Knowra Resource curse Resource curse The resource curse is the tendency for countries rich in natural resources, especially oil and minerals, to experience weaker economic growth, poorer governance, or greater conflict than resource-poor countries.
Dutch disease : A boom in one export sector raises domestic costs and the currency’s value, making other tradable industries less competitive. Resource exports can trigger this shift, weakening manufacturing and agriculture.
The Paradox of Plenty : A 1993 book by Terry Lynn Karl analyzing how oil wealth shaped Venezuela’s political and economic development. Karl’s study helped establish the modern argument that abundance can obstruct development.
Norway’s oil economy : Norway’s petroleum sector, managed through public institutions and a sovereign wealth fund. Norway shows how fiscal rules and strong institutions can limit familiar resource-curse outcomes.
Resource abundance : A large endowment of natural resources relative to a country’s population or economy. Abundance describes the starting condition, not the adverse outcomes meant by the curse.
Natural resource rents : Income from extracting natural resources beyond the costs of production and the normal return on investment. How rents are collected and distributed is central to competing explanations of the curse.
Commodity price volatility : The sharp and often unpredictable fluctuations in prices for raw materials traded on global markets. Price swings make public revenue and investment plans unstable in resource-dependent states.
Terry Lynn Karl : An American political scientist whose research examines oil, state formation, and political development. Her account of Venezuela connected petroleum wealth to institutional and economic weakness.
Botswana’s diamond economy : Botswana’s diamond-based economy, in which state management helped support sustained growth and public investment. Its record challenges claims that mineral wealth inevitably produces poor development.
Resource dependence : A country’s reliance on natural-resource production or exports for income, employment, or public revenue. Dependence is a measurable exposure that can raise risks without proving a curse.
Sovereign wealth fund : A state-owned investment fund that manages public financial assets, often including revenue from natural resources. Such funds can smooth volatile revenue and preserve resource wealth for future generations.
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