Use and Management of Revenues from Indigenous - Mining Company Agreements: Theoretical Perspectives

Abstract

Literature on the relationship between mining revenues and economic and social development can be roughly divided into two categories: theories that indicate that mining revenues are inherently unsuitable for securing indigenous development and theories that argue that the impact of mining revenues is influenced by contextual factors. Relevant contextual factors include the distinctive cultural and social features of various indigenous groups, the culture of mining companies, and the policy and institutional framework within which mining revenues are distributed. These theories provide guidance for empirical analyses of indigenous management of mining revenues. For example, a comparative analysis of indigenous communities in various policy environments may provide insight into effective institutional and policy frameworks for managing indigenous mining revenues. This should be coupled with research into the role of political leadership and policy making processes in developing these frameworks, matters generally ignored in the literature. Similarly, research into the impact of various indigenous cultures on fiscal management can inform consideration of indigenous governance mechanisms which can effectively manage mining revenues. It can also highlight the fact that what constitutes ‘institutional quality’ is subject to cultural interpretation. Importantly however, we may need to move beyond the current theoretical frameworks which posit mining revenues as either ‘shaping’ or being ‘shaped by’ indigenous culture, and instead recognise the dynamic interrelationship between these two variables.