Validating policy prescription from benefit-cost assessments of mining through comparative analysis and test of hypotheses

Abstract

The paper proposes that benefit-cost analyses of mining be validated by comparative analyses and tests of hypotheses. Mining and nonmining communities can be compared to assess the contribution of mining to development. Further, tests of hypotheses can be used to determine whether mining communities are significantly different from nonmining communities in terms of poverty rates, health indicators, education, and other social indicators. Applying the said techniques in Benguet, Northern Philippines, the author found that mining communities, despite several years of mining operations, are not significantly different from nonmining communities. Data also suggest that in communities where corporate mining operates as in Benguet, poverty incidence is higher—not lower. This implies that we need to review the Philippine government’s policy of promoting mining as an engine of economic growth. The paper proposes that we explore economic strategies that enhance environmental protection at the same time.

JEL classification: O47