Exacerbating Fragmentation and Maintaining Cohesion

Abstract

Abstract This chapter analyses the cases of two Bolivian mines, Kori Kollo (KK) and San Cristóbal. The mines shared a series of similarities, including foreign ownership and the need to negotiate with communities to gain access to land to construct open-pit mines. Both firms also faced disruptive conflict, with groups occupying the mines and organizing blockades and strikes. KK began its operations by undertaking a mixture of forms of distribution—including both targeted benefits and inclusive projects. Yet, as pressure intensified, managers abandoned inclusive distribution and focused on buying off particular leaders who could promise peace. This shift contrasts with expectations from standard approaches to private politics. Examining the interactions between the firm and various groups in detail reveals that mobilization was led by narrow, but locally powerful, factions that demanded particular benefits, creating strong incentives for the firm to abandon any attempts at inclusive distribution. By contrast, San Cristóbal ratcheted up inclusive distribution as pressure increased. Examining the organization of mobilization reveals that the firm bargained with groups that were highly encompassing, including an alliance between indigenous organizations and the labor union. The interests of mobilized groups gave the firm continuous incentives to provide public goods. Furthermore, the firm’s strategic response to stabilize relations with local actors amplified the power of groups representing broad swaths of the population. This approach reduced fragmentation and allowed for future political payoffs from inclusive development projects.