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Journal cover: Indian Growth and Development Review

Indian Growth and Development Review

ISSN: 1753-8254

Online from: 2008

Subject Area: Economics

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Mine over matter? Health, wealth and forests in a mining area of Orissa

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Title:Mine over matter? Health, wealth and forests in a mining area of Orissa
Author(s):Subhrendu Pattanayak, (Duke University, Durham, North Carolina, USA), Shubhayu Saha, (Climate Change Division, US Centres for Disease Control, Atlanta, Georgia, USA), Pravash Sahu, (Bhubaneswar, India), Erin Sills, (North Carolina State University, Durham, North Carolina, USA), Ashok Singha, (CTRAN Consulting, Bhubaneswar, India, and), JuiChen Yang, (RTI International, Research Triangle Park, North Carolina, USA)
Citation:Subhrendu Pattanayak, Shubhayu Saha, Pravash Sahu, Erin Sills, Ashok Singha, JuiChen Yang, (2010) "Mine over matter? Health, wealth and forests in a mining area of Orissa", Indian Growth and Development Review, Vol. 3 Iss: 2, pp.166 - 185
Keywords:Econometrics, Forests, India, Mining industry, Natural resources, Social welfare economics
Article type:Research paper
DOI:10.1108/17538251011084473 (Permanent URL)
Publisher:Emerald Group Publishing Limited
Acknowledgements:This study was partially funded by the World Bank. The authors are grateful to Richard Damania, Kseniya Lvovsky, Jennifer Miller, Karnjana Sanglimsuwan, E. Somanathan and seminar participants at Indian Statistical Institute (Delhi), Institute of Economic Growth (Delhi) and Government of Orissa Workshop on Mining and Growth for their help during various stages of the study.

Purpose – The purpose of this paper is to investigate whether mining can serve as a pathway for economic development despite the environmental externalities. The extensive literature on the “resource curse” phenomenon at the national level generally finds that economic dependence on mineral resources is associated with lower levels of economic growth. This paper shows that further insight can be obtained by studying micro-level resource curse because of heterogeneity in institutions, natural resources and economic behaviors.

Design/methodology/approach – The paper empirically tests the resource curse hypothesis with data from a stratified random sample of 600 households in 20 villages in the mining district of Keonjhar, Orissa. Household surveys were used to collect data on demography, forest dependence, health and household economics. Using geographical information system (GIS), the household data were integrated with secondary spatial data on land cover and location of mines to construct multiple measures of exposure to iron ore mines.

Findings – Microeconometric models demonstrate the multi-faceted nature of the relationships between mine exposure, forest resources and human welfare. Households closer to mines experience higher incidences of many illnesses, rank lower on indicators of human development and own fewer production assets. They also derive fewer forest benefits because forests are more degraded and less accessible in villages closer to mines.

Originality/value – This analysis remains timely because of on-going violent conflicts and concern over negative impacts on the welfare of rural populations in the mining areas of India, which is consistent with the notion of a resource curse. The paper's findings on the magnitude of negative impacts can inform the policy discourse (e.g. benefits sharing schemes) related to mining-led growth.

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