CRITICAL MINERALS

Minerals such as iron, copper, and lithium, essential for decarbonizing energy systems, produce volatile revenue streams for countries dependent on their export. In Chile, which exports a third of the world’s copper, price volatility is mitigated by means of strict constraints on fiscal spending.

In her recent book, LILIANA DOGANOVA considers the efforts of José Piñera Echenique, the Chilean minister of mining under Pinochet, to promote a private investment-driven sector without privatizing the state-owned corporation Codelco:

“The question, in Piñera’s view, was not whether the state company Codelco, which owned the large Chilean mines since their nationalization, should be privatized. Privatization would have set off a ‘holy war.’ What was needed was ‘considerably more practical and concrete.’ At that time, Codelco produced 85 percent of Chile’s copper. Between 1980 and 1996, the share produced by publicly owned companies shrank from 84 percent to 39 percent of output while that produced by privately owned companies rose from 6 percent to 54 percent. Judging by these numbers, the effects of Piñera’s legislation resembled those of privatization, but the ‘considerably more practical and concrete’ strategy through which they were achieved was different: it sought to ‘open the way for private production of copper (and other minerals) to grow to the point where it predominated, through a legislation which would encourage the discovery of new deposits and the expansion of existing ones, thereby creating new wealth.'”

+  A new interactive transition-critical metals map from JFI details the value capture of transition-critical minerals by country, and an accompanying report considers the challenges of coordinating diversified economic partnerships between the US and developing countries. Link. An IFSWF examines how sovereign wealth funds are financing an equitable energy transition in developing markets. Link. And a recent FAS report considers how the Department of Energy can aid in the acceleration of US domestically-produced critical minerals. Link.

+  “Halting exports of critical minerals can backfire. After China temporarily halted exports to Japan in 2010, the Japanese government helped a company in Australia develop a large rare earth metals mine as an alternative supplier.” By David Pierson, Keith Bradsher, and Ana Swanson. Link. And in PW, see Jojo Nem Singh on Europe’s critical raw materials strategy. Link. 

+  A Global Business Report article celebrates the 2023 amendments to Chilean mining law, the first major update to Chile’s mining regulatory framework since 1983. Link. And see a Reuters report on Codelco’s flagging production in 2024, and the potential for the state-owned mining corporation to be overtaken by BHP. Link.

NEW RESEARCHERS

Program Evaluations

MICHELLE RAO is a PhD candidate in Economics at the London School of Economics. In her thesis, she uses a novel dataset of 128 program evaluations in the context of cash transfers in Latin America and the Caribbean, and maps them onto corresponding policy spending. She finds “a robust zero relationship between research results and spending,” except when evaluations are attributable to a political party in power.

From the paper:

“Program evaluations are increasingly common in policy settings, with governments and international institutions playing an active role in advocating for, funding, and conducting evaluations (Levine and Savedoff, 2015, Independent Evaluation Group, 2012, USAID, 2016). However, there is limited evidence on the empirical relationship between the results of these evaluations and key policy decisions. In providing causal estimates of impact, program evaluations can—in theory—have a direct impact on policy decisions such as policy spending, program design, and program adoption (Duflo and Banerjee, 2011). Yet, the applicability of evidence to policy decisions can also be constrained by features of the political environment, or of the evidence-base itself (e.g. Allcott, 2015, Rosenzweig and Udry, 2020). Understanding the relationship between evidence and policy is a fundamental step to maximising the policy impact of research.”

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+  On December 12, join the Jain Family Institute for an interdisciplinary panel which will center the countries that produce the minerals required to decarbonize energy systems. Moderated by BloombergNEF’s Ellie Gomes-Callus, panelists will discuss approaches and resources that may help producer countries utilize mineral-revenue windfalls to move up the value chain. Registration can be accessed here.

+  “In a hostile international environment, the regime has viewed oil and PDVSA as means for survival.” New on PW, Víctor Mijares on PDVSA, sanctions, and Venezuela’s dependence on oil. Link.

+  “Today, the American business class’s record of partisanship could best be described as incoherent.” Also new on PW, Alex Browne on business elites and the 2024 US election. Link. 

+  “German elites could have capitalized on the shock to rebalance their growth strategy. But the opposite happened: the government’s adjustment strategy has aimed at doubling down on export-led growth and protecting the core export industries.” By Donato Di Carlo, Anke Hassel, and Martin Höpner. Link.

+  Gustavo Cortes and Cameron LaPoint create a new hand-collected database spanning a century of monthly building permit quantities and valuations for all US states and the sixty largest MSAs to address the question of whether the housing market leads the financial cycle. Link.

+  Considering barriers to marginalized groups’ participation in technological innovation, Claire Brunel and Megan Stewart examine women’s labor force participation in the context of World War II in the US, and find that women’s increased participation in the workforce is associated with a rise in the number of inventors filing patents, but those patents are primarily owned by men. Link.

+  “Voter discontent about inflation is hardly a new phenomenon. Already in the 1970s, inflation was high on the agenda in election campaigns in many countries.” By Jonathan Federle, Cathrin Mohr, and Moritz Schularick. Link.

+  “Prior research suggests that Walmart Supercenters exert substantial power over the low-wage labor market, though the consequences of Supercenter openings on household incomes and public finances are less clear.” Link.

+  “The sophist is an entrepreneur who offers the empty surfaces of coherently articulated speech to anyone who wishes to be concealed behind them. The real attraction of the linguistic commodities offered for sale by the sophist is represented less by their logically valid surfaces than by the dark space behind those surfaces, where customers can settle in comfortably. Listeners are encouraged to appropriate the obscure core of sophistical speech in order to fill it with their own concerns. In other words, speech that hides its paradoxical structure becomes a commodity that invites penetration into its paradoxical interior. But all speech that is presented as logically valid is sophistical.” By Boris Groys. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org