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Essay / The Resource Curse: Democracy and the Developing World
When a country discovers oil or another valuable natural resource, it may view it as a blessing; however, this discovery is often very destructive. Recent social science studies suggest that developing countries rich in natural resources tend to experience political crises. This paradox is called the resource curse, the political counterpart of the infamous Dutch disease (Lam et al., 2002)*. In this article, I will explain how this phenomenon not only hinders the development of liberal democracies in non-democratic regimes, but also how it actively destroys liberal values in developing democracies. In particular, I will examine how political instability, socio-economic disparities, and political appeasement produced by natural resource wealth tend to undermine the values of liberal democracy in the developing world. Particular attention should be paid to the claim that weak institutions are responsible for this decline. in democracy rather than in resource wealth itself (Lam et al., 2002). I admit that this is partly true, but weak institutions and the resource curse are by no means mutually exclusive. By definition, underdeveloped countries have weak institutions; similarly, countries with weak institutions are generally underdeveloped. Given that this article particularly focuses on resource-rich developing states, this criticism is not detrimental, but rather complementary to my argument. When it comes to underdeveloped countries, the discovery of valuable resources can easily lead to resource dependence (Wantchekon, 1999: Anderson, 1995). , p. 33* ; Robinson, 2006). As a result, political repression and political laziness are often endemic. Under these circumstances, the ruling party almost always wins re-election because of the peaceful reward...... middle of paper...... intensity. Environmental and Resource Economics, 43, 183-207. Karl, T. (2007). Oil-driven development: social, political and economic consequences. CDDRL Working Paper 80. Robinson, JA, Torvik, R. and Verdier T. (2006). Political foundations of the resource curse. Journal of Development Economics, 79, 447-468. Ross, ML (1999). The political economy of the resource curse. World Politics, 51 (2), 297-322. Ross, M. L. (2002). Does oil hinder democracy? World Politics, 53 (3), 325-361. Wantchekon, L. (1999). Why do countries dependent on natural resources have authoritarian governments? New Haven: Yale University Press. Wick, K. and Bulte, E. (2006). Resource Contestation – Rent-seeking, conflict and the natural resource curse. Public Choice, 128, 457-476. Wright, G. and Czelusta, J. (2004). Why economies are slowing The myth of the resource curse. Challenge, 47 (2), 6–38.