This paper will explore the resource curse thesis, an idea which theorises a nations abundance in resources will generate poor overall economic development in less developed countries. The resource curse explains this idea by proposing minerals and fuels in great abundance equal restriction in growth in the form of state intervention and significant cases of rent seeking and corruption. The general consensus on these cases is a negative one in terms of overall development and the long-term development their consequently result in. In this paper there will be specific and detailed focus on Latin American countries exploring how valid the resource curse thesis is and if it is hard evidence for the outcome of countries such as Venezuela and Colombia or whether the contemporary result in their development is due to other, unrelated variables.
This paper provides a critical survey of the theory and evidence with respect to some of the main versions of the ‘resource curse’. It focuses on the extent to which mineral abundance affects economic performance. It suggests some of the reasons why much of the evidence is inconclusive for the contemporary underdevelopment Latin America experiences.
The Resource Curse Thesis
Are natural resources a curse? Logically at first glance it would seem that natural resources means greater economic wealth and thus growth, however the resource curse thesis proclaims that countries which are rich in natural resources in a near oxymoron tend to…