Local politics, conflict and development in Peruvian mining regions

This thesis examines the effects of a collection of policies that determine the mandatory distribution of mining, gas and oil revenues between national and subnational governments, and the greater involvement of mining companies in local development. I have labelled this set of policies, which aims to reduce social conflict and promote local development, the New Extractive Industry Strategy (NEIS). Chapter 1 describes the implementation of these policies in Peru and highlights their significance to the mining industry worldwide. Chapter 2 describes the methodology of the thesis and introduces the three field research regions. Chapter 3 outlines the national socio-political context for the implementation of the NEIS. Chapters 4–6 deal with the effects of the NEIS on social conflict. I argue that the implementation of the NEIS has not only failed to reduce conflict but has actually exacerbated it. After reviewing the debates linking extraction and conflict (Chapter 4), Chapter 5 demonstrates that conflict is strongly associated with the volume of mining revenue received by sub-national governments. Chapter 6 presents a typology of conflicts that helps to explain the correlation between mining revenue and unrest. In addition to well-known conflicts that are related to the adverse impact of mining on livelihoods and the environment, the study identifies two other types. In the first, peasant communities employ social conflict to increase their bargaining power with the mining companies for material compensation. In the second, the large volume of mining revenue generates disputes over access to or use of these financial transfers. Chapters 7–8 show that the NEIS has not delivered its development promises. Chapter 7 illustrates how regional and municipal governments in receipt of high per capita volumes of mining revenue transfers did not improve their economic and welfare indicators any more than the rest of the country. Chapter 8 proposes that a combination of obstructive political factors trapped regional and municipal authorities and local populations in a myopic political game that prioritised quick short-term spending over any long-term benefits to be gained from better planned expenditure. Finally, Chapter 9 draws some conclusions and makes some suggestions.