Abstract: How can resource dependence and its abrupt reversal generate enduring patterns of regional inequality? This paper examines the developmental consequences of a sudden and irreversible collapse in the extractive sector of a resource-dependent country: early 20th century Chile. At its peak, nitrate extraction and trade accounted for over half of Chilean fiscal revenues and more than three-quarters of total exports. The abrupt emergence of a synthetic substitute in 1928, followed by the complete collapse of global demand for natural nitrate in 1931, brought Chile’s dominance in this strategic commodity to an end. Based on archival sources, I construct the first systematic subnational panel dataset for 1909–1951. Exploiting this exogenous shock as a natural experiment, I apply Synthetic Control and Synthetic Difference-in-Differences methods to estimate the causal effects of the shock on regional industrialisation trajectories. Before the collapse, development patterns were relatively homogeneous across regions; afterwards, stark asymmetries emerged. The results reveal that  Núcleo Central, home to the nitrate sector’s commercial and financial coordination, experienced a significant industrial expansion driven by reallocation of production inputs and sectoral diversification. In contrast, the nitrate-producing Norte Grande underwent a more constrained and uneven adjustment process, characterised by delayed industrial expansion and limited diversification into lower-value, labour-absorbing activities. The findings show how the collapse of a dominant sector can catalyse lasting regional inequality by triggering asymmetrical structural transformation, the uneven geographic distribution of productive and coordination functions, and limited input mobility. By uncovering these dynamics, the paper contributes to debates on the consequences of resource dependence and the sources of persistent spatial inequality.

Abstract: The growing demand for critical minerals, essential for the energy transition, is driving increased mining activities, especially in low-income countries. The effects on food security are unclear, as mining can both boost consumption through new revenues and disrupt local agricultural production. This study explores how mining affects local food prices and affordability in Sub-Saharan Africa. By combining a panel dataset on local food prices with data on the location and characteristics of mines, we aim to assess both the short- and long-term impacts of extractive industries on economic access to food. Our focus is on understanding the underlying mechanisms behind price variations, particularly whether demand or supply effects dominate. To achieve this, we will employ Difference-in-Differences approaches to track price changes across different food types and mine settings, before and after a mine opens or closes.

Project supported by the Fondation Schmidheiny  (3'500 CHF) and the Fonds Général de l'Université de Genève (2'500 CHF).