New monitoring technologies can help curb illegal activities by reducing information asymmetries between enforcing and monitoring government agents. I created a novel dataset using machine learning predictions on satellite imagery that detects illegal mining. Then I disclosed the predictions to government agents to study the response of illegal activity. I randomly assigned municipalities to one of four groups: (1) information to the observer (local government) of potential mine locations in his jurisdiction; (2) information to the enforcer (National Government) of potential mine locations; (3) information to both observer and enforcer, and (4) a control group, where I informed no one. The effect of information is relatively similar regardless of who is informed: in treated municipalities, illegal mining is reduced by 11% in the disclosed locations and surrounding areas. However, when accounting for negative spillovers — increases in illegal mining in areas not targeted by the information — the net reduction is only 7%. These results illustrate the benefits of new technologies to build state capacity and reduce illegal activity.

Santiago Saavedra
Publication type: 
Working Paper
May 27, 2022
Program area: