Resource curse

The resource curse is the observation that some countries rich in oil, gas, or minerals grow more slowly and have weaker institutions than resource-poor peers.

The resource curse is the puzzling pattern in which countries with abundant oil, gas, or mineral wealth have sometimes grown more slowly, suffered more conflict, or developed weaker institutions than comparable countries with fewer natural resources. It runs against the intuition that finding valuable resources should make a country better off.

Explanations offered for the pattern include Dutch disease undermining other industries, resource revenue reducing a government’s need to tax its citizens and, with it, the accountability that comes from taxation, and the temptation resource wealth creates for conflict over who controls it. The resource curse is not universal or inevitable; some resource-rich countries have avoided it through strong institutions and careful management of resource revenue, which is why the debate over it centers on governance as much as geology.