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Photo: Bloomberg
Photo: Bloomberg

Criminal leaders rise during mining booms

  • A new study from India links the rise in mineral prices to the electoral success of politicians with violent crime records

The mining sector in India has earned a bad name for itself due to its frequent links with corruption and crime. Bribes are often given away for licences and approvals, and whistleblowers risk violence. A new study has found that a boom in the mining sector can even be linked to electoral gains for criminal politicians.

In their study, Sam Asher of Johns Hopkins University and Paul Novosad of Dartmouth College use election affidavits of candidates contesting polls in 948 legislative constituencies during 2003-2017. In these affidavits, candidates are required to declare all criminal charges they face.

Also read: Why your health plan premium is suddenly spiking

The two economists then look at the effect of global price shocks of minerals found in these constituencies on the election outcomes.

They find that a rise in the prices makes politicians with criminal charges win more elections. The outcomes are even more favourable for those with violent crimes.

The paper does not provide any empirical evidence on why this happens. But the authors argue that criminal politicians may have an upper hand in being the local fixers compared to their non-criminal rivals. Such politicians could facilitate illegal activities such as enforcing illegal mining, flouting environmental laws, or intimidating journalists and activists—all of which is commonplace in the mining industry.

The rise in prices also has an impact on the wealth of elected politicians. A doubling of local mineral wealth leads to a 25% increase in the wealth of incumbents. Politicians in office also accumulate new crimes during the period of boom. This increase in wealth and crime is limited to politicians in power, not their unelected counterparts.

As the transactions between mining firms and politicians are often hidden, improving transparency on these would be a step forward. Satellite imagery to detect the legal boundaries of open-cast mines could allow citizens and civil society to monitor corruption in mining, the authors suggest.

Also read: Rent-Seeking and Criminal Politicians: Evidence from Mining Booms

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