Mining and Institutional Frameworks in the Andean Region
Good governance of natural resources depends on the existence of institutional frameworks that enable national and subnational governments and local populations to have a say in decisions regarding the use of the natural resources located in the territories.
For NRGI, good governance is a critical condition to make sure natural resources are exploited for the benefit of the people. The impact of pro-investment policies on institutional reforms designed to improve governance is, therefore, a matter of concern.
In recent years in Latin America, policies designed to attract minerals and hydrocarbon sectors investment frequently collided with institutional reform promoting citizen participation, decentralization and environmental management.
Institutional reforms did progress, but remained subordinated to the overarching national goal of promoting investments to sustain growth and capture the rents generated by the extractive industries.
When the supercycle came to an end, otherwise diverse country governments shared “race-to-the-bottom” policies that weakened fiscal, social and environmental standards in order to further attract investments.
This report from the NRGI team in Latin America team reviews the evolution of institutional reform processes in Andean countries during the supercycle and the race to the bottom. The report makes policy recommendations to relaunch them. The report was prepared with the generous support of GIZ.