The Tragedy of the Commons in Artisanal Gold Mining

131 Pages·2013·2.01 MB·English

Facultad de Minas
Doctorado en Ingeniería – Sistemas e Informática

The Tragedy of the Commons in Artisanal Gold Mining:
Evaluation of Mechanisms of Cooperation with Simulation
and Economic Experiments

Carlos Adrián Saldarriaga Isaza

This thesis is presented to Universidad Nacional de Colombia – Sede Medellín,
in partial fulfillment of the requirements for the degree of Doctor of Engineering

Supervisors

Santiago Arango Aramburo Clara Inés Villegas Palacio
Associate Professor Associate Professor
Dept. of Computing and Decision Sciences Dept. of Geosciences and the Environment
Universidad Nacional de Colombia-Sede Medellín Universidad Nacional de Colombia-Sede Medellín

September 2013
Facultad de Minas
Doctorado en Ingeniería – Sistemas e Informática

La Tragedia de los Comunes en la Minería Aurífera
Artesanal: Evaluación de Mecanismos de Cooperación
con Simulación y Experimentos Económicos

Carlos Adrián Saldarriaga Isaza

Esta tesis se presenta a la Universidad Nacional de Colombia – Sede Medellín como
cumplimiento parcial de los requisitos para optar al título de Doctor en Ingeniería

Supervisores

Santiago Arango Aramburo Clara Inés Villegas Palacio
Profesor Asociado Associate Professor
Dept. Ciencias de la Computación y de la Decisión Dept. Geociencias y Medio Ambiente
Universidad Nacional de Colombia-Sede Medellín Universidad Nacional de Colombia-Sede Medellín

Septiembre 2013
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Abstract

This thesis is about how collective action –associative entrepreneurship– can be fostered in
artisanal and small-scale gold mining. This kind of association is aimed at, among other things,
allowing small-scale gold miners to gather the financial capital that is required to obtain the type
of technologies that reduce mercury use in the gold recovery process, and therefore the harmful
effects of mercury pollution of ecosystems and human health. Given the public-good dilemma
that is faced by these individuals, I study possible institutional arrangements by which associative
entrepreneurship may be encouraged. The methods to achieve this include the construction of a
behavioral simulation model using System Dynamics. As part of both the model building and its
validation process I make use of the results of economic experiments carried out both in the lab
and the field.

The results of the economic experiments do not reject the hypothesis which states that sustained
collective action does not self-emerge as a solution to the public-good dilemma. In this thesis I
analyze two institutional arrangements: co-management and exclusion from private benefits. Of
these two, only co-management shows a statistically significant impact on the establishment of a
permanent collective action. However, in the field experiment this effect of co-management is
undermined when it is combined with exclusion from the private benefits.

From the behavioral simulation model, it is shown that reciprocity, free-riding and profit
maximization are the behavioral aspects that mainly drive decision-making when dealing with the
public-good dilemma. With an external intervention such as co-management, individuals get
more aware of the social dilemma they face and collective action is sustained over time.

From a policy viewpoint these results suggest the importance of interventions programs such as
education projects, training in alternative practices and technologies, and campaigns to foster
social capital. Moreover, the experimental results cast doubt on the effectiveness of economic
incentives to change some practices in the production process of gold. However, simulation
results show that the implementation of stricter incentives could make miners to increase their
commitment to sustain the entrepreneurial organization.

Keywords: artisanal and small-scale gold mining; mercury pollution; behavioral simulation
model; experimental economics; co-management; public-good dilemma; exclusion; collective
action; common-pool resource.

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Resumen

Esta tesis está relacionada con la manera en que se puede promover la acción colectiva –
asociación empresarial– en la minería aurífera artesanal y de pequeña escala. Bajo este esquema
de asociación se pretende, entre otros, reunir el capital financiero necesario para obtener el tipo
de tecnologías que permiten reducir el uso de mercurio en el proceso de recuperación de oro, así
como los efectos nocivos que la contaminación por mercurio produce en ecosistemas y la salud
humana. Dado el dilema de tipo bien público que enfrentan estos individuos, se estudian posibles
arreglos institucionales bajo los cuales se promueva la asociación empresarial. Los métodos
utilizados incluyen la construcción de un modelo de simulación de comportamiento usando
Dinámica de Sistemas. Como parte del proceso de construcción del modelo y su validación, se
hace uso de los resultados de experimentos económicos realizados en el laboratorio y en el
campo.

Los resultados de los experimentos económicos no rechazan la hipótesis según la cual una acción
colectiva que se mantenga en el tiempo no surge como una solución al dilema de tipo bien
público. En la tesis se estudian dos arreglos institucionales: co-manejo y exclusión de los
beneficios privados. De los dos, solamente co-manejo muestra un impacto estadísticamente
significativo sobre el establecimiento de una acción colectiva permanente. Sin embargo, en el
experimento de campo este efecto se debilita al combinar co-manejo con exclusión de los
beneficios privados.

Del modelo de simulación de comportamiento se observa que reciprocidad, oportunismo y la
búsqueda de maximización de beneficios son los aspectos conductuales que explican la toma de
decisiones al afrontar el dilema de tipo bien público. Con una intervención tal como co-manejo,
los individuos adquieren una mayor percepción del dilema social que enfrentan y la acción
colectiva se sostiene en el tiempo.

Desde el punto de vista de política, los resultados sugieren la importancia de programas de
intervención tales como proyectos educativos, entrenamiento en prácticas y tecnologías
alternativas, y campañas para incrementar el capital social. Además, los resultados
experimentales ponen en duda la efectividad de incentivos económicos diseñados para cambiar
algunas prácticas en el proceso de producción de oro. Sin embargo, los resultados de simulación
muestran que la implementación de un incentivo más estricto podría hacer que los mineros
incrementen su compromiso con el sostenimiento de la organización empresarial.

Palabras clave: minería aurífera artesanal y de pequeña escala; contaminación por mercurio;
modelo de simulación de comportamiento; economía experimental; co-manejo; dilema de tipo
bien público; exclusión; acción colectiva; recurso de uso común.
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To Laura and Antonio, my light for the long road ahead.

To Luz Adriana, who has always believed in me.

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“Y empezamos de nuevo a entrar, tendidos de punta como lombrices.
Pero alegres, deshojando cachos. Porque el oro emborracha.
Se sube a la cabeza como el aguardiente.”
Efe Gómez. “La tragedia del minero” (1940).

“I am thankful to all those who said no.
It’s because of them, I did it myself.”
Albert Einstein.

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Table of Contents

Preface .............................................................................................................................................. 1

Chapter 1: Overview ........................................................................................................................ 3
1. Introduction ............................................................................................................................. 3
2. Research problem ................................................................................................................... 5
3. Hypotheses .............................................................................................................................. 7
4. Objectives ............................................................................................................................... 8
5. Chapters outline ...................................................................................................................... 8
6. Main contributions and conclusions ..................................................................................... 12

Chapter 2: The public good dilemma of a non-renewable common resource:
A look at the facts of artisanal gold mining ................................................................ 18
1. Introduction ........................................................................................................................... 18
2. Commonalities of artisanal gold mining worldwide ............................................................. 20
3. Discussion ............................................................................................................................. 28
4. Conclusion ............................................................................................................................ 32

Chapter 3: Phasing out mercury through collective action in artisanal gold mining:
Evidence from a framed field experiment ................................................................... 40
1. Introduction ........................................................................................................................... 40
2. Threshold public good games: an economic experiment for ASGM ................................... 44
3. Experimental procedure ........................................................................................................ 48
4. Results and discussion .......................................................................................................... 51
5. Conclusion ............................................................................................................................ 60
Appendix A ............................................................................................................................... 66
Appendix B ................................................................................................................................ 77

Chapter 4: Chipping in for a cleaner technology across subject pools:
Evidence from a framed threshold public good game with students and miners ........ 78
1. Introduction ........................................................................................................................... 78
2. Experimental design ............................................................................................................. 81
3. Results ................................................................................................................................... 85
4. Discussion ............................................................................................................................. 91
5. Conclusion ............................................................................................................................ 93
Appendix C ................................................................................................................................ 97

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Chapter 5: A behavioral model of collective action in artisanal and small-scale gold mining ...... 98
1. Introduction ........................................................................................................................... 98
2. Collective action and natural resources .............................................................................. 101
3. Modeling approach of decision making in ASGM ............................................................. 102
4. Policy analysis .................................................................................................................... 111
5. Discussion and concluding remarks ................................................................................... 115
Appendix D ............................................................................................................................. 121

Dissemination ............................................................................................................................... 123

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Preface

First and above all, I want to express my deepest gratitude to my supervisors Clara Villegas and
Santiago Arango for believing in this project since its beginning. No matter they were at home or
overseas, I could permanently count on them to solve my doubts and guide me along this lengthy
but wonderful academic route. Working under their kind and outstanding supervision has highly
enriched me personally and professionally.

I would like to acknowledge the debt of gratitude I owe to all my supportive family. My parents’
unconditional love and the love they have for one another have been always inspiring. Ma’ and
Pa’, Gracias!! Thanks also to Alejandro, Claudia, Dora, Gonzalo, Javier, Gonzalo A., don Liby,
doña Gloria, Ana and Matilde. Your concern and state of expectancy for my work were always
stimulating. I especially thank to Luz Adriana. Her love and company, no matter the distance,
motivated me to work harder.

The financial support of the Administrative Department of Science, Technology and Innovation
of Colombia (COLCIENCIAS) and its program of scholarships for doctoral programs in
Colombia, is acknowledged. This work was also partially carried out with the aid of a grant from
Vicerrectoría de Investigación of Universidad Nacional de Colombia.

I am indebted to professors of the evaluation committee of this thesis: Yris Olaya, Marcela
Ibañez and Joep Sonnemans. Your questions, comments and time were key in this process.

I am also very thankful to Luis Alfonso Velez, Renzo Ramírez, Oscar Zapata, Diana Ceballos,
Alberto Cortés, Alberto Castrillón, Laura Moisá, Elizabeth Santamaría, Edison Henao, Gonzalo
Manrique and Liliana Franco for understanding that life is made of ups and downs. And I have to
thank to those who did not believe or were against this project. Their thoughts encouraged me to
move ahead even more.

Finally, I want to thank many people who introduced me to ideas and concepts of the mining
sector and made possible the collection of primary and important secondary data: Alejandro
Delgado (UNAL-Medellín); Victor Aguirre (Secretary of Mines, Gobernación de Antioquia);
Oseas García, Jesús Rúa and Natalia Gonzalez (GMP-UNIDO); Hernando Henao (ASOMINA,
Segovia); Dairon de la Vega (SENA, Segovia); Gustavo Vidales (Secretary of Mines and the
Environment, Remedios); and mine administrators Darío Isaza (Mine La Picuda), Carlos Giraldo
(Mine Pomo Piñal), Fernando Gómez (Mine Asoplayón), and Dionny Ramirez (Mine El Cogote).

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Research assistance of the following people was also very important: Pablo Londoño, Manuela
Gonzalez, Eliana Melo, Alejandro Saldarriaga and Jessica Arias.

To them and all other people who in one way or another contributed to this project, muchas pero
muchas gracias!!!

Medellín, May 2013

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