Tag Archives: dodd-frank

Econometric evidence against Dodd-Frank as applied in the DRC

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This study is the first to provide econometric evidence of the relationship between conflict and mineral endowments in the DRC. While there are vivid debates and speculations around the motives of armed groups, I find that price shocks lead to armed groups violence, between groups and in order to acquire territory hosting the mineral (not to more pillages). This result is in line with other reports based on qualitative data, such UN (2002). Second, I find that interventions aimed at constraining armed groups ability to collect taxes increase violence against civilians in the short-run. Interventions that attempt to weaken armed groups finances have become dominant among policy circles. In particular, the United States issued the Dodd-Frank legislation in 2012, aimed at constraining purchases of minerals whose trade is a source of finance to armed groups. Governments interested in “cleaning” the mineral chain, thus, may need to protect civilians in the aftermath of these interventions, and provide alternative occupations to combatants who lose access to revenues from taxes as a result of these interventions. 

That is Columbia’s Raul Sanchez de la Sierra in a neat paper on the origins of states. Check it out here (H/T Chris Blattman)

For more on this subject see this over at HuffPost.

The dangers of simplistic single narratives

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As Stearns argues in this excellent book, the causes of the conflicts in eastern DRC are multiple and complex. Yet simple narratives in the media and among aid workers and advocacy groups have tried hard to reduce these causes to a fight over minerals; and similarly the consequences as mass rape of women and young girls (remember the video cameras fiasco??). In reality the story is more complex than this.

Here is a quote from a good paper on the international community’s responses to the Congo (DRC) conflicts by Severine Autesserre in the latest edition of African Affairs:

“These narratives focus on a primary cause of violence, illegal exploitation of mineral resources; a main consequence, sexual abuse of women and girls; and a central solution, extending state authority. I elucidate why simple narratives are necessary for policy makers, journalists, advocacy groups, and practitioners on the ground, especially those involved in the Congo. I then consider each narrative in turn and explain how they achieved prominence: they provided straightforward explanations for the violence, suggested feasible solutions to it, and resonated with foreign audiences. I demonstrate that the focus on these narratives and on the solutions they recommended has led to results that clash with their intended purposes, notably an increase in human rights violations.

The international actors’ concentration on trafficking of mineral resources as a source of violence has led them to overlook the myriad other causes, such as land conflict, poverty, corruption, local political and social antagonisms, and hostile relationships between state officials, including security forces, and the general population. Interveners have singled out for support one category of victims, sexually injured women and girls, at the expense of others, notably those tortured in a non-sexual manner, child soldiers, and the families of those killed.”

The paper is a grim reminder that “fixing the Congo”  – whatever that means – will take a long time. More on this here.

The Consequences of Dodd-Frank in the Kivus

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The dusty streets of Goma, North Kivu’s capital and a mining hub, illustrate Congo’s ills. Metals dealerships dominated the city’s economy until last year but are mostly padlocked now. Repair shops and bars that relied on mining business are empty. So are most public offices. Local government, financed by mining taxes, is insolvent; salaries have not been paid in full for months.

In the past year Goma has suffered a miserable decline. Hundreds of mines in the surrounding countryside have cut output by as much as 95%. At the Humule coltan mine a few gumbooted miners scramble up a red-earth ravine where last year there were thousands. Most stopped coming because they could no longer find buyers for their nuggets of coltan, a metal used in electronic gadgets. They blame what they call “the American law”.

That is the Economist reporting on the mining sector in the DRC.

Dodd-Frank (found here) is a lesson in the failure of solutions imposed from 30,000 feet. As has been stressed by many DRC experts (see Mvemba, Aronson and Seay, for instance), the problem with eastern DRC is not a law enforcement problem but a weak state problem.

With that in mind, it is sad that Joseph Kabila, the man who has failed to pacify the country, is poised for reelection this November. Good governance, even in relatively peaceful and cohesive states, take a long time to evolve. Once can only imagine how much longer Congolese will have to wait before they can get an effective and accountable state.

For  a slightly different opinion check out AFJN.