Rent Cycling Theory, the Resource Curse, and Development Policy
Article from: OGEL 4 (2007), in Roundup of Articles
The need for a fresh approach to explain growth collapses
Interest in the resource curse thesis is rooted in efforts to explain the protracted growth collapses triggered in many developing countries by the commodity price shocks of 1974-1985. Case studies of the oil-exporting countries (Gelb 1988, Karl 1997) drew attention to the paradox whereby higher revenue from sales of a natural resource commodity-not only oil but also hard minerals, timber, and some agricultural products-had led to declines in welfare. Analyzing the long-term growth trajectories of 21 countries, Lal (1993) found that whereas 8 out of 10 "land-abundant" ...