For those of you who have not, start reading Chris Blattman’s blog. It is the best blog on development economics (and a whole lot more).
Five minutes ago I started to procrastinate. As I do, I turned to his blog and found this post. Its title is exactly what I just told a Colombian reporter when asked what the government should do to ease local dislocations created by large-scale mining!
My answer? Give people cash.
What is nice about Chris’s work is that he has experimental evidence that giving poor people cash works to improve their earnings potential, and not just their current earnings. In an experiment, the Ugandan government gave randomly-selected young people a no-strings-attached grant of $400; roughly the average annual income. And what happened?
“Most start new skilled trades like metalworking or tailoring. They increase their employment hours about 17%. Those new hours are spent in high-return activities, and so earnings rise nearly 50%, especially women’s.”
So there you have it. Want to help mitigate the adverse effects of mining on poor people? Give them cash.