Working paper 78
This paper offers a political economy explanation to the question of why over 100 years of mineral resource extraction in Ghana has failed to translate into broad-based development. It does so through the lens of political settlements, which draws attention to how relations of power and ideas shape elite commitment to allocating mineral resources towards long-term development goals. The analysis draws attention to how clientelist political pressures engendered by Ghana’s highly competitive electoral system have historically underpinned the diversion of mineral revenues towards shorter-term goals of maintaining the stability of ruling coalitions. In particular, all ruling coalitions have allocated significant shares of mineral rents to chiefs not necessarily for the socio-economic development of their communities, but mainly because political elites want to avoid provoking resistance from a group in society that brokers land and votes in rural areas. These findings challenge recent suggestions concerning the centrality of inclusive political settlements for the effective management of mineral rents. As the analyses reveal, broad-based elite inclusion can also carry the danger of undermining the effective management of rents for long-term development if mineral rents are deployed with the aim of ’buying-off‘ elites who can potentially undermine the stability of ruling coalitions. Under such circumstances, inclusive political settlements may at best result in unproductive peace, as substantial mineral resources are shared for consumption rather than development.