Resource-rich countries often have worse economic outcomes than resource-poor ones.
Sachs and Warner's 1995 finding. The mechanisms are Dutch disease, revenue volatility, and the fact that resource rents can be captured without governing well — Botswana and Norway are the counterexamples.
In practice
- A government that can fund itself from one export terminal has no reason to bargain with taxpayers, and does not.
- Botswana and Norway are the standing counterexamples, which is why the curse is about institutions rather than about geology.
- Further reading
- Wikipedia
- Subject
- Economics & Incentives
- Essay
- The regularities money obeys