Framework

This chapter discusses the channels of impact of an extractives activity on an economy by describing the different routes through which the direct economic and social impacts of these activities might be enhanced. These routes include those that often have the highest political profile, namely spending of government revenues. It also discusses other channels that arguably are far more important, such as the direct effects of corporate spend in local supply chains; the immediate ‘multiplier’ effects of this; the further multipliers that follow from significant income growth; the new downstream activities that may be built on the primary extractive activity; and the externalities that may accrue from the direct boost that a large extractive investment is likely to provide.