Blessing or Curse: Examining the Divergent Development Paths of Oil- and Mineral-rich Developing Countries

• In Event: 124 - Regular Session. States and Social Movements: Contesting Land, Food, and Resources

Abstract

This study investigates what accounts for the variation in economic development among developing countries that depend on income from oil and mineral exploitation. It systematically adjudicates the relative power of resource curse, post-curse, and extensions of dependency/world systems perspectives in explaining why some oil- and mineral-dependent developing countries outperform others. The study uses a dataset of 24 oil- and mineral-dependent countries in the Third World from 1985 through 2005 and panel methods of data analysis. The results show that two main factors drive the divergent development outcomes: institutional quality of the state, and international trade. Thus, the analysis provides support for the post-curse, state-centered perspective that not all oil- and mineral-dependent states are the same, and that stronger state institutions can mitigate the resource curse. Moreover, the results show that institutional quality matters more for development in these countries than other types of state structures and policies.
In contrast, the finding that higher levels of international trade also positively impacts economic development in these nations is not consistent with dependency/world systems perspectives. This study concludes that both addressing both internal state institutions and external engagement with the global economy might provide avenues for resource curse escapes.

Author

• Zophia Yolande Edwards, Boston University