Extracting Inequality: Barriers to Local Economic Development in Liberia’s Mining Sector

• This study identifies four key policy opportunities for improving local economic development from mining in Liberia. • Improving government regulation and tackling corruption would enhance law enforcement, ensuring mining benefits increase for local communities. • Enhancing intersectoral mobility and scaling artisanal mining would increase local wealth and investment in public goods. Using interviews and focus group discussions, this study analyzes the shortfalls in local economic development from mining and resulting policy opportunities in Liberia. The findings suggest four policy opportunities to improve local economic development outcomes from mining: (1) Improving government regulation, (2) tackling corruption, (3) fostering intersectoral mobility, and (4) promoting artisanal mining growth. Addressing government regulation and corruption would improve the monitoring of regulations and enforcement of laws in the mining sector. The currently limited intersectoral mobility makes it difficult for the local population to move from subsistence sectors to more productive economic sectors once a mine opens in their vicinity. This makes it challenging for local businesses to benefit from economic linkages to mines. Lastly, the difficulties Liberians encounter in expanding artisanal mines to semi-industrial levels result in many Liberian miners operating primarily at a subsistence level. Both the lack of intersectoral mobility and the mining growth challenges result in mining communities’ economies often depending on businesspeople and mining supporters from outside of their own community. This results in a sub-optimal level of investment in local mining communities since people from outside of the community have less incentive to develop the local mining community.