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Are natural resources a blessing or a curse? As a matter of fact, few countries with abundant natural resources have succeeded in combining growth and development. What may account for this apparent paradox? Our analysis suggests that the institutional development of a country (at the time of the discovery of the natural resources) is the key factor explaining why a vicious or a virtuous circle of growth may develop. If the institutions are sufficiently well-established and strong enough to face predation behaviours, the country will then benefit from its substratum. On the other hand, insecure property rights (as is typical of countries with weaker institutions) will fuel predation behaviours around rent-production. To secure their property rights, fi rms will have no other option but to resort to corruption by transferring part of their rents into bribes, exceptional taxes, extortion racket, etc. The increase in these predation behaviours then limits the direct investment flow from foreign countries and blocks the country's development. This in turn will establish a climate of corruption in an economy with low production development. In countries where natural resources are abundant, insecure property rights are thus detrimental in several ways. First, direct investment in the exploitation of resources is suboptimal. This has a proportional negative effect on the country's budget by lowering the tax revenue and limiting the country's development. The extraction potential, and thus the country's enrichment, is constrained by these insecure property rights. Besides, the climate of corruption, generated by the securing of these property rights, deters foreign investors from settling on the national market and locks the country in a poverty trap. The country only attracts firms belonging to sectors connected to natural resources and thus becomes dependent on the rate of raw materials and the exploitation of natural resources. When a state budget depends on exploitation rent at the expense of taxes on citizens, the democratic control of civil society is weakened and the convergence of the institutions towards an autocratic state is favoured, for lack of a strong system of checks and balances. In a moribund economy where investors (in particular foreign ones) are reluctant to value the country's potential, the inequalities generated by a corrupt government which grows richer through mining and oil revenues, and the empoverishment of the population, may result in political unrest leading to conflicts.

Are natural resources a blessing or a curse? As a matter of fact, few countries with abundant natural resources have succeeded in combining growth and development. What may account for this apparent paradox? Our analysis suggests that the institutional development of a country (at the time of the discovery of the natural resources) is the key factor explaining why a vicious or a virtuous circle of growth may develop. If the institutions are sufficiently well-established and strong enough to face predation behaviours, the country will then benefit from its substratum. On the other hand, insecure property rights (as is typical of countries with weaker institutions) will fuel predation behaviours around rent-production. To secure their property rights, fi rms will have no other option but to resort to corruption by transferring part of their rents into bribes, exceptional taxes, extortion racket, etc. The increase in these predation behaviours then limits the direct investment flow from foreign countries and blocks the country's development. This in turn will establish a climate of corruption in an economy with low production development. In countries where natural resources are abundant, insecure property rights are thus detrimental in several ways. First, direct investment in the exploitation of resources is suboptimal. This has a proportional negative effect on the country's budget by lowering the tax revenue and limiting the country's development. The extraction potential, and thus the country's enrichment, is constrained by these insecure property rights. Besides, the climate of corruption, generated by the securing of these property rights, deters foreign investors from settling on the national market and locks the country in a poverty trap. The country only attracts firms belonging to sectors connected to natural resources and thus becomes dependent on the rate of raw materials and the exploitation of natural resources. When a state budget depends on exploitation rent at the expense of taxes on citizens, the democratic control of civil society is weakened and the convergence of the institutions towards an autocratic state is favoured, for lack of a strong system of checks and balances. In a moribund economy where investors (in particular foreign ones) are reluctant to value the country's potential, the inequalities generated by a corrupt government which grows richer through mining and oil revenues, and the empoverishment of the population, may result in political unrest leading to conflicts.

This Element documents the diversity and dissensus of scholarship on the political resource curse, diagnoses its sources, and directs scholarly attention towards what the authors believe will be more fruitful avenues of future research. In the scholarship to date, there is substantial regional heterogeneity and substantial evidence denying the existence of a political resource curse. This dissensus is located in theory, measure, and research design, especially regarding measurement error and endogenous selection. The work then turns to strategies for reconnecting research on resource politics to the broader literature on democratic development. Finally, the results of the authors' own research is presented, showing that a set of historically contingent events in the Middle East and North Africa are at the root of what has been mistaken for a global political resource curse.

Escaping the Resource Curse, Macartan Humphreys, Jeffrey D. Sachs and Joseph E. Stiglitz, eds., Foreword by George Soros; New York: Columbia University Press, 2007, pp. xviii, 408.Escaping the Resource Curse provides economic and political analysis of resource curse theories as well as practical policy advice to governments on managing oil and gas developments. Twelve chapters by natural resource specialists from multiple disciplines discuss a broad range of oil and gas development issues in three sections, "Dealing with Oil Corporations," "Managing the Macroeconomy," and "Handling the Politics." Beyond the specific policy advice elaborated in detail throughout (relating primarily to transparency), the book succeeds in its accessible analysis of resource curse theories and state-industry tensions as well as its reinterpretation of oil wealth.

AbstractThe resource curse can strike countries that export high‐value natural resources, such as oil, metals and gems. Resource‐exporting countries are more prone to authoritarian governance, they are at higher risk of civil wars and they tend to suffer economic dysfunctions such as corruption and slower growth. Associations between resources and these pathologies are seen in the list of the 'Big Five' African oil exporters: Algeria, Angola, Libya, Nigeria and Sudan. The recent histories of mineral exporters support the correlations: for example, 'blood diamonds' fuelled Sierra Leone's decade‐long civil war, and the continuing conflict in the metal‐rich Democratic Republic of the Congo has cost hundreds of thousands of lives. The phenomenon is not solely African: Syria, Yemen and Turkmenistan, for example, are also resource‐cursed. Moreover, poor governance in resource‐cursed countries can engender follow‐on pathologies, such as a propensity to cause environmental damage both domestically (for example, through the destruction of forests) and globally (through increased greenhouse gas emissions). Most research on the resource curse has focused on the exporting countries. Here I focus instead on major importing countries, especially those in the G8. First I survey how the resource curse endangers the core interests of importing states, and how the laws of importing states drive the resource curse. The second half of the article describes a new policy framework for importing states that will improve international trade in resources for both importing and exporting countries.

ABSTRACTAn extensive literature on the 'resource curse' posits that abundant natural resources 'curse' countries possessing them with negative economic, social and political externalities. Usually, scholars identify tangible resources like oil, diamonds or timber, rarely questioning whether other kinds of resources might have the same impact, and under what conditions. This paper examines how little-studied Djibouti's non-tangible resources – geo-strategic location and aid-inspiring poverty – have produced 'curse' effects; with an economy dominated by US and French military spending (and concomitant aid) and rents on trade passing to and from Ethiopia, tiny Djibouti suffers from this curse. It draws four conclusions. First, resource curse effects can derive from non-traditional sources. Second, leaders' policy decisions matter at least as much as the presence or absence of resources. Third, advanced countries' spending patterns in their less-developed allies often produce unintended consequences. Finally, even tiny countries can provide scholars and policy makers with new insights.

What is it about oil? Whereas one might think that countries that produce the world's energy have it good, much scholarship has come to the conclusion that countries that produce oil have it bad: they are worse off economically and politically than they would otherwise be. This counter-intuitive idea has become so widespread that the "resource curse" is often discussed in popular outlets, from Thomas Friedman to Stephen Colbert. And yet scholarship is increasingly questioning whether this curse actually exists. After several decades of research on the topic, we still do not have a clear idea what it is about oil—if anything—that causes problems.

© 2014 University of Uta. Extant theoretical work on the political resource curse implies that dependence on resource revenues should decrease autocracies' likelihood of democratizing but not necessarily affect democracies' chances of survival. Yet most previous empirical studies estimate models that are ill-suited to address this claim. We improve upon previous studies, estimating a dynamic logit model using data from 166 countries, covering the period from 1816 to 2006. We find that an increase in resource dependence decreases an autocracy's likelihood of being democratic over both the short term and long term but has no appreciable effect on democracies' likelihood of persisting.

The resource curse is paradoxical in the sense that an abundance of resource wealth typically hinders economic development for citizens of authoritarian regimes. Leif Wenar's (2008, 2016) proposal bans the purchase of natural resources from such governments on the grounds that these resources are sold without citizens' consent and thus violate property rights. In contrast, this paper argues that curse-ridden populations may have no reason to object to the trade in natural resources. They exhibit 'low-order' consent due to concerns that banning trade will make them worse off. I conclude that this undermines the case for Wenar's proposal.

Weak economic performance of most oil rich countries states that natural resources are more curse than blessing for these countries. Resource curse theory examines the negative effects of rich natural resources on economic growth from an economic and political perspective. Since 1960s appreciation of real domestic exchange rate (Dutch Disease) was explained as the main reason for poor economic performance of oil rich countries. But since 1990s, other causes such as long lasting ineffective institutions, corruption and rent seeking are considered to be other major political reasons behind backwardness of most resource rich countries. These political features are the corner stone of Resource Curse theory. In this paper we examine the viability of Resource Curse theory for Iran, Russia and Norway to see whether natural resources are curse or blessing for these countries. Furthermore, we compare main macroeconomic and good governance indicators from 2000 to 2010 of Iran with Turkey and Russia with China to illustrate the negative effects of oil revenue on economic performance. The result of this research shows that institutional quality has vital role in sustainable economic development. Norway as a successful oil rich country shows that efficient institutions can turn natural resource into blessing; while Iran's and Russia's experiences are a clear example of resource curse.