The Explosive Combination of Inefficient Local Bureaucracies and Mining Production: Evidence from Localized Societal Protests in Peru

Abstract Although numerous scholars have analyzed the effects of natural resource extraction at the national level, few have explored it systematically at the local level. Focusing on Peru, where both mining production and local social protests have greatly increased in recent years and where a new tax has required mining companies to transfer revenue to subnational governments, this study explores the resource curse at the local level. In particular, why do protests arise mostly in the areas of natural resource extraction? Employing subnational data for Peru for the period 2004–9 and LAPOP survey data from 2010, the research confirms previous findings that social conflict is provoked by both the negative externalities of mining and the revenues from the new tax. The article further demonstrates that local bureaucratic capacity is a significant independent variable. Greater subnational bureaucratic capacity can ameliorate the pernicious societal effects of a local resource curse.