Gold Mining in Guyana: The free market experiment with mixed results

Typically, economists do not have the luxury of conducting lab-based experiments as in the natural sciences. Therefore, we have to look at truly exogenous or external events such as a policy intervention or an external shock to study cause and effect. One such external event is the decision by Guyanese policy makers to reserve gold extraction for mainly Guyanese miners. Privatised gold extraction was facilitated by the Mining Act of 1989. By the late 1980s, the world thought that free unregulated private enterprise would lead to superior outcomes compared with the government-planned economic model of the former Soviet Union and the Eastern Bloc.

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