The Extractive Industries Transparency Initiative (EITI) and local institutions in Ghana’s mining communities

Abstract

Motivation: The Extractive Industries Transparency Initiative (EITI) is a global standard that promotes transparency and accountability in resource-rich countries to improve governance of the extractive sector. Despite improvements in the subnational disclosure of royalty payments, a significant problem is the failure of these efforts to improve accountability and benefits to mining communities. Purpose: The article asks how institutions of local governance affect national efforts to improve accountability to mining communities in Ghana on the use of mineral revenues for development. It contributes to the broader theoretical literature on EITI by clarifying what outcomes, if any, can be directly attributed to the disclosure of royalty payments. Methods and approach: This qualitative study employs a case-study analysis of EITI adoption in Ghana, one of the first countries to join the initiative. The article contextualizes local governance institutions and dynamics in relation to the royalty disbursement process. It draws on original field research to analyse their role in impeding the expected benefits of royalty disbursements to mining-affected communities. Findings: The research identifies deficiencies in local governance structures and processes as they relate to the use of mineral royalties, but also instances of variation in how officials react to EITI. The range of individual actors, institutions, and complex processes on which the subnational disbursement of royalties depends, makes it problematic to attribute the absence of improvements directly to Ghana's EITI. The findings demonstrate that EITI's role in participating countries is best understood as facilitative and indirect when addressing development outcomes for mining communities. Policy implications: Disclosure of royalty payments to local governments is unlikely on its own to result in improved development outcomes for local communities, even when the national government is committed to the goal. There is a need for policy interventions aimed at specific communities to ensure royalty payments reach the intended beneficiaries. These interventions should be tailored to the differences in national governance dynamics in countries participating in EITI, paying attention to contestation over the distribution and expenditure of royalties that disclosure helps bring to light.