Three Essays on Windfalls, Environment, and Political Economy in Central EurasiaPan, Pengshan (2024) Three Essays on Windfalls, Environment, and Political Economy in Central Eurasia. Doctoral Dissertation, University of Pittsburgh. (Unpublished)
AbstractIn this dissertation, I explore how environmental endowments in Kyrgyzstan and Afghanistan shape institutions within the context of globalization. Specifically, the influx of windfalls from natural resources, opium production, and infrastructure profoundly affects the well-being of local labor and ultimately leads to changes in local political and economic institutions, highlighting issues of division, coercion, and conflict. My research engages with several critical debates in political economy, including: (1) the varying impacts of different types of windfalls (e.g., crops, natural resources, and infrastructure) on local politics economy; (2) the challenges posed by environmental and natural resource governance in developing countries; (3) the identification of winners and losers in the exploitation of windfalls; and (4) the examination of globalization's consequences on human-environment interactions. Focusing on Central Eurasia—one of the most vulnerable, least developed, and understudied regions—my work explores how these dynamics affect people's daily lives. My first essay, ``Golden Promises and Divided Communities: Evidence from the Kumtor Mine in Kyrgyzstan," contributes to the debate on the political and economic impacts of extensive natural resource extraction in developing countries. It specifically focuses on the largest gold mining operation in Kyrgyzstan, which, in 2020, accounted for 12.5% of its GDP. The essay highlights how the significant yet unevenly distributed revenue from Kumtor creates a divide between workers who benefit directly and local residents who are largely excluded. Using data from Kyrgyzstan's household panel surveys between 2010 and 2016, the study demonstrates that Kumtor provides superior social benefits exclusively to its workers, without observable spillovers into non-mining sectors. Additionally, miners at Kumtor exhibit lower trust in local community authorities compared to non-miners, a disparity that intensifies with rising gold prices and is particularly noticeable at Kumtor, compared to other mines, regardless of ownership. The second essay, ``Seeing the State Through Infrastructure: Mountain Roads and State Capacity in Kyrgyzstan," coauthored with Marika Miner, explores the effects of the North-South Transportation Corridor, a mountain road construction project in Kyrgyzstan implemented under China's Belt and Road Initiative (BRI). Utilizing a difference-in-differences design, our research illustrates the project's role as an infrastructural link that unifies traditionally isolated mountainous regions and connects communities between the two largest cities in the country. Our results show that this foreign-invested infrastructure development inadvertently strengthens state capacity and national unity. There is evidence of increased local income, enhanced trust in the central government, and improved inter-ethnic relations among nearby households. However, trust in local community leaders has decreased, alongside shifting views on religious groups and a diminished tribal identity, especially for residents living 10km to 25km from the project. These impacts are more pronounced in historically marginalized tribes and among certain ethnic groups. My third essay, ``The Dutch Disease of Afghanistan: Opium Production and Seasonal Conflict," coauthored with Liyang Zhou and Ahmad Shah Mobariz, explores the connection between opium production and armed conflict in Afghanistan, which contributed over 80% to the global opium supply in 2020. We propose that the Afghan opium economy exhibits characteristics akin to the "Dutch disease" phenomenon. Specifically, we observe that an increase in opium production correlates with a reduction in conflict during the summer months, attributed to the employment of labor in the opium harvest. This period of reduced conflict is followed by a spike in rebel activities during the winter, driven by revenues generated from the opium trade and the presence of unemployed labor. Since opium cultivation starts one month before that of food crops, we use March rainfall as an exogenous variable to exclusively predict opium cultivation, thus mitigating the potential confounding impact of wheat production. Our analysis confirms that optimal rainfall during the opium growing season, from April to June, leads to an increased opium yield. This, in turn, results in a decrease in conflict during the summer due to labor engagement but catalyzes a rise in rebel conflict from December to February of the following year, fueled by the surplus of unemployed labor. Share
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