre for Documentation and

Information (Centro de Documentacioacuten eInformacioacuten Bolivia CEDIB) 110

Bolivian Mining Corporation (CorporacioacutenMinera de Bolivia COMIBOL) 75 83 88ndash991 92ndash4 112 n25 113 n31 114 n34 202224 n4

Bolivian National Oilfields (YacimientosPetroliacuteferos Fiscales de Bolivia YPFB) 77m32 95ndash6 98 101 106 112 n25 115 n54

Booth D 8 72Botswana 153 194 n2Brazil 13 43 m21 49 m22 51 m23 75 m31

76 77 m32 89 96 98 100ndash1 109112 n20 114 n42 224 n2

British mining companies see United KingdomBritish South Africa Company (BSAC) 115

117 119 124 125 t41 131 132 t42Broz J (Tito) 135BSAC see British South Africa CompanyBurkina Faso 153Busch G 81Busch Law (Bolivia) 95Busia K A 155 t51 159

Cajamarca (Bolivia) 43 m1campesinos see peasantsCanada 133 144 146Cano A 48[-]50canon minero (Peru) see mining canoncapitalism 138 144 146 148 149 161 t52

163ndash4 200 202ndash3cash transfer programme 100 114 n38 174

see also social protectionCatavi massacre 88caudillos 28 39 111 n12CEDIB see Bolivian Centre for Documentation

and InformationCentral African Federation (CAF) 120ndash1

125 t41 126 131 134centralization 11 22 73 120 146 154 159

165 184ndash5 193 201 217see also decentralization

centralndashlocal relations see nationalndashsubnationalrelations

CENTROMIN 42 69nn911 70nn13 2371n25Cerro de Pasco Mining Company

(CPMC) 39ndash40 42 44 69 n8Cerro Verde (mine) 44 71 n26Chaco (Bolivia) 76 94ndash5 99 106 215Chaco War 80ndash1 85 94 100 102 111 n15

114 n39

Chapare (Bolivia) 89 97 99Chazan N 181chieftaincies (Ghana) 12 154 181

see also traditional authorities stoolsChile 29 32 43 m21 49 m22 51 m23 61

66 71 n29 75 m31 77 m32 98 99 111n12 112 nn20 21 133 203

Chiluba F 123 139ndash40 142Chimbote (Peru) 41China 13 58 102 132 t42 134 144ndash6Chinalco 13China Non-Ferrous Metals Company 145 f42Chuquisaca (Bolivia) 76 102 106CIPEC see Intergovernmental Council of

Copper Exporting Countriescitizenship rights 1 25 209 218 222civil society 20 22 n9 63 67 118 128 129

130 132 t42 140 142ndash3 169 220clientelism 7 8 9 79 82 161

competitive clientelism 8 82 108 142154ndash7 155 159ndash60 174 176ndash80 188190 191 192 210 211ndash14 221 223

coalitions 6 8 11 23 26 65 67 73 80 8182ndash3 126 142 149 153 158 159 165172 176 182 185 186 187ndash8 191 194196 n33 216 218 222

see also electionsCOB see Confederation of Bolivian Workerscoca

cocaleros (coca growers) 83 89 97 99 112 n26eradication 99

Cochabamba (Bolivia) 75 m31 77 m32 8999 106 110 110 n3

cocoa 157 170 172 182 194 n1Cold War 30 32 134 138colonialism 5 14 15 19 200ndash1 208

colonial period (Bolivia) 79ndash80 90 110ndash11nn4 5 6 12 114 n33 194 n7

colonial period (Ghana) 152 154ndash7 163ndash4165 180ndash1 184 195 n24

colonial period (Peru) 23 38colonial period (Zambia) 119ndash21 124ndash6

131ndash3 148internal 87 89 112ndash13 n26see also pre-colonial period

competitive clientelism see clientelismCOMIBOL see Bolivian Mining CorporationComiteacuteCiacutevico (Citizenrsquos Committee Bolivia) 95ndash6commodities 78 145

boomsuper-cycle 86 169 170 208 220chainsexports see exportsmarkets 66 80 85 108ndash9 203 218 219prices 19 59 124 125 t41 148 173 200

201ndash2 213 214 217transport 22 n3see also infrastructure


Index

254

communal lands 25 63Communist Party (Peru) 30Communist Party of PerundashShining Path (Partido

Comunista del PerundashSendero Luminoso) 3334ndash5 44

competitive authoritarianism seeauthoritarianism

concessionsartisanal and small-scale mining 42 44

90ndash1 114 n36 167 192 194 n9hydrocarbons 55medium and large-scale mining 113 n31

119 163 192non-concessional deposits 40spatiality 46 48 49 m22 205system 45 52 53 f26ndash7 63 92 101 163ndash4

179 180ndash1 187 191tax 141water 99

Confederation of Bolivian Workers (CentralObrera Boliviana COB) 82 91

CONFIEP see National Confederation ofPrivate Business Institutions

Conga (mine) 54Congo see Democratic Republic of the Congoconstitution 23 83 115 140 142 165 187 222

of Bolivia 2009 90 102 105of Ghana 1960 157of Ghana 1969 181of Ghana 1979 181of Ghana 1992 182 185 192of Peru 1920 29of Peru 1979 33of Peru 1993 35 69 n6and resource nationalism 207

contamination environmental 108 190Contreras M 81 86ndash7Convention Peoplersquos Party (CPP Ghana) 155

t51 156ndash7 165 181cooperative mining 11ndash12 75 84 90ndash4 107

109 113ndash14 nn27 29 31ndash4 36 216co-optation strategy 129 157 186 193 212copper 40 115 119 205

demand for 38 120 223deposits 37 41 74 131extraction methods 41ideas of 14 219institutions see Intergovernmental Council

of Copper Exporting Countries(CIPEC)

mine 12 42 44 47 136 145 f42prices 42 115 123 127 128 133 135 137

139ndash40 142ndash3 149 201production 41 71 n26 126see also ideas resource nationalismZambian industry 115 119ndash20 131ndash48 220see also commodities

Copperbelt (Zambia) 12 116 121 122 m41124[-]6 128ndash9 131[-]3 136 139 146 147m42 148 201 205 206 215

corporate social responsibility (CSR) 15 36123 203 206

corruption 8 23 29 32 36 45 62 66 106123 140 144 148 190ndash1 218 220

cotton 40 69 n5coup drsquoeacutetat 29 30 31 32 36 81 82 89 95

111 n14 123 127 138 154 155 t51157ndash8 181

CPMC see Cerro de Pasco Mining CompanyCPP see Convention Peoplersquos PartyCrabtree J 66 73 209CSUTCB see Unified Confederation of

Unionized Peasant Workers of BoliviaCuajone (mine) 42Cuba 30Cuzco (Peru) 40

Dargent E 35 209Davis G A 1debt crisis 44 89 96 106decentralization 11ndash12 24 36ndash7 47 48 52

55 62 66 73 89 97 104 114 n45 115n53 141 203

see also centralizationdecolonization 154ndash7 181see also independence post-colonial period

democracydemocratic 4 5 23 24 67 68 69n6 82 108 158 159 171 196 198 212

choiceless 139competition 19consolidation 26democratic spring (Peru) 30 40institutions 4 25 125 t41 196multiparty 119 129 130 135 138 140

153 154 155 t51 159 182 222pacted 83 84 t31 97ndash8process 62property-owning democracy 155 t51 169reform 30transition to democracy 33ndash4 36ndash7 45 48

50 62 65 66 119 130 138 192 194see also elections

Democratic Republic of the Congo 32 120122 m41 124 133 135 136 147 m42

Department for International Development(DfID UK) see United Kingdom

developmentinclusive 1 14ndash16 24 25ndash6 59ndash63 64

65ndash8 119 131 149 174ndash6 193210ndash19 224

models of 14ndash15 68 94 107 148resource dependent 4 207see also resource curserural 15 61 88 107 115 127 128 134 189


Index

255

development (cont)sustainable 58 65 117uneven 127 133 134see also urbanndashrural divide

Development Agreements 123 128 131 t42140 143 144 148

developmental state see stateDfID see United Kingdomdiamonds 152 167 f51di John J 7 71 118 140 194displacement 76 83 94

see also placedispossession 28 218 222

see also land place property rights territorydistribution

of power 7ndash9 12 26 27 64 72of rentswealth 7ndash9 13 14 25 26 50ndash4 55

59 60 67 70 n17ndash18 77 83 t31 100ndash1103ndash4 105 107

district assemblies (Ghana) 159 183 f55185 206

dominant partyleader settlement 8 19 8183 84 t31 102 108 129 154 155 t51158ndash9 192 203 208 211 213 214 218221ndash2

Don Mario (mine) 76 113 n28Dumett R E 162 163ndash4 187 194 n10Dunkerley J 89Dutch Disease 213

Eastern Lowlands Bolivia 76 80 82 83 9497 100 109 112ndash13 n26 205

Economic Recovery Programme(ERP) Ghana 158

Effective States and Inclusive DevelopmentResearch Centre (ESID) 18 22 n4

EITI see Extractive Industries TransparencyInitiative

elections electoral 22 29 33 82ndash4 t31 89105 108 110 123 127 136 138 148187 211ndash12 214 216ndash17

competition 128ndash30 138 159ndash60 176ndash7179 191ndash3 196 n33 216

cycles 8 62 129 138 142 179 182 211discussion of specific election Peru 29 3033ndash4 36 224 n6 Bolivia 82 83 89 100102 113 208 Zambia 129 140 143Ghana 155 t51 156ndash7 172 191195 nn18 31

electorate 62 111 n9 142fraud 69 n6 151 n3military elected 82see also militarymining role in elections 57 143officials 20quotas 62ndash3 71 n32re-election 62 83 102 130 172

rejection of elections 32 140subnational 48 62 97 100 115 n48

159 202see also nationalndashsubnational relationssuffrage 23 29 81 111 n4 155 t51see also coalitions democracy

elitesagreement 11 62 97 108bargainspacts 6 10 16 73 83 84 t31 146

153 182 222commitment 26 61 68 128 153

176ndash7 193inter-elite competition 8 19 210 218military see militarymining 10 80 85 93 113 n28see also Patriarchs of Silver tinpolitical 5 7 28 31 83 85 86ndash7 98 102

105 130 138 158 159 176 178 184186ndash8 191 193 198 205 212 216 221

ruling 67 72 109 119 128 157 158 160166 172ndash4 181 185ndash6 191ndash2 193 212

subnational 28 79 86 102 103ndash6 157 206217 220

transnational 22 n3employment 15 60 66 77 84 t31 88 99

103 106ndash7 114 n33 133 139 158 161t52 162 165 167 188 202 205 214

direct vs indirect 59 188informal 61laws 140unemployment 118 191

epistemic communities 27ERP see Economic Recovery ProgrammeESID see Effective States and Inclusive

Development Research Centreethnicity 7 77 205Europe 33 78ndash9 85 110 n5 116 126 131[-]3

156 163ndash4 194 n8European Community 138see also colonialism

excluded factions 4 7ndash9 11 13 18 28 30 3264 71 n32 72 85 90 97 103 109ndash10146 158ndash9 188 191 198 206 215220 224

horizontal 7 16 72 176 210ndash11vertical 7 72 210ndash11

exports of natural resources 29ndash31 44 48 5067 71 n29 80 92 107 112 n25 120 128139 150 t43 152 165ndash6 173 196 n34

ASM exports 188 216see also artisanal and small-scale miningcollapse of export markets 80export-led development 22ndash3 25 36

37ndash41 f21ndash24 59ndash60 65 100115 118

hydrocarbons 3 29 78 99infrastructure see infrastructure


Index

256

quotas 86see also Intergovernmental Council of

Copper Exporting Countries (CIPEC)multi-facility export zone (MFEZ) NationalExportersrsquo Association (ADEX)Organization of the Petroleum ExportingCountries (OPEC) protectionism

extractiveindustries see hydrocarbonsminingrents see rents royalties taxationsee also natural resources

Extractive Industries Transparency Initiative(EITI) 2 53 132 t42 185

Ghana EITI (GHEITI) 185 188see also transparency

Fantis 154[-]6 194 n3Farthing L 98Federal War Bolivia 80 111 n14Federation of Rhodesia see Central African

FederationFENCOMIN see National Federation of

Cooperative Miners of BoliviaFerguson J 136 148 200 219Fernaacutendez-Maldonado J 69 n8First Quantum Minerals 145 146First Republic Ghana 154 155 t51First Republic Zambia 120fiscal

policy 52 62 86 170ndash2 203 209responsibility 141revenue 217 219space 128 143 149transfers 15 209

fishing 40ndash1foreign direct investment (FDI) 1 59

212 217FPIC see free prior and informed consentFraser A 115 136free prior and informed consent (FPIC) 2

54ndash6 221see also indigenous peoples

free trade agreement (FTA) 50 54ndash5 213Fraser 130 136French Annales School 19FSTMB see Union Federation of Bolivian Mine

WorkersFujimori A 22 n6 34ndash5 45 47 52 54 69 n6

224ndash 5 n10post-Fujimori period 36 45 63

Fujimori K 52

galamsey 189ndash93 196 n35 216see also artisanal and small-scale mining

Galeano E 14gamonales 30Garciacutea Linera Aacute 101 106 115 nn47 50

Garciacutea Peacuterez A 34 36 52Gas War (Guerra del Gas Bolivia) 89 99ndash100General Mining Law (Ley General de Mineriacutea

Peru) 44Geological Mining and Metallurgical Institute

(Instituto Geoloacutegico Minero y Metaluacutergico(INGEMMET) 46 69 n2

gender 1 166Germany 29 50 156Ghana Extractive Industries Transparency

Initiative (GHEITI) see ExtractiveIndustries Transparency Initiative (EITI)

GHEITI see Ghana Extractive IndustriesTransparency Initiative

Gini index 60ndash1 150 t43 175 f54 176global economic crisisGreat Depression 29ndash30 40 80 86ndash7

111 n161970s 32 44 115 123 1271980s 942000s 144ndash5 170

Global Witness 197ndash8gold 187 189 194 nn8 9artisanal and small-scale mining of see

artisanal and small-scale miningdemand for 37 40 162 223deposits 37 40 74 151Ghana history of extraction in 160ndash76ideas of 14 219see also ideas resource nationalismmines 13 76 124prices 48 166 170ndash3 201production 151 161 163 165 169 173

t53 178 189 f56 196 n34 216rush 163see also artisanal and small-scale mining

commoditiesGold Coast 152 154 156 163ndash4 181 194 n8

195 n24governancenatural resources see natural resourcessee also government institution state

taxationgovernmentsubnational (general) 2 12 15 52 59

66 198localmunicipal 52 62 66 69 n6 70 n18 71

n32 97ndash8 101 105 107 114 n44 115n53 134 165 215 216

see also district assembliesregionaldepartmental 12 48 70 n18 96

101 104nationalcentral 29 45 48 52 55 62ndash3

66 77 95ndash6 98 101 102 104 106ndash7114 n41 116 134 146 181 182ndash3186ndash7 198 206 213 217 220

Great Britain see United Kingdom


Index

257

Great Depression see global economic crisisguano 21 n1 29

Guaraniacute peoples 76 205 215Guerra del Gas see Gas Warguerrilla movements 30ndash1 112 n24Gulf Oil 96Gyimah-Boadi E 160

hacienda see landed estateHickey S 2 6 25HIERRO PERU 42 69 n9 11 70 n13 23

71 n25Hilson G 189Hindery D 113 n28Hochschild family 85ndash6 111 n16holding power 8 10ndash11 18 27 29 59 64 66

94 97 103 105 109 114 n37 201 206ndash7222 225 n15

Humala O 36 50 52 54 55 70 n21Human Rights Ombudsman (Defensoria

del Pueblo Peru) 56 f28 209Humphreys M 3hydrocarbons 3 11 17 19 55 94ndash102 104

106ndash7 111 n12 112 n26 178 202 209213 218 220ndash1 225 n14

investment 99 221Law of 2005 101 107 115 n50nationalism 94ndash7production 76ndash8 87ndash8 112 n21 25spatiality 76ndash8 205ndash6see also natural gas oil

hydropowerhydro-electric 11 21 n3 197hyperinflation 34 82 89

ICMM see International Council of Mining andMetals

ideas 6ndash8 9ndash10 12 14 16ndash17 62 88 103109ndash10 112 n21 114 n41 142 149153ndash4 161 184ndash5 187 190 193 198199 201 207ndash10 221 222 223ndash4

change innew 19 27 81 218development ideas about 31 58 82 88 93

96 105 211 214 218ideas fuerza 94ndash6 102the state ideas about 135transnational 135 169 171 203ndash4see also memories resource nationalism

identity formation 5 219IFC see International Finance Corporationillegal miningextra-legal mining 50 51 m23

161 t52 167 170 189ndash92 195 n13 216see also artisanal and small-scale mining

galamseyILO 169 (1989 Indigenous and Tribal Peoples

Convention of the International LabourOrganization) 47 54ndash6 70 n21

imaginary national development see ideas

IMF see International Monetary Fundimport substitution industrialization (ISI) 32incentives 2 7 10 161 184 190 197ndash8 211

218 223to extract 5investmenttax 36 45 140ndash1 143ndash4

166 209political 5 26 59 60 62 63 66 108

118ndash19 128 130 160 176 187193 212

inclusive development see developmentindependence

Bolivia 111 n12 112 n19 115 n51Ghana 154 156ndash7 158 164ndash6 170 181

184 188 208Peru 23 28ndash30 57 222Zambia 116120ndash1 126ndash7 130 133 135 140see also decolonization post-colonial period

indigenous peoples 15 25 28 69 n3 73 8894 115 n51 121

consultation see free prior and informedconsent (FPIC) Law of Prior Consultation

entrepreneurship 116 138 141exclusion of 30 62ndash3 76 215 see also

racismlaws related to 29 62ndash3 71 n32 107

see also elections quotas Law of PriorConsultation Law of HighwayConscription

mining and 63 65 74 88ndash9 93 114 n33movements 9 55 97 112 n18 26 198rights 37 50 55 57 65 67territory see territoryunpaid labour 29 69 n4see also labour Law of Highway Conscription

indirect rule 124 180ndash1industrializationindustrial transformation

41 42 57 65 92 100 106 107116 118

INEI see National Institute for Statistics andInformatics

inequality 1 22 32 60ndash1 119 142 150 t43174ndash6

see also gender indigenous peoples povertyrace racism urbanndashrural divide

informality informal labour informal sector35 48 50 51 m23 61ndash2 67 75ndash6 128ndash9142 146 149 216 217

see also artisanal and small-scale mininggalamsey

infrastructure 29 34 66 86 104 120 126134 135 146 164 166

export 121 134 136mining and hydrocarbons 11 21ndash2 n3 86

101 119INGEMMET see Geological Mining and

Metallurgical Institute


Index

258

Institute for Land Reform and Colonization(Instituto de Reforma Agraria y ColonizacioacutenIRAC Peru) 41 see also land

institution 2 4 26 108of accountability 129 217change 2 10 24 58 73 117 118 211

215 221colonial 111 n6democratic 4 25 36 125 t41 197extractivist 78ndash80 110ndash11 n4form 4 9 16innovation 27 65 73 199modernization 57 211reform 27 214ndash15representative 62 67see also international financial institutions

(IFI)inter-elite pacts see elitesIntergovernmental Council of Copper

Exporting Countries (CIPEC) 32 132 t42133ndash4

International Council of Mining and Metals(ICMM) 58 185ndash6 203

International Finance Corporation (IFC) 10 55international financial institution (IFI) 32 34

54 123 138 169 202ndash3 220 see alsoInternational Finance Corporation (IFC)International Monetary Fund (IMF)World Bank

International Labour Organisation 1989Indigenous and Tribal PeoplesConvention see ILO 169

International Monetary Fund (IMF) 33 4758 123 131 t42 149 158ndash9 166 171195 n17

International Petroleum Company (IPC) 31IPC see International Petroleum CompanyIRAC see Institute for Land Reform and

Colonizationiron ore 41 76 92ndash3Izama A 6

Japan 36 50 92

Kabwe (BrokenHill Zambia) 13 119 121m41Kapwepwe S 126Karl T 4 6 17 26 197 198 210Kaunda K 120ndash1 123 126 133 149

208 214Kaup B 98 113 n28Khan M 7ndash8 17 27 72 94 114 n32 118

155 t51 191 215 222 225 n15kinship 7 168kleptocracykleptocratic 19 82 211Kohl B 98Korea 92

Korean War 120

Kosmos Energy 179Kufuor J 154 t51 169 179Kumasi (Ghana) 168 m51 194 n4

Labour 76 81 91 107 121 140 148 164188 206 216

force 61 74 114 n33 189forced labour 28ndash9 110ndash11 n4 162 194 n7

see also Law of Highway Conscriptioninformal 35 75 129market 16 35 60 63 156 213 217migration 124ndash6 133 148productivity 61reform 64rights 25 40 61ndash2 64 131[-]3unionsmovements 5 29 32 40 61 81 82

83 86ndash8 109ndash10 121 201ndash2 208land 25 163 167ownership 160 181 186landowner 29ndash30 57 80 186 see also

landed estatereform 30ndash1 81 see also Institute for Land

Reform and Colonizationrights 170 181see also dispossession place property rights

stools territorylanded estate (hacienda) 64 81 88 94La Oroya (Peru) 44La Paz (Bolivia) 74 75 m31 77 m32 78 80

85ndash6 88 94 96 98 104 106 110 n3111 n14 113 n28 115 n51

Larmer M 116Las Bambas (mine) 71 n26Law Association of Zambia (LAZ) 128law enforcement 70 n21 92 107 113 n26

190ndash1 192Law of Highway Conscription (Ley de

Conscripcioacuten Vial Peru) 69 n4Law of Prior Consultation (Peru) 55 63Law of Promotion of Gold Mining in the

Peruvian Amazon 44LAZ see Law Association of ZambiaLEAP Livelihood Empowerment Against

PovertyLeguiacutea A 29Levy B 8 125 t41 141 176 210 214Liberty Movement (Movimiento Libertad

Peru) 34Lima (Peru) 28 43 m21 49 m22 51 m23 53

f27 63 66Lithium 92ndash3Livelihood Empowerment Against Poverty

(LEAP) 174 175 f53 see also cash transferprogramme

Livelihoods 107 185 191 216longue dureacutee 19 73 79 109 117 180 214

216ndash18 219 221ndash2


Index

259

Lungu E 129Lungu J 136Lusaka (Zambia) 116 121 122 m41 129 133

148 215

Madre de Dios (Peru) 40 53 f27 76 205Mahama J 155 t51 172 178 192

195 n31 200Mahoney J 2Malawi 120 122 m41 126 146 m42 see also

NyasalandManganese 152 167 f51Marcona Mining Company (mMC) 41ndash2Mariaacutetegui J C 30materiality of natural resources 17 103 199

205ndash7 222 223Mazoka A 140MC see Ministry of CultureMEF see Ministry of Economy and Financememories 9 11 14 21 149 187 see also

ideasMercury Law1989 (PNDC Law 217

Ghana) 167ndash8Mercury Ordinance Law of 1933 (Ghana) 164Mesa C 100 114 n46 115 n48meta-settlements 117 217 222methodological nationalism 18Mexican Petroleums (Petroacuteleos Mexicanos)

see PEMEXMFEZ see multi-facility export zonemiddle class 30 61 64 67 133

urban 29 88 96 100vulnerable 61 63 67

military 34ndash5 36 44 50 62 65 80 82 92 99127 194 n5

elites 4 7 26 52 83rule 31ndash4 35 41ndash4 57 64 68 69 n8 81

82 84 t31 89 95 96 106 111 n12154 155 t51 157ndash8 166 181ndash2195 nn24 26 214

see also coup drsquoeacutetatMillennium Development Goals 173 195 n21MINAM see Ministry of the EnvironmentMINEM see Ministry of Energy and MinesMinera Asociada Tintaya 44Mineral Development Fund (Ghana) 182 183

f55 184 185 195 n25 209Minerals and Mining Law (Ghana)

Minerals Act 1962 (Act 126) 165ndash6 169Minerals and Mining Law 1986 (PNDC

Law 153) 165Minerals and Mining Act 2006 (Act

703) 169 177 178 182Minerals and Mining (Amendment) Act

2010 (Act 794 Ghana) 170Minerals Commission (Ghana) 166 169 182

185 192

Mines and Mineral Act1995 (Zambia) 123mining

communities 148 153 167 172 183 184188 195 nn18 25 209

companies 20 30 39 41 42 46 50 52 5458 71 n24 75 86ndash7 89 93 110 113 n28118 120ndash1 123 131 133 136 139 141143ndash4 146 160 161 t52 164ndash5 166 169172 178ndash9 183 186 188 190 192 194n8 200 202 206 225 n12

concessions see concessionscooperatives 11ndash12 75 84 t31 90ndash4 107

109 113 nn27 29 31 114 nn32 33 3436 216

exploration 45 46 49m22 55 70 107 114n34 119 146 m42 218

illegal 51 161 t52 170 189ndash93 195 n13216 see also artisanal and small-scalemining

large-scale 11 21 n3 22 24 30 37 45ndash6 4850 52 54 57 58ndash9 61 64ndash5 107 152167 170 190 191 202 216 224

licenses 49 m22 75 m31 147 m42 167168 m51 178 216

medium-scale 30 39ndash40 48 66 91ndash3 215224 n5

production 42 44ndash5 78revenue 92 104 115 n51 134 136 152

172 174 182ndash4 186 188 see alsoroyalties taxation

rights 46 f25 48 70 n14 94small-scale see artisanal and small-scale

miningsurface 41 64 132 t42 143 146 167

205 207underground 41 74 132 t42 167 205 207

Mining Bank (Peru) 40 42 44 48mining canon (canon minero Peru) 52 53 f26

27 59 61 65 66 70 n18 134 206 213Mining Law 2014 (Bolivia) 91ndash3 107mining law (Peru)

Mining Code 1901 38Mining Code 1950 41General Mining Law 1981 44

Mining Programme in Solidarity with thePeople (Programa Minero de Solidaridad conel Pueblo PMSP Peru) 52

Mining Review Committee (Ghana) 170 179195 nn15 16

Ministry of Culture (Ministerio de Cultura MCPeru) 55 69 nn2 3

Ministry of Economy and Finance (Ministerio deEconomiacutea y Finanzas MEF Peru) 34ndash5 5471 n28

Ministry of Energy and (Mines Ministerio deEnergiacutea y Minas MINEM Peru) 4243 m21 47 55 69 n2


Index

260

Ministry of Lands and Natural Resources(Ghana) 172 177 189 190

Ministry of Production (Ministerio de ProduccioacutenPRODUCE Peru) 69 n2

Ministry of the Environment (Ministerio delAmbiente MINAM Peru) 50 51 m2354 209

Ministry of the Presidency (Peru) 35Mitchell T 4ndash5MMD see Movement for Multi-Party

DemocracyMNR see National Revolutionary Movementmodernism 15ndash16modernization 8 30ndash1 46 57 62 67ndash8 84

t31 92 95 115 211 219Mohan G 6Molina F 105 112 n20Morales E 83 88 91ndash3 94 96 98ndash102 105ndash7

111 n11 113 nn26 31 114 n46 208 214Morales-Bermuacutedez F 32Mosley P 139Movement for Multi-Party Democracy (MMD

Zambia) 123 125 t41 127ndash9 130 138140ndash3 151 n3

Movement to Socialism (Movimiento alSocialismo MAS Bolivia) 77 83 t31 8788 90ndash3 94 96 98ndash101 102 105ndash7108ndash9 208ndash9 213 214 220 224 n4

Mozambique 122 m41 135 147 m42multi-facility export zone (MFEZ Zambia) 146multinational corporations 25 141 151 t52

166ndash70 189 219multiparty democracy see democracy

multi-partymunicipal governmentmunicipalities see

governmentMusakanya V 137Mutuacuten (Bolivia) 76 see also iron oreMwanawasa L 140 143

Namibia 122 m41 135 146 m42National Coalition of NGOs inMining (NCOM

Ghana) 169National Confederation of Private Business

Institutions (Confederacioacuten Nacional deInstituciones Empresariales PrivadasCONFIEP Peru) 47

National Democratic Congress (NDC Ghana)155 t51 159ndash60 170ndash2 192 195 n18

National Development Planning Commission(NDPC Ghana) 178

National Exportersrsquo Association (Asociacioacuten deExportadores ADEX Peru) 47

National Federation of Cooperative Miners ofBolivia (Federacioacuten Nacional deCooperativas Mineras de Bolivia BoliviaFENCOMIN)

National Institute for Statistics and Informatics(Instituto Nacional de Estadiacutestica eInformaacutetica INEI) Peru

National Revolutionary Movement(Movimiento Nacionalista RevolucionarioMNR Bolivia) 91

National Society of Mining Oil and Energy(Sociedad Nacional de Mineriacutea Petroacuteleo yEnergiacutea SNMPE Peru) 47 58 69 n2

nationalndashsubnational relations 11 154 180ndash8201 see also autonomy centralizationdecentralization regionalism taxation(distribution of)

National Superintendency of TaxAdministration (Superintendencia Nacional deAdministracioacuten Tributaria SUNAT Peru) 68 n2

Nationalist Party (Peru) 50nationalization 14 42 69 n8 81 88 96 98

101 121 123 127 132 t42 135ndash6 144148 161 t52 164ndash6 202 208 225 n12

denationalization see privatizationNative Administration system (Ghana) 181natural gas 20 74 78 87 96 97ndash102 104

106 112 n21 201 219natural resourceexports see exportsgovernance 2 6 10ndash14 17 18 20ndash1 73

103 105 108 110 117 129 149 153160 176 180 187ndash8 194 197ndash200208ndash9 218ndash24

rents see rentstaxation see royalties taxationwealth 3 5 153 223see also hydrocarbons mining

Natural Resource Governance Institute 21 n2152

NCCM see Nchanga Consolidated CopperMines

Nchanga Consolidated Copper MinesNCCM) 121

NCOM see National Coalition of NGOs inMining

NDC see National Democratic CongressNDPC see National Development Planning

Commissionneoliberalism 63 82ndash3 84 t31 90 93ndash4 96

97ndash9 106 108ndash9 115 n47 125 t41127ndash8 148ndash9 155 t51 160 166 200202ndash3 212 222 224 n10

anti-neoliberal 83 99 144ideas 62neoliberal period (Peru) 27 34ndash7 45ndash56

64ndash5 68Newmont Mining Corporation 10 13 178ndash9

185 196 n34New Patriotic Party (NPP Ghana) 155 t51

159ndash60 169 172 179 192


Index

261

nickel 74Nkrumah K 154 155 t51 156ndash7 165

181ndash2 208Nkumbula H 126Non-Aligned Movement 134non-government organization (NGO) 50 52

54 58 74 100 169 197North D C 17 22 n5 118 187northern Peru 205 207northern regions (Ghana) 173 174 t54Northern Rhodesia 120 124 126 131Northern Territories (Ghana) 156northndashsouth inequalities (Ghana) 164Norway 128North-western Province (Zambia) 122 m41

136 143 146ndash8 205 215NPP new Patriotic PartyNyasaland 120 126 see also Malawi

OAS see Organization of American StatesOASL see Office of Administration of Stool

LandsObuasi (Ghana) 168 m51 185 192Odriacutea M 30 41 69 n4OECD see Organization for Economic

Cooperation and DevelopmentOEFA see Organism for Environmental

Evaluation and FiscalisationOffice for Indigenous Affairs (Direccioacuten de

Asuntos Indigenas Peru) 29Office of Administration of Stool Lands (OASL

Ghana) see stoolsoil 14 17 94 102 104 112 n21 114 n39 153

179 184 198 205 219 225 n14companies 54 87 94ndash6 98 102 179dependence 4ndash5export 4 78labour 99production 78 80 104 112 n25 174reserves 31 80revenues 32 77 95ndash6 106ndash7 115 n52 178

184 206 see also royalties taxation see alsohydrocarbons

oligarchy 27 28ndash31 57 64 80 88 222coastal 30landed 29 31 32oligarchies hypothesis 79 105tin 88

one-party state 119 121 125 t41 127 130135ndash6 138 155 t51 157 225 n11

OPEC see Organization of the PetroleumExporting Countries

open-pit mining see mining (surface)Organic Petroleum Law 1938 (Bolivia) 95Organism for Environmental Evaluation and

Fiscalisation (Organismo de Evaluacioacuten yFiscalizacioacuten Ambiental OEFA) 54 70 n20

Organization for Economic Cooperation andDevelopment (OECD) 58 61

Organization of American States (OAS) 35Organization of the Petroleum Exporting

Countries (OPEC) 31 32 133Orihuela J C 26Oruro (Bolivia) 75 m31 77 m32 104

115 n51Ovando A 96

Pando (Bolivia) 100 101 104paramount ruler (Ghana) 162 163ndash4 187Patintildeo S 85 88 111 nn15 16Patriarchs of Silver (Bolivia) 85Patriotic Front (PF Zambia) 125 t41 128ndash9

130 132 t42 143ndash4 146patronage 5 8 103 106 138ndash9 141 157 179

185 188 211Paz Estenssoro V 88ndash9 113 n28 114 n45peasants (campesinos) 30 63 64 81 88 94

112 n18 133 136 215organizations 31 32 82 100 114 n37

PEMEX (Mexican Petroleums PetroacuteleosMexicanos) 95

Peres Cajiacuteas J 79 86 110Peruvian Corporation 29Petrobras 13 98 100ndash1Petroleum Revenue Management Act

(PRMA Ghana) 178Picasso (mining company) 41Pipelines 101 112 n21 221place 11 13 218 see also displacement land

territory property rightsPMSP seeMining Programme in Solidarity with

the PeoplePNDC see Provisional National Defense

Councilpoliticspolitical

appointment 137 160competition 8 35 45 118ndash19 131 138

142 210drivers 2 4 10 16 109opposition 29 30ndash1 34ndash5 69 nn5 6

119 125 t41 126ndash9 132 t42136 138ndash43 146 148 157 171ndash2176 178 188 192

parties 8 19 28ndash9 32 35 36 48 57 62ndash366ndash7 71 n32 76 81ndash3 89 108 117118ndash19 129ndash30 136 139 142 149 156160 177 179ndash80 192 193 208 210212ndash13

politicization 5 148projects 8 13 100 102 128 129 211 220stability 27 184see also democracy elections

political economy 4 17 18 108ndash9 118 144188 219


Index

262

political settlementsas basis for project 6 17 64 73ndash4 103 117

118ndash19 153 193 199ndash200changes in 8ndash10contributions to theory of 108ndash10 194

210ndash18 223ndash4definition 7ndash8 71ndash2history of in Bolivia 78ndash85history of in Ghana 154ndash60 189ndash93history of in Peru 28ndash37history of in Zambia 124ndash31natural resource governance and 10ndash14

64ndash5 105ndash8 148ndash9 218ndash22as stable orders 7ndash8

pollution see contaminationPopular Action (Accioacuten Popular AP Peru)

30 33populism resource see resource populismpost-colonial period 18 121 126 129ndash30 131

133 136 161 180 185 195 n26 200ndash1220 see also decolonization independence

Poteete A 6 128 153Potosiacute (Bolivia) 74 75m31 77 m32 90 92ndash3

104 113 nn27 28 32 114 n33 115 n51poverty 25 32 34 52 63 67 119 208

extreme 60ndash1 173ndash4rate 60ndash1 71 n30 116 150 t43 173ndash6reduction 1 3 25 60ndash1 67 140 152 154166 173ndash6 189 201 213 214

see also inequalitypower

economic 28 30 47 93 105 111 n16holding 8 10 11 18 27 29 59 64 66 94

97 103 105 109 114 n37 201 206ndash7221ndash2 225 n15

political 4 8 10 31 35 39 47 91 93 98101 105 106 109ndash10 146 164 186 193211ndash12

sharing 99 155 t51 156ndash7Prado M 41Precious Minerals Marketing Corporation Law

1989 (PNDC Law 219 Ghana) 167pre-colonial period 74 110ndash11 nn4 5 154

161ndash2 183 187 see also colonialismprior consultation see free prior and informed

consent (FPIC)privatization 34ndash5 38 44 45ndash8 87 98ndash9 113

n28 116 123 127 139ndash41 144 148 166169 202 see also neoliberalism structuraladjustment Water War

PRMA see Petroleum Revenue ManagementAct

PRODUCE see Ministry of Productionproperty rights 38 52 63 79 163 207 see also

dispossession land place territoryprotectionism 41 141 165protest see social movement

Provisional National Defense Council (PNDCGhana) 155 t51 158ndash9 166ndash7169 182

Puno (Peru) 40 43 m21 44 51 m23 53 f2771 n30

Putzel J 7 118 194

Quechua 55 69 n3 74Quellaveco (mine) 42 44Quiroga Santa Cruz M 96

race 7 78 205 218racism 22 76Rawlings J 155 t51 158ndash9 182 194 n5RCM see Roan Consolidated Copper Minesregionalism 94ndash103Registry of Artisanal Miners (Peru) 47rents 2 13ndash14 16 36 57 73 79 87 93 94

103 106 140ndash1 149 t43 176 184ndash5187ndash8 193 212ndash13 217ndash20 223

rent seeking 57 99 118 141see also taxation

repression 9 32 48 82 89 112 n24 138REPSOL-YPF 98resistance see social movementresource curse 3ndash6 24 66 119 153 210resource dependence 3 217Resource Governance Index 152ndash3resource nationalism 14 74 81 97 125 t41

132 t42 146 148 161 t52 170ndash6 203204 207ndash10

resource populism 207 221resource sovereignty 5 41 78 92 96 101

164ndash5 184 200 208revenue distribution see taxationRevolutionary Government of the Armed

Forces (Gobierno Revolucionario de la FuerzasArmadas GRFA Peru) 31 32 42 64 208

Rhodes C 119Rhodesia Railways 121Roan Antelope Mining Corporation of

Zambia 139Roan Consolidated Copper Mines (RCM) 121Robinson J 5ndash6 22 n5 26 105 198Ross M 3ndash6 26 198royalties 53 f26 27 91ndash2 94ndash5 106

115 n52 128 131 132 t42 143 146162 170 172ndash3 176 178 182ndash4185ndash8 190 191 195 n25 206 213see also taxation

SADA see Savannah Accelerated DevelopmentAuthority

Salisbury 120 131San Bartolomeacute (mine) 92Sanborn C 68 70 n15 204Saacutenchez Cerro L 29


Index

263

Saacutenchez de Lozada G 83 90 97ndash9 114 n45115 n47 133 nn28 29

San Cristobal (mine) 92Santa Cruz (Bolivia) 75 m31 76 77 m32 82

92 95ndash6 99ndash101 102 104ndash6 113 n28114 n41 205

Sata M 129 143Savannah Accelerated Development Authority

(SADA) 174Sawyer A 179Second Republic Ghana 155 t51 159Second Republic Zambia 121 127Sen K 220Sendero Luminoso seeCommunist Party of Perundash

Shining PathSGMC see State Gold Mining CorporationShining Path see Communist Party of

PerundashShining Pathsilver 14 29 37 74 80 85 92 201 219 223Slater D 26slave trade 163Small-Scale Gold Mining Law1989 (PNDC Law

218 Ghana) 167SNMPE see National Society of Mining Oil

and Energysocial conflict 1 28 32 36 50 56 f28 65

66ndash8 92 96 107 209 221 see also socialmovementsmobilizations

Social Emergency Fund Bolivia 94social inclusion 32 97 102 106 200 213

214 218social movementsmobilization 6 9 10 12

20 26ndash8 34 44 54 55 58 59 62 64 7683 84 t31 93 96ndash7 107 109 112 n18113 n28 114 n37 131 t42 142 149 158167 180 198 206ndash7 208 210 215221 223

indigenous see indigenous peopleslabour see labourleaders 20 34nationalist 41 97ndash102 124 126 130

132 t42 156 184transnational 25 50 58 see also

transnationalsee also indigenous peoples Movement to

Socialism MAS social conflictsocial order 7 11 27 162 186 193 212social policy 27 67 201social protection 15 94 102 213 219 see also

cash transfer programmessocialism 34 83 127 155 t51

Movement to Socialism (MAS Bolivia) seeMovement to Socialism Socialist Party(Peru) 30

Soifer H 26 203Solwezi District (Zambia) 122 m41 146

147 m42 151 n4

South Africa 120 124 126 151 153 163194 n2

Southern Peru Copper Corporation(SPCC) 41ndash2 69 n8

Southern Rhodesia 120 124 126 131 134see also Zimbabwe

sovereignty see resource sovereigntySpain 14 23 28 38 74 80 98 110 n4

114 n33SPCC see Southern Peru Copper Corporationstability agreements 178ndash9Standard Oil 87 94ndash5 102 115 n52state 18ndash19

building 27 64 104 153capacity 25ndash6 44 57 65 132 t42capitalism 144 200 202ndash3 see also

capitalismdevelopmental 8 83 144 148 201 211state-owned enterprisesextraction 4ndash5

35 37 38 42ndash5 83 84 t31 91ndash2 106121[-]2 144 161 t52 165 202ndash3 204208 214 see also nationalization

see also national-subnational relationsterritory violence

State Gold Mining Corporation (SGMCGhana) 165 202ndash3

State House Zambia 139 143Statist period (Peru) 27 31ndash4 64ndash5stools stool lands (Ghana) 12 161ndash2 163

165 181 185ndash7 206 224 n7 see also landOffice of Administration of Stool Lands

(OASL) 70n17 182 183 f55 187 224 n7structural adjustment 34 74 82 113 n28

123 138 158 166ndash70 216 see alsoneoliberalism privatization

Sucre (Bolivia) 75 m31 77 m32 80 85111 n14

suffrage see electionsSumitomo mining company 92SUNAT see National Superintendency of Tax

Administrationsurface mining see miningsymbolism of subsoil resources 219 221

Tacna (Peru) 41 43 m21 49 m22 51 m2353 f27 70 n19

Tanzania 122 m41 124 134 147 m42 169Tarija (Bolivia) 74 75 m31 76 77 m32 94

96 99ndash101 102 104 106 114 n41 205Tawkwa (Ghana) 190taxation 25 28 64 124 125 t41 131 141

144 208 220base 60ndash1distribution of 2 12 50ndash4 84 t31 96ndash7

101 104 107 153ndash4 161 t52 171ndash6 183193ndash4 206ndash7 209 213

incentives see incentives


Index

264

income 182institutions 14 68 n2 182policy 38 117 162rates 41 42 45 86ndash7 98 100ndash1 128 131

t42 169 170 178reform 123 140 143 170ndash4revenues 37 40 f24 48 60 71 n27 78 86

92 94 107 115 n51 149 152 171 173t53 179

royaltyvalue-added 60 91 178variable profitwindfall 52 143 149 169 170 172 195

n14 201see also mining canon rents

TAZARA Railway 134technocratstechnopols 7 10 26 28 31 33

35 36 45 55 57 60 62 65 66ndash8 96 109137 158 191 207ndash10

Territorio Indiacutegena y Parque NacionalIsiboro-Seacutecure (TIPNIS) 89ndash90 112 n26

territory 33 56 79 96 103 107 110 156ndash7162 198 205ndash6 207 220

claims 17indigenous 28 57 74 76 89ndash90 99 100

109 112 n26 215mininghydrocarbons 46 f25 48 70 n14

78 80national 23 28ndash9 79 87 112 n19territorial project 10ndash13

Thelen K 2The Post (newspaper Zambia) 128Third Republic Ghana 155 t51 158Third Republic Zambia 139Thorp R 22 40ndash1tin 14 74 84 t31 85ndash9 96 109ndash110

barons elites 80ndash1boom 115 n51economy 81 108 111 n16 112 n25 201 223market collapse 78 106

Tito see Broz JToledo Manrique A 36 52 62Toquepala (mine) 41 42Toranzo Roca C 94Toro D 81traditional authorities 14 124 159 162

163ndash4 165 169ndash70 180ndash1 183 f55185ndash8 191 193 196 n33 206 212see also chieftaincies stools

transnationalactivists 27 109 215actors (general) 6 9ndash10 13 16 17 21ndash2n3

24ndash8 58ndash9 108ndash9 113 n28 132 t42153ndash4 169 171 199 200ndash4 218ndash20222 223

capital 46companies 5 31 46ndash7 65 74 92 97ndash9 189

ideas 16 169 171resources 7 26see also international financial institution

(IFI)transparency 2 31 52ndash4 55 58 153 188 see

also Extractive Industries TransparencyInitiative (EITI)

Tsikata F S 164 165 169Tullow Oil 179

UDI see Unilateral Declaration ofIndependence

underground mining see miningUlloa M 44Unciacutea massacre 86Unified Confederation of Unionized Peasant

Workers of Bolivia (Confederacioacuten SindicalUacutenica de Trabajadores Campesinos deBolivia (CSUTCB)) 111 n10

Unilateral Declaration of Independence (UDIRhodesia) 121 134

Union Federation of Bolivian Mine Workers(Federacioacuten Sindical de TrabajadoresMineros de Bolivia FSTMB) 88ndash9 91ndash3113 n31

unions see labourUNIP see United National Independence PartyUnited Kingdom 28ndash9 111 n12 119ndash21 124

131 132 t42 154 155ndash7 180 181195 n24 203

British mining companies 161 t52 164 seealso British South Africa Company (BSAC)

Department for International Development(DfID) 18

United Left (Peru) 34United National Independence Party

(UNIP Zambia) 120 125 t41 126 127130 136ndash8 139ndash40 144 208

United Nations 121 134 200United Party for National Development

(UPND Zambia) 129 140 142United Progressive Party (UPP Zambia)

126 128United States of America 13 29 31 33 39ndash42

50 54 55 57 58 64 87 88 92 95 96225 n12

Agency for International Development(USAID) development assistance 35 87112 n23

imperialism 30 109UPND see United Party for National

Developmenturbanndashrural divide 61 128 140 166 174USAID see United States of America

Vargas Llosa M 34Velasco Alvarado J 31ndash2 52


Index

265

violence 5 9 15 23 27 34 35 67 70 n21 7689 92 111 n12 129 135 197 198 202220 223

state 66 112 n24 113 n26vulnerable authoritarianism see authoritarianism

Walton M 8 210 214War of the Pacific 29 37 87Watchtower Church 126Water War (Bolivia) 99Watts M 5ndash6Weenhayek peoples 215Western region (Ghana) 184 188 190 205Whitehead L 73Whitfield L 156ndash60 176ndash7 181windfall tax see taxationwolfram 74World Bank 21 n2 34ndash5 47 48 55 58 61

123 132 t42 138 140 144 152 158ndash9166 169 171 179 202

World War I 111 156World War II 85 87ndash8

Yanacocha (mine) 13YPFB see Bolivian National OilfieldsYugoslavia 133 134 135

Zaire see Democratic Republic of the CongoZambia Congress of Trade Unions (ZCTU) 123Zambia Consolidated Copper Mines (ZCCM)

121 123 132 t42 136ndash7 139 144 145t42 203

Zambia Industrial and MiningCorporation (ZIMCO) 121 123 132 t42

ZCCM see Zambia Consolidated Copper MinesZCTU see Zambia Congress of Trade UnionsZimbabwe 120 122 m41 142 147 m42ZIMCO see Zambia Industrial and Mining

CorporationZinc 37 40ndash1 74 92


Index

266

Cover

Governing Extractive Industries Politics Histories Ideas

Copyright



Table of Contents

List of Figures

List of Maps

List of Tables


1 Resource Extraction and Inclusive Development Extending the Bases of the Political Settlements Approach


11 The lsquoResource Cursersquo and the Politics of Extractive Industry Governance





16 Summary




3 Outline of Book

Endnotes

2 Mining Political Settlements and Inclusive Development in Peru

1 How Politics Shapes Development A Conceptual Discussion with Reference to Peru





231 FIRST STAGE NEOLIBERALISM AND COMPETITIVE AUTHORITARIANISM

232 SECOND STAGE NEOLIBERALISM DEMOCRACY AND DECENTRALIZATION





331 FIRST STAGE PRIVATIZATION AND EXPANSION IN THE 1990S

332 SECOND STAGE CONTINUITY AND CHANGE IN MINING GOVERNANCE IN THE TWENTY-FIRST CENTURY

3321 Taxation and revenue redistribution and transparency

3322 Environmental regulation

3323 Implementing ILO 169 and the right to prior consultation

4 Politics Extractive Governance and Development in the Twenty-First Century







Acknowledgements

Endnotes

3 Political Settlements Natural Resource Extraction and Inclusion in Bolivia

1 Resource Extraction and Political Settlements in Bolivia an Overview


2 A Brief Periodization of Boliviarsquos Political Settlement and Instability

21 Continuities and Instabilities among Elites and Extractivist Institutions


221 1899ndash1935

222 1936ndash52

223 1953ndash84

224 1985ndash2002

225 2003ndash18

3 Mining and Politics The Long Journey from Oligarchs to Cooperatives

31 From Oligarchic Private Mining to the Unravelling of Resource Nationalist Mining

32 Emergence of Cooperativism and the Return of Large-Scale Private Mining

33 Summary



42 Resource Regionalism Social Movement Nationalism and the Governance of Natural Gas

43 Summary

5 Conclusions Resource Governance Region and Political Settlements in the Longue Dureacutee




Acknowledgements

Endnotes

4 The Politics of Natural Resource Extraction in Zambia




31 1896ndash1924

32 1924ndash64

33 1964ndash73

34 1973ndash91

35 1991ndashPresent


4 Political Settlements the State and Extractive Industry Governance

41 1924ndash64

42 1964ndash73

43 1973ndash91

44 1991ndashPresent

5 Conclusion

Acknowledgements

Notes

5 Competitive Clientelism and the Political Economy of Mining in Ghana


11 Decolonization and the Emergence of Competitive Clientelism in Post-Colonial Ghana 1874ndash1965




2 Political Settlements and Mining Governance over the Longue Dureacutee


22 Colonial Capitalism and the Subtle Decline in Chiefly Powers 1874ndash1956

23 Post-independence Reforms and the Nationalization of Mines 1957ndash85

24 Structural Adjustment and the Rise of Multinational Corporations 1986ndash2008



4 The Politics of CentralndashLocal Relations in Ghanarsquos Mining Governance

41 Chiefs Politicians and the Land Question from the Late Nineteenth Century to the Present


421 IDEAS INTERESTS AND THE CENTRALIZATION OF MINING RENTS

422 MISAPPLICATION OF ROYALTIES BY SUBNATIONAL AUTHORITIES




6 Conclusions

Endnotes

6 Conclusions Interpreting the Politics of Natural Resource Extraction


2 Transnational Factors in the Politics of Natural Resource Extraction


22 Global Commodity Prices and Domestic Political and Economic Dynamics



3 Materiality Ideas and the Politics of Extractive Industry Governance

31 Materiality


4 Political Settlements Extractive Industry and Inclusive Development

41 Competitive Clientelism Economic Transformation and Modes of Inclusion


43 Horizontal and Vertical Power Relations and Piecemeal Institutional Reform



5 A Long-Term Natural Resource Governance Lens on Political Settlements

6 Final Words

Endnotes

References

Index






1































viii





October 2017



ix


Table of Contents











List of Figures



















List of Maps











List of Tables





















AU African Union



































GH Ghana











xx










IVA value added tax























xxi

































xxii










VAT value added tax

WB World Bank

WWII World War II







xxiii



1











2








3






4





5






6







7







8







9







10







11






12






13






14






15


16 Summary





16








17







18






19


3 Outline of Book




20




Endnotes






21











22

2















24








25






26






27









28








29







30








31







32







33








34







35







36









37



050

1890

1900

1910

1920

1930

1940

1950

1960

1970

1980

1990

2000

2010

100

150

200

250

300

350

400

450




38




062

545416416

496 629629

753 852 914

105105

845645 595 582

239 328

12801280 12961296

627627 515654

092376

715715


251 426426

1548

ndash500

000

500

1000

1500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015


416629 105

1280 1296

627 715

426

ndash223ndash223


0

10

20

30

40

50

60

70

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

0

5000

10000

15000

20000

25000

30000

Mill

ion

US$





39




0

5

10

15

20

25

30

0

10000

20000

30000

40000

50000

60000

70000

80000

90000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

Mill

ion

s n

uevo

s so

les





40








41









42

ECUADORCOLOMBIA

N

BRAZIL

LIMA

AyacuchoAyacucho

Cusco

Puno

Arequipa

Trujillo

CajamarcaCajamarca

Piura

Pacific Ocean

SOUTHAMERICA

Peru



Departments

0 200 km CHILE

Tacna

BOLIVIA

Cajamarca

Ayacucho




43







44








45



0

2

4

6

8

10

12

14

16

18

20

0

5000

10000

15000

20000

25000

30000

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016





46







47







48

ECUADORCOLOMBIA

BRAZIL

LIMA

Trujillo

Pacific Ocean

SOUTHAMERICA

Peru

CHILETacna

Operation licenses


BOLIVIA

0 200 km

N




49







50

ECUADORCOLOMBIA

N

BRAZIL

LIMA

Cusco

Puno

Arequipa

Trujillo

Piura

Pacific Ocean

SOUTHAMERICA

PeruDepartments

lllegal miningSelva

0 200 km CHILE

Tacna

BOLIVIA




51







52


0

1000

2000

3000

4000

5000

6000

7000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Mill

ion

s n

uevo

s so

les


0100020003000400050006000700080009000

10000

AN

CA

SH A

REQ

UIP

A T

AC

NA

CA

JAM

ARC

A L

A L

IBER

TAD

MO

QU

EGU

A P

UN

O P

ASC

O C

USC

O I

CA

LIM

A J

UN

IN A

YAC

UC

HO

HU

AN

CA

VEL

ICA

APU

RIM

AC

HU

AN

UC

O P

IURA

MA

DRE

DE

DIO

S A

MA

ZO

NA

S L

AM

BAYE

QU

E S

AN

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RTIN

LO

RETO

UC

AYA

LI T

UM

BES

CA

LLA

O

Mill

ion

s o

f n

uevo

s so

les




53








54






55






0

10

20

30

40

50

60

70

80

0

50

100

150

200

250

300

350

400

450

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016






56









57









58








59








60








61







62







63








64









65






66






67



Acknowledgements


Endnotes





68














69














70












71

3















73









74


SOUTHAMERICA

Bolivia


Cobija

PERU

LA PAZ

CHILE

ARGENTINA

PARAGUAYTarija

Oruro

Cochabamba

0 250 km

Trinidad


Sucre

Potosiacute

N

Departments




75






76


SOUTHAMERICA

Bolivia



BRAZIL

Cobija

PERU

LA PAZ

CHILE

ARGENTINA

PARAGUAYTarija

OruroOruro


0 250 km

Trinidad


Sucre

Potosiacute

N

Departments

Cochabamba

Oruro




77










78






79










80







81







82






83














Employment in mines







OUPCORRECTED

PROOFndashFIN

AL2252018

SPi










85








86








87







88






89








90







91






92


33 Summary





93








94






95







96







97







98






99







100







101


43 Summary






102









103








104










105





106






107








108







109



Acknowledgements



Endnotes







110
















111













112










113

















114












115

4













117







118








119








120







121

AFRICA

Zambia


ANGOLA

Mongu LUSAKA

ZIMBABWE


MOZAMBIQUE


12

0 100 kmNAMIBIA

Livingstone

Kabwe

Chipata

MALAWI

Kasama

MansaLumwana

Kansanshi

Solwezi

1 2


Luanshya

NdolaMufulira


Kalumbila

TANZANIAN

Chililabombwe

Chingola


OUPCORRECTED

PROOFndashFIN

AL2152018

SPi







123




31 1896ndash1924


32 1924ndash64




124











Favourable Positive



Favourable Positive











OUPCORRECTED

PROOFndashFIN

AL2152018

SPi



33 1964ndash73




126


34 1973ndash91




35 1991ndashPresent




127










128








129








130




41 1924ndash64






131



maximum price)(US$)














Trades unions


Trades unions














OUPCORRECTED

PROOFndashFIN

AL2152018

SPi



42 1964ndash73




133






134

43 1973ndash91




0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

ndash10

ndash5

0

5

10

15

20

US$

to

nn

e

An

nua

l






135






136









137



44 1991ndashPresent




138







139







140







141






142





143







144





Glencore PLC

Barrick Gold


amp Vale (SA)

Enya Holdings

ZCCM

1969ndash2000


1920s to 1969 2016


China Non-Ferrous

Metals Company


Roan Copper Mines

1969ndash1982

1969ndash1982




145







146

AFRICA

Zambia


ANGOLA

Mongu

ZIMBABWE

MOZAMBIQUE

Province boundary




Chipata

MALAWI

Kasama

Mansa

Solwezi

1Ndola

TANZANIAN


OUPCORRECTED

PROOFndashFIN

AL2152018

SPi



5 Conclusion





148





149


Indicator Period







OUPCORRECTED

PROOFndashFIN

AL2152018

SPi

Acknowledgements


Notes







151

5












153









154


Timeperiod











Liberal



ndash



Military (only)



Military ndash




ndash












OUPCORRECTED

PROOFndashFIN

AL2552018

SPi





156









157







158








159








160










Employment in mines





Employment in mines







161







162








163








164







165








166





0

500000

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

1000000

1500000

2000000

2500000

3000000






167


Tamale

Akyem MiningProject

Kumasi

Obuasi

Tarkwa ACCRA

AFRICA

Ghana

LakeVolta


Cape Coast

IVORYCOAST

TOGO

Regional boundary

Mining licences



0 100 km




168







169








170




0

200

400

600

800

1000

1200

1400

1600

1800

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

US$

tro

y o

unce




171






172







Miningto totalGRA

2005 2149372 23595 2698896 19405894 72285749 11212006 2244680 31625 4043618 21652578 74822760 10202007 2486821 40882 47415690 34587597 123021866 14422008 2585993 59005 73554697 47139242 179978383 15322009 2930328 90416 124600880 103061985 319022676 18212010 2970080 144697 241578780 132469710 519682174 21292011 2924385 222024 649902536 161822107 1034221712 27612012 3166483 359392853 893773828 207495934 1461202977 27042013 3192648 364673038 518545259 220131571 1104047315 18712014 3167755 470356949 441235059 259459815 1172117330 15382015 2848574 485632657 463128598 404743477 1354379971 1490




173






200506 201213 200506 201213


Ghana 319 242 165 84




174


0

10

20

30

40

50

60

2010 2012 2014 2016

GH

C| m

illio

ns


034

035

036

037

038

039

04

041

042

043

0

10

20

30

40

50

60

19912 19989 200506 201213

Gin

i co

effi

cien

t

Pove

rty

inci

den

ce (

)





175








176










177






178







179









180







181







182












10

225

18

495

80

10


9

DistrictAssemblies







183







184








185








186









187






188






11 11

15 1518

23

27

3436 36

0

5

10

15

20

25

30

35

40

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

g

old

pro

duc

tio

n




189







190








191






192



6 Conclusions





193


Endnotes













194





















195






196

6

Conclusions












198







199








200








201








202







203







204


31 Materiality






205






206








207








208






209








210







211










212






213









214







215







216







217







218







219






220






221






222

6 Final Words







223


Endnotes












224







225


References


































References

228




















References

229



















References

230



















References

231




















References

232




















References

233





















References

234




















References

235





















References

236



















References

237



















References

238




















References

239






















References

240



















References

241





















References

242




















References

243


















References

244


















References

245



















References

246



















References

247






















References

248


















References

249






















References

250





















References

251











References

252

Index





116 120 121 124 126 131 133 137139 149 156 166 197 217



Amanor K 180 181Amazon 34 42 44 47 50 55 57 69 n3
















208Ayee J 152 176 179Aymara 55 69 n3 74








76 77 m32 89 96 98 100ndash1 109112 n20 114 n42 224 n2












114 n39



66 71 n29 75 m31 77 m32 98 99 111n12 112 nn20 21 133 203


















Index

254







179 180ndash1 187 191tax 141water 99










mine 12 42 44 47 136 145 f42prices 42 115 123 127 128 133 135 137






111 n14 123 127 138 154 155 t51157ndash8 181




55 62 66 73 89 97 104 114 n45 115n53 141 203












Index

255






















153 182 222commitment 26 61 68 128 153


105 130 138 158 159 176 178 184186ndash8 191 193 198 205 212 216 221




103 106ndash7 114 n33 133 139 158 161t52 162 165 167 188 202 205 214












Index

256
















Fujimori K 52










111 n161970s 32 44 115 123 1271980s 942000s 144ndash5 170








n32 97ndash8 101 105 107 114 n44 115n53 134 165 215 216






Index

257





94 97 103 105 109 114 n37 201 206ndash7222 225 n15



106ndash7 111 n12 112 n26 178 202 209213 218 220ndash1 225 n14














166 209political 5 26 59 60 62 63 66 108

118ndash19 128 130 160 176 187193 212











41 42 57 65 92 100 106 107116 118






infrastructure 29 34 66 86 104 120 126134 135 146 164 166





Index

258













Japan 36 50 92




Korean War 120


Labour 76 81 91 107 121 140 148 164188 206 216







85ndash6 88 94 96 98 104 106 110 n3111 n14 113 n28 115 n51












Index

259


148 215









military 34ndash5 36 44 50 62 65 80 82 92 99127 194 n5









185 192


communities 148 153 167 172 183 184188 195 nn18 25 209



109 113 nn27 29 31 114 nn32 33 3436 216

exploration 45 46 49m22 55 70 107 114n34 119 146 m42 218



licenses 49 m22 75 m31 147 m42 167168 m51 178 216





miningsurface 41 64 132 t42 143 146 167

205 207underground 41 74 132 t42 167 205 207










Index

260



























101 121 123 127 132 t42 135ndash6 144148 161 t52 164ndash6 202 208 225 n12















159ndash60 169 172 179 192


Index

261





















115 n51Ovando A 96


















Index

262









104 113 nn27 28 32 114 n33 115 n51poverty 25 32 34 52 63 67 119 208




97 103 105 109 114 n37 201 206ndash7221ndash2 225 n15











Puno (Peru) 40 43 m21 44 51 m23 53 f2771 n30

Putzel J 7 118 194






132 t42 146 148 161 t52 170ndash6 203204 207ndash10










Index

263





















147 m42 151 n4

South Africa 120 124 126 151 153 163194 n2

















Tacna (Peru) 41 43 m21 49 m22 51 m2353 f27 70 n19







Index

264



92 94 107 115 n51 149 152 171 173t53 179




35 36 45 55 57 60 62 65 66ndash8 96 109137 158 191 207ndash10























131 132 t42 154 155ndash7 180 181195 n24 203








50 54 55 57 58 64 87 88 92 95 96225 n12






Index

265

violence 5 9 15 23 27 34 35 67 70 n21 7689 92 111 n12 129 135 197 198 202220 223



123 132 t42 138 140 144 152 158ndash9166 169 171 179 202




121 123 132 t42 136ndash7 139 144 145t42 203





Index

266

Cover


Copyright



Table of Contents

List of Figures

List of Maps

List of Tables









16 Summary




3 Outline of Book

Endnotes

























Acknowledgements

Endnotes







221 1899ndash1935

222 1936ndash52

223 1953ndash84

224 1985ndash2002

225 2003ndash18




33 Summary




43 Summary





Acknowledgements

Endnotes





31 1896ndash1924

32 1924ndash64

33 1964ndash73

34 1973ndash91

35 1991ndashPresent



41 1924ndash64

42 1964ndash73

43 1973ndash91

44 1991ndashPresent

5 Conclusion

Acknowledgements

Notes






















6 Conclusions

Endnotes









31 Materiality









6 Final Words

Endnotes

References

Index

governing extractive industries

Documents