WF

In-Depth Notes on the Resource Curse

Overview of the Resource Curse

  • Definition: The political resource curse refers to natural resource wealth's adverse effects on governance.
  • Focus Resource: Petroleum is a key resource exhibiting these effects, especially in low- and middle-income countries.

Evidence of the Resource Curse

  • Natural resource wealth can lead to:
    • Durability of authoritarian regimes.
    • Increased corruption.
    • Triggering violent conflict, particularly when resources are located in marginalized areas.
  • Many studies have pointed out these three harmful effects and have been analyzed in various regions, notably Africa and the Middle East.

Historical Context and Initiatives

  • Richard Auty coined the term "resource curse" in 1993.
  • Organizations like the World Bank and G20 have launched initiatives to combat these issues, leading to various multistakeholder agreements.

Research Questions Addressed

  1. What are the robust findings on resource wealth effects?
  2. What challenges and debates surround these findings?
  3. What knowledge gaps exist in the current research?

Key Findings

  • Authoritarianism: Resource wealth, especially oil, has been found to enhance authoritarian durability.
    • No country with significant oil wealth successfully transitioned to democracy post-1960 except for a few with minimal oil.
  • Corruption: Higher oil wealth correlates with increased corruption levels, attributed to the rentier effect (government reliance on resource rents increases corruption).
  • Violent Conflict: Resources can incite conflict depending on their local context, particularly in ethnically marginalized regions.

Mechanisms Behind the Resource Curse

  • Conditional Effects: The negative impacts of oil are dependent on various conditions, including:
    • Political institutions
    • Societal diversity
    • Economic structures
  • Major Debates:
    • Existence of the curse: Some argue it may be an artifact of methodological bias.
    • Mechanisms of influence on democracy and development.

Measuring Resource Wealth

  • Components of Measuring:
    1. Type of resource (oil, minerals, etc.)
    2. Quality of resource (quantity, value, rents)
    3. Normalization method (GDP fraction, per capita)
  • Ambiguities in measurements can lead to biased interpretations of outcomes.

Effects on Governance and Institutions

  • Resource wealth often correlates with weakened institutions:
    • Governments may become less accountable.
    • Corruption rises alongside diminished public service quality.
  • Resource dependence linked to institutional fragility, suggesting that such wealth may inhibit effective state-building.

Civil War Connections

  • Resource Types: Diverse resources (diamonds, petroleum) have been connected to civil conflicts.
  • Non-linear Relationships: The correlation between resource wealth and conflict is not always straightforward; at times wealth can stabilize or destabilize a state.
  • Location Importance: The geographic placement of resources profoundly affects the likelihood of conflict onset.

Policy and Future Research Directions

  • More evidence-based policies are needed to mitigate the resource curse.
  • Future research should explore areas of governance, economic structures, and the role of transparency and institutional quality as mediators.