Land Mines and Spatial Development (with Giorgio Chiovelli and Stelios Michalopoulos)

Abstract:
We explore the economic consequences of demining for both the affected districts and to the Mozambican economy as a whole after collecting and digitizing data covering close to the universe of demining activities in the country.
Our analysis proceeds in four steps. First, we describe the self-collected and cross-validated data on the spatial distribution of land mines and unexploded ordnances (UXOs) at the end of the civil war (1992); we then provide fine geo-referenced information on land mine clearance operations. Thus we are able to provide to the Mozambican government, the United Nations and the various NGOs involved in the demining process, a (almost) complete documentation of this gigantic process that lasted more than two decades.
Second, we exploit time variation in the demining process -that appears to be largely non-coordinated and non-strategically planned- to assess its impact on economic activity, as reflected on satellite images on light density at night. In this regard, we estimate “difference-in-difference” specifications, that compare the evolution of local development in areas (Mozambican municipalities), where demining took place in a given period, to municipalities that either had no land mines at the end of the civil war or municipalities that were mined but had not been cleared. The analysis reveals small-to-moderate effects of the removal of land mines on local economic development, as reflected in luminosity. We also examine heterogeneous effects in an effort to shed light on the mechanisms and guide policy on demining activities at other parts of the world. Our tentative evidence points out that demining is associated with large gains when it targets roads-railroads, areas with non-negligible population densities, and towns serving as local trade hubs.
Third, employing recently developed techniques in quantitative trade literature, we examine the economy-wide implications of land mine removals. This is crucial as there are spillovers, general equilibrium effects, from the removal of land mines in one district to others. Accounting for spillovers and estimating the economy-wide effects of land mine clearance is also key for policy, as the interest is typically on the aggregate impact. Our approach combines information on the evolution of land mine clearance with the transportation network (roads, railroads and rivers) at independence. We apply a “market access” approach that quantifies the aggregate effects of land mines (and their subsequent removals) on spatial development. This method, which is derived from general equilibrium trade theory under flexible and widely-used assumptions, is well-suited to our research inquiry and application, as it allows us to shed light both on the direct and the indirect effects (stemming from changes in the network structure) of land mine clearance and opening of roads and railroads on economic activity. The “market access” estimates reveal an economically large and statistically precise impact of land mines removal on aggregate economic development.
To push on the causal interpretation of our estimates, we associate changes in development (luminosity) to changes in “market access” coming from land mines cleared outside a buffer zone of 50 or even 100 kilometers; this minimizes concerns that NGOs and local agencies target districts those with high economic potential. We then report results linking changes in regional development and changes in market access in the set of Mozambican regions without any minefield and UXO contamination at the end of the civil war. For these districts, changes in market access stem solely from land-mine clearance in other regions. The correlation between regional development and market access is quite strong and the estimates are quantitatively similar to those derived in the full sample.
Fourth, combining the spatial general equilibrium model of intra-country trade and the econometric estimates, we run counterfactual policy simulations that allow us estimating the likely gains of demining if it was centrally coordinated and planned targeting the key colonial development “corridors” or the roads and railroads connecting the three main ports. We also approximate the gains if demining was “optimally” targeting the main hubs of the infrastructure system. Our analysis reveals large losses from lack of central planning and strategic coordination among the demining operators.