Neither a Curse, nor a Blessing: Mining and Local Economic Development in Peru

Several reforms implemented in Peru during the ’90s aimed to create an attractive environment for private investors. Several privileges were offered to investors, and institutional restrictions regarding mining exploitation were relaxed. At the same time, the state withdrew from its developmental tasks, creating a void that the private sector started to fill. In a period of economic and political distortions, the mining sector started to bloom and expand, becoming crucial to the country’s macroeconomic performance. Its contribution to local development, however, remains contested. The predominance of a laissez-faire mining framework and an absence of mediators between firms and the population have created several liabilities that undermine the development opportunities generated by the sector. At the same time, the absence of an institutional framework supporting the local economy has limited the capacity to absorb and endogenize the spillover effects of mining. It is in the relationship between mining and local economic development that this research situates its focus of interest, trying to understand the extent to which the mining presence contributes to the emergence of local economic development processes and under which conditions.