Is There Really a Resource Curse? A Critical Survey of Theory and Evidence

This article provides a critical survey of the resource curse—the idea that mineral and fuel abundance generates negative developmental outcomes in less developed countries. In particular, it examines the idea that mineral and fuel abundance generates growth-restricting forms of state intervention, extraordinarily large degrees of rent seeking, and corruption, which are generally argued to be negative in terms of the developmental outcomes they generate. The analysis surveys the Dutch disease, rentier state, and rent-seeking versions of the resource curse and finds they have significant shortcomings in terms of theory and evidence. It also identifies some decisive factors that help determine the blessing threshold—below which the risk of a resource curse may be very high—in mineral and fuel abundant developing countries. KEYWORDS: resource curse, economic performance, rentier state, rent-seeking models, resource abundance.