An inquiry into the economic commonwealth of mineral resources: does ownership matter?

Abstract

The purpose of this thesis is to inquire into the nature of minerals as a common property resource, to inform the debate about the resource curse. The study considers if communal, or decentralised ownership results in better development and societal outcomes than other forms of ownership. There are four parts, including a historiography of mineral laws going back to Roman Law and up to the present day to find precedent for communal title to minerals in historical law, common law, civil law, or international customary law. The second part involved an analysis of domestic mineral laws in 199 countries to determine the ownership regime for minerals in every country. This resulted in classifying seven different categories of ownership: No minerals, President or Ruler, State or Crown, Communal (People/Common/Collective), “Customary” Landowners, Decentralized/Mixed, and Claimant/Ownerless/Landowner. This analysis found that communal ownership of minerals essentially does not exist at the national level, except in legal rhetoric. The study then focused on the impact of mineral ownership in general on the Human Development Index (HDI). The third part involved a statistical analysis to determine the impact of mineral ownership on the UN Human Development Index (HDI), a broader measure of welfare than GDP. This was conducted in two stages. In stage one, the six categories of mineral ownership were divided into two types: centralized and decentralized ownership. A simple comparison of the means determined that decentralized ownership had better outcomes as measured by the HDI without controlling for other factors. The second stage of analysis consisted of a multiple regression analysis in order to determine the effect of mineral ownership while controlling for other factors that could be identified. The fourth part of the thesis consisted of a case study of communal ownership of mineral-rich lands by the Royal Bafokeng Nation of South Africa. The benefits of mineral ownership to the Bafokeng administration was analysed. A survey was also conducted of 493 area residents to determine their level of satisfaction with services provided by funds from mineral ownership. The main finding is that communal ownership per se could not be identified as the primary beneficial factor in human development outcomes. However, the evidence is that decentralized ownership using the principle of subsidiarity did support better outcomes as measured by the HDI, and could contribute to mitigation of the resource curse. The case study also supported this finding as communal mineral ownership at the local level resulted in much better facilities, benefits, education, and health outcomes than for South Africa as a whole.