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Combating the Resource Curse: An Alternative Solution to Managing Mineral Wealth
Published online by Cambridge University Press: 24 February 2006
Abstract
Countless studies document the correlation between abundant mineral
resources and a series of negative economic and political outcomes,
including poor economic performance, unbalanced growth, weakly
institutionalized states, and authoritarian regimes across the developing
world. The disappointing experience of mineral-rich countries has
generated a large body of scholarship aimed at explaining this empirical
correlation and a list of prescriptions for combating the resource curse.
The most popular solutions emphasize macroeconomic policies, economic
diversification, natural resource funds, transparency and accountability,
and direct distribution to the general population. The success of these
solutions has been limited because they either presuppose strong state
institutions, which are widely absent in the developing world, or assume
state ownership over mineral wealth and thus the need for external actors
to constrain the state. At the same time, domestic private ownership is
rarely proposed and often maligned. Yet, in some countries, it would serve
as a more viable way to avoid the resource curse by fostering institutions
that more effectively constrain state leaders, encouraging them to invest
in institution building, and enabling them to respond more successfully to
commodity booms and busts.
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- © 2006 American Political Science Association
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